CoinLab Allegedly Sues Mt. Gox for $16B

A lawsuit filing has surfaced, pointing to an attempt of Mt. Gox’s former partner to receive a far larger payout, which could block the compensation for smaller traders.

A document has surfaced on Reddit, suggesting that US-based CoinLab is seeking $16 billion instead of $75 million in redress for the crash of its former partner Mt. Gox back in 2013. The Japanese exchange is still being sued for reimbursement to small-scale investors, and some believe the move by CoinLab is an attempt to derail and delay the potential payouts.

The crypto community was extremely skeptical about the motives behind the massive claim.

Some see this as an attempt at a money grab that would damage other claimants.

CoinLab, an enterprise attempting commercial adoption of Bitcoin, formerly helped Tokyo-based Mt. Gox develop its business. But most see the current claim as frivolous and far in excess of the real damages.

The total losses of Mt. Gox amount to about $350 million, or around 744,000 BTC. More recent hacks have come with a steeper price tag, but Mt. Gox was seen as a watershed moment that broke the trust in BTC for the first time as prices tanked from above $1,000 to as low as $100.

The claim of CoinLab arrives at a time when traders on Mt. Gox were just about to settle on a form of rehabilitation claim which would distribute the BTC in the exchange's wallets. Most of the funds in known wallets have not been moved.

Exchanges remain one of the most vulnerable elements of the ecosystem. While the failure of a single platform cannot hurt the market that much, security breaches or exit scams damage the reputation of Bitcoin and the potential for fair trading. Most recently, Cryptopia closed after a large-scale hack and wallet theft, while QuadrigaCX is still being investigated for redirecting user funds and not having the actual BTC in cold storage.

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