Japanese court rejects Mt.Gox users' claim for compensation

A Japanese court has rejected a man’s claim for Bitcoin on the grounds that he has no ownership of the digital currency.

It is reported that since the bankruptcy of Japanese Bitcoin exchange Mt. Gox in 2014, the Kyoto man who appealed has lost a total of 485 Bitcoins worth 31 million yen (about 1.56 million yuan).

However, the Tokyo District Court ruled that Bitcoin “is not applicable to ownership” and rejected the plaintiff’s claim.

Judge Masumi Kurachi said that the concept of property rights in Japanese law only applies to tangible assets that occupy space and can be exclusively controlled. So according to this definition, Bitcoin has no ownership. During the trial, the judge gave an example, saying that since transactions must be connected to a third party, there is no exclusive ownership of Bitcoin.

Since Mt.Gox filed for bankruptcy protection in 2014, a total of 850,000 bitcoins have gone missing, and platform users have been trying to use legal means to obtain compensation. Not long ago, there was a class action lawsuit in the United States for claims against Mt.Gox's bankruptcy, and the lawsuit was eventually settled out of court.

Bitcoin developer Mike Hearn said in an interview that he was surprised by the court's ruling. However, after all, many countries still have no final conclusion on the legal status of Bitcoin.

He said that even if judicial approval is obtained, users are unlikely to successfully obtain compensation from Mt. Gox.

“Obviously, Mt. Gox is unable to pay the claims, so it remains unknown how the final payment will be resolved.”

Hearn said the unknowns hanging over bitcoin have begun to hinder the digital currency's growth.

“For more established companies, the biggest and most common factor is uncertainty around Bitcoin regulation.”

Mt.Gox CEO Mark Karpeles was arrested for his involvement in the loss of bitcoins on the platform. Police suspect that he had accessed the Mt.Gox computer system without permission, manipulated data, and expanded his own account.

According to The Japan Times, Mt. Gox ran out of funds six months before filing for bankruptcy protection in February 2014.

Investigative sources told the newspaper that Mt. Gox had been operating at a deficit on its balance sheet and using some customers’ funds to pay others.

Finance Minister Taro Aso said last week that the government would carefully consider establishing relevant laws for digital currencies, such as introducing regulations or a licensing system for the digital currency market, The Japan Times reported.

"We need to study how governments regulate the use of digital currencies and address the global risks that Bitcoin could be used for money laundering, terrorist activities and more."