Canada's $500M Mt. Gox Class Action Lawsuit Is Being Dismissed

Mt. Gox will be a painful memory for some Canadians.

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May 18 2016, 9:55pm

Karpeles leaves court in Tokyo in 2014. Image: Tomohiro Ohsumi/Bloomberg via Getty Images

For years, roughly 100 Canadians have been trying to reclaim the money that they lost when Mt. Gox—at one time the largest bitcoin exchange in the world—went under, and took their funds with it.

On Wednesday, the law firm representing those Canadians in a class action lawsuit announced that the case will be dismissed on June 17.

Unless the individuals in the dismissed class action suit decide that they still wish to pursue a case against Mt Gox's embattled CEO Mark Karpeles or the company's former bank, Tokyo-based Mizuho, their chance to get their money back has come and gone.

"I regret the fact that we won't be able to get recovery for all the Canadians who used the exchange"

"In Canada, if you lose a case then you pay the winner's cost, and in this case the cost would have been in the millions of dollars," Ted Charney, the Toronto-based lawyer handling the case, told Motherboard.

At the outset of the case in 2014, the class action sought $500 million CAD in compensation from Mt Gox, its parent company Tibanne KK, Karpeles, Mizuho, and site founder Jed McCaleb. Recently, however, it started to look like they wouldn't get more than $1 million, Charney said.

A class action lawsuit against Mizuho is ongoing in the US, and in March a federal judge in Chicago rejected Mizuho's claim that the case should be moved to Japan. In the US, losers in class action cases do not have to pay the winner's fees, Charney said.

"I regret the fact that we won't be able to get recovery for all the Canadians who used the exchange," Charney continued, "but unfortunately the realities of this litigation, with everybody going bankrupt, and the remaining parties being in Japan, made it very problematic."

The Mt Gox saga has become something of a legend in bitcoin, since it marked both the currency's high point in terms of its monetary value, and its worst collapse.

With Canada's only class action lawsuit against the company set to be dismissed in just a few weeks' time, Mt Gox will be little more than a painful memory for the Canadians who have been waiting for years to have their day in civil court.