Bitcoin exchange Mt. Gox sued in federal court in Chicago

Written By BY KIM JANSSEN Federal Courts Reporter Posted: 04/02/2014, 06:09am

Mt. Gox — the embattled Japanese virtual currency exchange — is being sued in Chicago’s federal court by a customer who hopes his lawsuit will be granted class-action status.

Gregory Greene, who lives in the north suburbs, says he lost bitcoins worth $25,000 when Mt. Gox, until recently the world’s largest bitcoin exchange, collapsed.

Mt. Gox admitted earlier this week that weaknesses in it systems meant 850,000 bitcoins, worth an estimated $425 million, had gone missing from its exchange. It filed for bankruptcy Friday.

Bitcoins were introduced in 2009 as a way to facilitate international trade without involving banks, incurring fees or government oversight. In recent months, speculators sent their value soaring.

But Mt. Gox’s admission that huge sums may have been stolen from its exchange is a setback to the currency’s image and is likely to prompt multiple lawsuits.

Greene’s suit, filed late Thursday, states that the “catastrophic loss has not only revealed the instability of a burgeoning new industry, it has also uncovered a massive scheme to defraud millions of consumers into providing a private company with real, paper money in exchange for virtual currency.”

It alleges Mt. Gox didn’t provide the security customers including Greene paid it for.

Email: kjanssen@suntimes.com

Twitter: @kimjnews

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