Man files class-action lawsuit against the recently bankrupt Mt. Gox

A class-action lawsuit has been filed against the Mt. Gox Bitcoin exchange and its owner Mark Karpeles, seeking damages in the hundreds of millions of dollars and the return of bitcoins to users whose accounts were frozen on the site. The lawsuit lays out a number of claims against Mt. Gox, chief among them that the exchange did not keep users’ bitcoins securely stored or adequately detect a theft of those coins. When the online exchange figured out what was going on, it clouded the truth by telling customers there was a computer glitch, the lawsuit claims.

An Illinois man has filed a class-action lawsuit against MtGox, alleging consumer fraud, negligence, breach of fiduciary duty, and breach of contract, among other allegations. The case appears to be the first such class-action suit filed in the United States against the failed Bitcoin exchange. MtGox filed for bankruptcy protection in Japan on Friday. In a 32-page filing submitted Thursday to the Northern District of Illinois, Gregory Greene says that he first encountered MtGox in late 2011 and signed up for an account. Greene, like many others, attempted to withdraw his bitcoins from MtGox once the company announced that it had sustained a massive security breach. However, given the company’s sudden shutdown and subsequent application for bankruptcy protection, Greene was unable to do so.