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No Plans for Mt. Gox to Restart the Business After Filing Bankruptcy Due to $425 Million Worth of Loss Due to Hacking

Mt. Gox’s loss amounting to millions of dollars of the new kind of currency (bitcoin) resulting to its shut down in early 2014. Many its former North American customers were given the “best option” – an out-of-court deal to end their legal action.

 

New York, NY -- (ReleaseWire) -- 04/30/2014 -- Tokyo-based bitcoin exchange Mt. Gox finally filed a bankruptcy this April due to the loss of bidding for reorganization, a bankruptcy court in Japan announced on April 16, 2014. It will be noted that Mt. Gox collapsed earlier this year due to a loss of a total of $425 million worth of bitcoin currency.

Mt. Gox’s CEO Mark Karpeles’ was made liable in the collapse of the business and is currently being investigated. This was according to the court-appointed administrator Attorney Nobuaki Kobayashi as posed in Bitcoin exchange’s website.

A number of fury US and Canadian customers of Mt. Gox filed a class-action court case as they seek compensation for their losses from bitcoin trading.

As can be remembered, Karpeles asked a Tokyo bankruptcy court last February 28 to have its creditors be protected while the exchange is undergoing restructuring and reorganization. It was due to a hacking of the digital wallets that stored the bitcoins of their customers which resulted to a lost of 850,000 bitcoins (which was later on reduced to 650,000 total as Mt. Gox discovered 200,000 bitcoin in an unused wallet). After a week this incident, another bitcoin exchange company, Flexcoin, shut down claiming that another incident of hacking occurred robbing a total of 896 bitcoins valued at $600,000.

Mt. Gox’s rehabilitation application was later on dismissed as, according to Kobayashi, “It was too difficult for the company to carry out. And Karpeles has lost his authority to administer the company’s asset.”

Mt. Gox is scheduled to be liquidated after Karpeles announced that he had no prospects of restarting the business. According to Karpeles, “The dismissal of the company's application for rehabilitation "created great inconvenience and concerns to our creditors, for which we apologize.”

As its’ customers “best option”,former customers will share 16.5% of Sunlot (a company who has filed an application to take over and dispose Mt. Gox’s assets), and will receive a share of the 200,000 bitcoins and $20 million in cash which is still being held by Mt. Gox.

Kobayashi stated that he wil l try his best to be fair and administer the company’s assets fairly. He is currently working with a US bankruptcy court (Edelson law) where Mt. Gox also filed for relief. However, he mentioned that it would already be unlikely for Mt. Gox to restart the exchange.

Mt. Gox used to be the world’s largest bitcoin exchange. Bitcoin exchange is a peer-to-peer online payment system.

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