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Mt. Gox Case Takes a Turn as CoinLab Sues the Exchange Firm With $16 Billion

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Mt. Gox a cryptocurrency exchange firm which was operating without issues a few years ago, is now trapped in many problems. It has experienced a hack, after which it had to halt its operations and file for bankruptcy. After this scenario, a number of entities are making efforts to get their money back, including their former clients.

Mt. Gox, which is currently going through a civil rehabilitation program, has been sued by CoinLab, a former business partner of the exchange. CoinLab claimed $75 million alleging the breach of contract. According to the contract, CoinLab was expected to take over the American customers of Mt. Gox. Notably, now Coinlab has increased Claim from $75 Million to $16 Billion.

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A part of crypto community considers the alleged increase in CoinLab’s claim unjust and wrong. After the bankruptcy of Mt. Gox, the CEO of the exchange thought that the amount in the cold wallets could be used to pay back the debts of the users. But, If this $16 Billion claim gets approved, the exchange will less likely be able to pay back its user base. Due to this, the claim filed by CoinLab is largely criticized by the cryptocurrency community. Some of the crypto entities believe that it is insensitive to the victims of the hack.

Additionally, Daniel Kelman, an attorney initially noticed the CoinLab’s claim. He expressed via a Tweet:

Regarding this incident, Jesse Powell, the CEO of Kraken tweeted,

“Unbelievable balls on this guy to hold up payouts to thousands of victims for years with an entirely frivolous claim over a botched partnership attempt. How could you think that your $16B claim should be senior to the actual account holders’? How do you show your face?”

The CEO of Kraken also expressed that he is disappointed to hear that the lawsuit is the reason behind delaying payouts.

Another Twitter user said,

“Looks like this was done purposefully [sic] just to block any creditor payouts? [sic] Care to clarify how this claim is justified?”

Ruti Vora

Ruti regularly contributes in-depth news articles for leading cryptocurrencies. She contributes technical chart-based price updates and analysis pieces on world's leading digital currencies. She holds graduate degree in journalism.

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