Bloomberg News

Mt. Gox U.S. Bankruptcy Approved to Help Bitcoin Hunt

June 17, 2014

JAPAN MT GOX

Mark Karpeles, chief executive officer of Mt. Gox, sits in a taxi as he leaves the Tokyo District Court in Tokyo, Japan. Photographer: Tomohiro Ohsumi/Bloomberg

Mt. Gox Co., once the world’s largest bitcoin exchange, won approval of its U.S. bankruptcy filing, giving a boost to a Japanese investigation into the disappearance of 650,000 units of the digital currency.

U.S. Bankruptcy Judge Stacey G. Jernigan said today in Dallas she has “ample legal authority” to accept the U.S. filing and recognize Mt. Gox’s Japanese bankruptcy as the foreign main proceeding. The ruling empowers the company’s Japanese trustee to examine witnesses, gather and review evidence, and oversee assets in the U.S., such as servers.

“This is really going to be all about the customers,” who make up almost all of the creditors, and trying to get them a recovery, Jernigan said at a hearing.

Mt. Gox in February sought court protection in Japan after losing 850,000 bitcoins, then valued at about $473 million. Customers lost about 750,000 and Mt. Gox lost about 100,000 of its own. The company later found 200,000 in an old-format digital wallet.

The exchange sought U.S. protection March 9 under Chapter 15 of the bankruptcy code. Chapter 15 allows a bankruptcy court to protect the U.S. assets of foreign companies that are restructuring or liquidating abroad, help organize creditors, and enforce rulings from the foreign proceedings.

The Japanese court put Mt. Gox into liquidation in April and appointed a trustee to investigate the disappearance of the bitcoins, which the company said in court papers was probably the result of a “massive theft.”

The U.S. bankruptcy is In re MtGox Co., 14-bk-31229, U.S. Bankruptcy Court, Northern District of Texas (Dallas).

To contact the reporter on this story: Michael Bathon in Wilmington at mbathon@bloomberg.net

To contact the editors responsible for this story: Andrew Dunn at adunn8@bloomberg.net Stephen Farr, Peter Blumberg


Burger King's Young Buns
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus