A federal judge sitting in Philadelphia has ruled that former Mt Gox CEO, Mark Karpeles must face lawsuit.
According to Reuters report, District Judge Robert Kelly has refused Karpeles’ request to dismiss the suit, which alleges that the former CEO had concealed issues at the exchange from its users.
A court document on the ruling indicates that the case has been brought by a former customer of Mt. Gox, Gregory Pearce on his own behalf and others affected by the failure of the exchange. He alleges that Karpeles, who was the “sole controlling force” of the Tokyo-based exchange, knew there were “security bugs in the system but did not make these defects known to the public.”
According to the report, Karpeles had argued that the Philadelphia court did not have jurisdiction in the case and sought a dismissal, however the Judgerejected his argument on Friday.
The suit was originally brought in 2018 against Karpeles and Mihuzo Bank, but the court found it did not have jurisdiction over the bank. Pearce is claiming one count of negligence and one count of fraud against Karpeles.