Bitcoin exchange MT. Gox hit with $75m lawsuit

Bitcoin exchange MT. Gox hit with $75m lawsuit

A partnership between the world's biggest bitcoin exchange, MT. Gox, and US counterpart CoinLab has turned ugly, with the latter suing the former for $75 million.

Despite its global dominance of the market, Japan-based MT. Gox has struggled to gain real traction in the US, prompting it to agree a deal in November to outsource operations to CoinLab.

However, the relationship has quickly soured and CoinLab has now filed a breach-of-contract suit against its partner, claiming that it has "willfully failed to perform its obligations".

The initial deal stated that CoinLab would begin handling all of MT. Gox's North American transactions but the Japanese outfit continued to market to customers in the region, says the suit. It also allegedly failed to provide CoinLab with account reconciliation data and server access to help it keep up its end of the bargain.

These actions have "caused CoinLab to lose customers and threaten to cause substantial damage to CoinLab's business," claims the suit filed in Washington State.

The initial contract between the two exchanges provides for liquidated damages of $50 million in the event of breached exclusivity provisions but CoinLab is claiming that this probably underestimates actual damages and is asking for $75 million.

In a statement, CoinLab CEO Peter Vessenes says that he still wants to hammer out a deal with MT. Gox, insisting: "My continued hope is that Mt. Gox will do what's best for US and Canadian customers and settle this matter quickly, allowing our customers to transact in the US with a fully licensed and registered company that meets American standards for service quality."

In its own brief statement, MT. Gox says: "As we have just now received the complaint, neither Mt. Gox nor our legal team can make any official comment on the matter at this time, but we take this very seriously and will respond appropriately and quickly once we have had time to review it."

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