Plaintiffs in Suit Seek to Freeze Mt. Gox’s U.S. Assets

Customers of Mt. Gox are trying to freeze assets in the United States of the bankrupt Bitcoin exchange and its chief executive, Mark Karpeles.

There’s just one problem: They don’t know where those assets are.

Plaintiffs in a class-action lawsuit filed a motion on Tuesday seeking a temporary injunction to keep Mr. Karpeles or his company from moving any money outside of the United States. They also want a full accounting of any assets Mt. Gox has left.

Mr. Gox, a Japan-based virtual currency marketplace, filed for bankruptcy on Friday, and Mr. Karpeles said it had lost all 750,000 customer Bitcoins, as well as 100,000 of its own â€" or more than $450 million worth. Although the company has a subsidiary incorporated in Delaware, it’s unclear what accounts, if any, the company held in the United States.

“There were weaknesses in the system,” Mr. Karpeles said during a news conference in Tokyo on Friday to discuss the bankruptcy. “I’m truly sorry to have caused inconvenience.”

Mr. Karpeles has blamed the loss on hackers, but it’s not yet clear what happened to the money.

Gregory Greene, an Illinois man who claims to have eventually acquired more than $25,000 worth of Bitcoins on Mt. Gox, filed his class-action lawsuit on Thursday, three days after the company’s website went offline, charging “systematic misuse and misappropriation of its users’ property.”

Mt. Gox halted all customer withdrawals in early February after months of technical glitches. Users had long complained that they could deposit money into their accounts, but often had trouble taking money out.

In a company crisis strategy document that leaked online last week, Mt. Gox said that its customer deposits had been stolen over years and “went unnoticed.”

But lawyers for Mr. Greene say that Mt. Gox knew it was in trouble long before it went offline, and deliberately misled customers about what it was doing to fix its problems.

A representative for Mt. Gox could not be reached for comment.

In court documents, lawyers for the plaintiffs argue that Mt. Gox misled customers by promising quick and secure trading, and for giving the impression that it was busy trying to solve any glitches in the system.

“Defendants in this case have engaged in a series of deceptive and unfair practices designed to lull consumers into depositing and keeping their money on the exchange while Mt. Gox KK readied itself for bankruptcy,” the suit claims, referring to the Japanese entity.

Bitcoin, a virtual currency that isn’t backed by any central bank, first appeared in 2009. It appealed to technology buffs and anti-establishment libertarians, many of whom had grown frustrated with a global banking system that had crippled many of the world’s biggest economies.

Users can buy or “unlock” Bitcoins by solving mathematical riddles. But Bitcoin is not regulated, leaving users few options when things go sour.

Mt. Gox was at one point the dominant online marketplace for buying, selling and storing Bitcoins, and its shuttering last week sent many users scrambling to figure out what could be done to recover their money.

“The idea that they have no money is not credible,” said Jay Edelson, a lawyer for the plaintiffs. “They were taking deposits up until the day before they shut down.”