Mt. Gox files for US bankruptcy to halt class-action suit
The company is trying to temporarily halt a US lawsuit as a Tokyo court works through its bankruptcy
By Martyn Williams | Published: 18:50, 10 March 2014
Mt. Gox, the Tokyo-based Bitcoin exchange that collapsed last month after the loss of around $474 million worth of Bitcoins, has filed for bankruptcy protection in the U.S.
The petition, made late Sunday in the U.S. Bankruptcy Court in Dallas, will be heard later Monday -- a day before a court in Chicago is expected to rule on whether a U.S. class-action lawsuit can proceed against the company.
If successful in its Dallas filing, lawsuits in the U.S. against the company would be temporarily halted.
That would give Mt. Gox a little breathing room while the Tokyo District Court works through the collapse of the company and how best to proceed with bankruptcy.
The Chicago case is one of two that have been filed against Mt. Gox. A second case was filed in May 2013 by Coinlab alleging breach of contract.
Mt. Gox was once the largest Bitcoin trading exchange in the world, offering a platform where customers could buy and sell the virtual currency for real-world cash.
But that all came to a halt Feb. 25 when the company suspended trading and admitted it had lost around 750,000 Bitcoins owned by customers and around 100,000 of its own. An investigation into the loss is ongoing, but the company has said it believes a flaw in the Bitcoin software allowed an unknown party to steal the Bitcoins.
The filing estimates the company has more than 100,000 creditors, assets of 6.5 billion (US$63 million) and liabilities of 3.84 billion.
It was made on behalf of Mt. Gox by Mark Karpeles, the company's sole board member. Mt. Gox has two shareholders: Tibanne Co. Ltd., which owns 88 percent, and an individual, Jed MacCaleb, who holds 12 percent. MacCaleb developed the software that ran the service.
The case is 14-31229, MtGox Co. Ltd., in the U.S. Bankruptcy Court for the Northern District of Texas.
Martyn Williams covers mobile telecoms, Silicon Valley and general technology breaking news for The IDG News Service. Follow Martyn on Twitter at @martyn_williams. Martyn's e-mail address is email@example.com