US and Canadian customers of failed Tokyo-based bitcoin exchange Mt. Gox have agreed to settle their proposed class action lawsuits that alleged the company defrauded them of hundreds of millions of US dollars.
The class action plaintiffs agreed to support a plan by Sunlot Holdings to buy the closed exchange and accept their share of bitcoins still held by Mt. Gox, according to a statement and court filings.
Mt. Gox filed for bankruptcy in Japan and the US earlier this year after saying it lost some 850,000 bitcoins — worth more than US$400 million at the time — in a hacking attack. It subsequently said it found 200,000 bitcoins.
Photo: AFP
Once the world’s biggest bitcoin exchange, Mt. Gox is slated to be liquidated, after the Tokyo District Court granted the company’s request to abandon plans to revive its business.
In return for settling separate class actions, the US and Canadian customers will share in a 16.5 percent stake after Mt. Gox is sold to Sunlot, a firm backed by child actor-turned-entrepreneur Brock Pierce and venture capitalist William Quigley.
In addition, the customers will split the 200,000 bitcoins that Mt. Gox said it found after seeking bankruptcy protection, and will also split up to US$20 million in fiat currency held by the administrator for Mt. Gox.
“This is the customers’ best option and the only chance they have for full restitution,” read a statement from Jay Edelson of the Edelson law firm, the lead attorney in the US case.
Sunlot has proposed buying Mt. Gox for one bitcoin, or less than US$500, according to the Wall Street Journal. A sale to Sunlot must be approved by the Tokyo court.
The settlement releases Mt. Gox founder Jed McCaleb and former chief marketing officer Gonzague Gay-Bouchery. The pair pledged to help pursue a suit against the remaining defendants: Mt. Gox CEO Mark Karpeles, parent company Tibanne, banking partner Mizuho Bank Ltd and others.
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