Mt. Gox Abandons Rebuilding Plans and Files for Liquidation, Says WSJ

| Updated
by Konstantin Lazarev · 3 min read
Mt. Gox Abandons Rebuilding Plans and Files for Liquidation, Says WSJ
Mt. Gox, once the largest and most popular Bitcoin exchange, suspended customer withdrawals on February 7, 2014 claiming a fundamental flaw existed in Bitcoin that affected all transactions. Photo: Jason Benjamin/Perfect Hue

Defunct Bitcoin exchange Mt. Gox has asked a Tokyo court for permission to be liquidated, according to the Wall Street Journal, apparently abandoning plans to rebuild under bankruptcy protection.

Mt. Gox, once the biggest bitcoin exchange in the world, is most likely to be closed down, as it has asked Japanese court for liquidation instead of resuscitating its business under the bankruptcy protection, said the Wall Street Journal.

According to newspaper’s sources, Mt. Gox made a decision to abandon its previous plans to rebuilt as it was facing a number of difficulties. The reasons included the problems of holding meetings with creditors all over the world and a lack of clear rehabilitation plans, as previous ones were too complex and unrealistic.

Nevertheless, the exchange still hopes to find a buyer. Moreover, if Mt. Gox exchange does definitely sign for liquidation, it is more unlikely that creditors will recoup less of their investment.

Even though Mark Karpeles, the CEO of Mt.Gox, received a subpoena requesting him to be in US on Thursay, he said that he would not appear in US Bankruptcy Court in Dallas. The Mt. Gox’s lawyers said he wanted to first find legal statements in respect the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) questions.

In February Mt. Gox asked for a buncruptcy protection after noticing that it had lost around $850,000 bitcoin. The exchange claimed that the security breakdown happened in their system and hackers attacked the exchange stealing all 850,000 bitcoins.

But after cybercryminals accused the exchange of keeping some of the missed bitcoins, the exchange announced that it had found 200,000 bitcoins in the old digital wallet.

Nevertheless, recent research by ETH Zurich University revealed that the company only lost 386 bitcoins to the a hacker’s attack.

Mark Karpeles, the CEO of Mt. Gox, is likely to be investigated in regard to the exchange’s shut down, said the provisional administrator, lawyer Nobuaki Kobayashi.

“The Tokyo District Court recognized that it would be difficult for the company to carry out the civil rehabilitation proceedings and dismissed the application for the commencement of the civil rehabilitation proceedings,” Kobayashi said.

On Wednesday, the court assigned Kobayashi to take control of the echange’s assets until bankruptcy proceedings officially start.

“It is expected that, if the bankruptcy proceedings commence, an investigation regarding the liability of the representative director of the company will be conducted as part of the bankruptcy proceedings,” court said.

Kobayashi mentioned that the offer, made last month by investors group, to purchase the company for only 1 BTC will be taken into consideration.

Bitcoin News, Cryptocurrency News, News
Konstantin Lazarev
Co-Founder & CIO Konstantin Lazarev

Konstantin has always been at the forefront of the global virtual currency scene since first discovering cryptocurrencies the same year that Satoshi Nakomoto created bitcoin in 2009. Konstantin is the owner of a number of small businesses in trucking and mobile development, and co-founded CoinSpeaker in 2014. He graduated from Belarusian State University in 2009 with a degree in Mathematics and Mechanics. You can contact Konstantin via [email protected]

Related Articles