Bitcoin fallout: Mt Gox files for US bankruptcy protection
Moneylife Digital Team 11 March 2014

Besides protection of its assets, Mt Gox has requested the suspension of actions in the US that jeopardise its efforts to restructure abroad

Troubled Bitcoin exchange Mt Gox has filed for protection under US bankruptcy law, 10 days after doing the same in Japan after a huge loss of the digital currency, a court document showed.


The Japanese Exchange is now protected temporarily under Chapter 15 of US bankruptcy law for foreign firms.


A bankruptcy court in Dallas, Texas accepted the request and will make a definitive ruling in April, the document said.


Chapter 15 protects assets in the US of foreign firms facing insolvency procedures in their home countries.


Besides protection of its assets, the exchange has requested the suspension of actions in the US that jeopardise its efforts to restructure abroad, it said in its court filing.


Mt Gox faces a class action lawsuit filed 27th February in Illinois by an American named Gregory Greene. He cited deceitful and illegal actions by MtGox, according to a court document.


“With respect to the Chapter 15 bankruptcy proceedings, today was a big victory for Mt Gox’s victims. Mt Gox tried to have all US proceedings ‘stayed’ or frozen while it goes at its own pace in the Japanese bankruptcy,” Greene’s attorney Steven Woodrow said in an email to AFP.


“We are working with attorneys from around the globe who are planning on filing additional cases in the near future.”


Mt Gox Bitcoin exchange filed for bankruptcy on 28th February in Japan, CEO Mark Karpeles saying it had lost nearly half a billion dollars’ worth of the digital currency in a possible theft.


The company’s lawyer said 750,000 Bitcoins belonging to customers had gone, along with Mt Gox’s own store of the currency, which she said was around 100,000 units.

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