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Mt Gox CEO Karpales Ordered to Attend US Bankruptcy Hearings

| 3 Apr 2014 13:20
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Karpales argues that he should be able to send an intermediary, but Judge Stacey Jernigan tells him no.

Mt Gox, the Bitcoin exchange that imploded spectacularly a short while ago, filed for US bankruptcy protection, but up until now CEO Mark Karpales has argued he doesn't need to attend the bankruptcy hearings in person. Karpales claims he's worried he'll be hit with additional lawsuits as soon as he sets foot on US soil, but Bankruptcy Judge Stacey Jernigan has told Karpales in no uncertain terms that he will attend the April 17th deposition, to answer questions.

"If he avails himself of this court, my God, he is going to get himself over here," says Judge Jernigan. Karpales was hoping to travel only as far as Taipei, and send a representative to answer questions in his place. Karpales has some cause to be worried about lawsuits; there's already a Canadian class action suit demanding $500 million from two named defendants, including Karpales, in addition to Mt Gox itself, its bank and other affiliated companies.

An Illinois class action is also under way - Greene v. Mt. Gox Inc., 14-cv-01437 - claiming that "rather than safeguard users' property, Mt. Gox - aided and abetted by Mizuho and John Doe Defendants - devised a scheme whereby they stole the money and Bitcoins of its users." The attorneys in that class action have offered to pay Karpales' travel expenses, if Karpales will agree to attend in person.

"I think it's a great decision. We're very happy with it," says Greene attorney Steven Woodrow. "You shouldn't be allowed to just hide behind a website or to hide out in Japan."

Judge Jernigan refused to let the Greene attorneys ask questions pertaining to its class action, limiting the inquiry to Mt Gox's eligibility for US bankruptcy protection. Karpales was supposed to be in court this month, to determine whether or not Mt Gox is eligible. That date has been re-set to May 20th.

Bitstamp currently values Bitcoin at $433.35 per. In November and December last year it traded at over $1,000 per, but this was a brief spike; even as early as November 1st 2013, Bitcoin's value was only $202.15 per.

Source: Ars Technica

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