US Court Banned Auction of Domain Name

The sale of domain name was cancelled after the US District Court of Seattle issued a restraining order.

Photo: Hickydoo/Flickr

Photo: Hickydoo/Flickr

The auction of the web address has been cancelled after the US District Court of Seattle issued a restraining order.

The domain name is now owned by Tibanne KK, the company that belongs to Mt. Gox CEO Mark Karpeles. The web address was anticipated to be sold at the Heritage Auctions on July 24th in the US. Still, CoinLab, bitcoin company that has recently announced it will support Mt. Gox’s bankruptcy filing, intends to cancel the auction.

Tibanne KK was required to preserve and account for all its assets, including domain name. Roger Townsend, CoinLab lawyer, noted that the company will not allow selling the assets without an approval.

He stated: “We are pleased that the court entered an order requiring Tibanne to preserve and account for all of its assets, including any ownership it might have in Mt Gox, domain names or payments that it has received since the bankruptcy. This TRO sends a strong message to Tibanne that they cannot dissipate assets without the court’s approval.”

Heritage Auctions has not given any comments on the court order. However, according to the auction page, the event will be held on its original date.

Under the contract with Mt. Gox, CoinLab had to provide its services for the customers of Japan-based exchange in Canada and the US. Still, the partnership ended when CoinLab sued Mt. Gox for $75 million over failure to provide exclusive access to Bitcoin account information and withholding information necessary to market to customers. Mt. Gox then responded to CoinLab’s lawsuit with a counterclaim. However, neither of the lawsuits was resolved.

According to the restraining order, the sale will negatively influence the bankruptcy proceeding of Mt. Gox and the ability of creditors to return the funds.

The district court noted: “There is good cause to believe that immediate and irreparable damage to the court’s ability to grant effective final relief for plaintiff in the form of damage and monetary restitution will occur from the sale, transfer, assignment or other disposition or concealment by defendant Tibanne KK of their assets or records, unless Tibanne KK is immediately restrained and enjoyed by this order.”

Moreover, the order stated that prohibiting Tibanne KK and its employees to participate in the auction  is in the public interest as it might affect the control of Tibanne KK’ assets.

The order will expire within 14 days, after which the court will determine the extension.

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