New lawsuit in Tokyo highlights Mt Gox's compliance, funding before shutdown

A Reuters report uncovered a lawsuit filed by a New York resident against Mt Gox two months before the virtual money exchange had shut down and filed for bankruptcy. Court filings showed that Marko Simovic filed a civil lawsuit against the embattled company at the Tokyo District Court on December 24 and is seeking to recoup his investment worth $105,000 on deposit and $14,000 in interest. The filing revealed Simovic as a software developer who had managed the Bitcoin operations for a hedge fund.

According to the filing, Simovic claimed that Mt Gox has not acknowledged his many requests to withdraw the funds he deposited at the exchange. His account at Mt Gox as of July 1 last year was at $935,000 in cash, the lawsuit read.

In a brief dated December 18 that is part of the court file, Simovic said, "Rather than leave my money at Mt. Gox as required by their expensive, extremely slow and uncertain withdrawal procedure, I decided to move the funds as soon as possible. This was the only way I could get my money back quickly. Moreover, I was concerned there might be a run on Mt. Gox."

Aside from Mt Gox's withdrawal procedures, Simovic had questioned the exchange's compliance with Japanese laws. Reuters said that Simovic's lawyer sent a letter dated September 1 addressed to Mt. Gox's chief marketing officer Gonzague Gay-Bouchery expressing concerns about the exchange's violations of investment and banking laws. The laws in question prohibits companies who are unlicensed to receive deposits and engage in currency exchange services.

Mt Gox has since then refuted Simovic's allegations in court, and at one point said Simovic violated the exchange's online procedures. The exchange also said that it has checked with Japan's Financial Services Agency (FSA) and said there was no need for the exchange to register with the country's banking regulator.

Reuters was unable to reach Simovic for comment, nor anyone at Mt Gox or Baker & McKenzie, the law firm who represented the exchange in Simovic's complaint.

Tags

Mt Gox shutdown, Mt Gox lawsuit, Mt Gox bankruptcy

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