Bitcoin Lawsuit: Mt. Gox, World's Largest Bitcoin Exchange, Sued By Partner

 @ryanWneal
on May 03 2013 3:04 PM

Struggles continue at Mt. Gox, the largest Bitcoin exchange in the world. After getting hit by a slew of cyberattacks, it now faces a breach-of-contract lawsuit from its former partner, CoinLab.

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Mt. Gox and CoinLab made a deal in February to help Mt. Gox, which is based in Japan, expand the popularity of Bitcoin in the U.S. The contract said that CoinLab, of Seattle, Wash., would handle all of Mt. Gox’s North American transactions.

The lawsuit, filed in Washington state, claimed that the Japanese branch continued to market the virtual currency to customers in North America. CoinLab also claimed that Mt. Gox failed to provide agreed-upon data and server access that was essential for CoinLab to run a successful Bitcoin exchange.

“These breaches have caused CoinLab to lose customers and threaten to cause substantial damage to CoinLab’s business,” the complaint said. Although the original deal called for $50 million in damages in the event of a breach of contract, according to Finextra, CoinLab asked for more than $75 million in the lawsuit.

In a statement on CoinLab’s website, CEO Peter Vessenes said that Bitcoin investors have been consistently losing money because of technical difficulty with Mt. Gox.  

“What I hope is that Mt. Gox has this same interest in the good of Bitcoin, and Bitcoiners, and finds a way to work this out,” Vessenes wrote.

Mt. Gox hasn't made a statement on the issue yet, and it remains unclear whether CoinLab will accept payment for damages in Bitcoin. 

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