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Mt. Gox sued in United States over bitcoin losses

Published on Mar 1, 2014 2:57 AM

(REUTERS) - Mt. Gox, once the world's largest bitcoin exchange, has been sued by a customer in what may be the first of many US lawsuits seeking to recoup millions of dollars of losses linked to a hacking attack that led to the exchange's bankruptcy.

In a complaint filed on Thursday in US District Court in Chicago, plaintiff Gregory Greene said Mt. Gox and its chief executive, Mark Karpeles, were negligent and committed fraud for having failed to protect the Tokyo-based exchange from theft.

Greene said bitcoin prices plummeted after Mt. Gox found the security breach, but said he and other investors in the virtual currency could not cut their losses because the exchange had halted trading. Mt. Gox took down its website on Tuesday.

"Mt. Gox intentionally and knowingly failed to provide its users with the level of security protection for which they paid," said Mr Greene, who estimated his bitcoin stake at US$25,000 (S$31,600).

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