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Mt. Gox filing for liquidation in Japan, CEO not coming to US courts

updated 03:30 pm EDT, Wed April 16, 2014

Concern about rebuilding surface, users likely to get near nothing

Bankrupt bitcoin exchange Mt. Gox has apparently abandoned its goal of rebuilding itself, and now is asking a Japanese court to allow complete liquidation. Should the Japanese court approve of the move, it will appoint a trustee which will assume control of all Mt. Gox assets from CEO Mark Karpeles. Additionally, US courts overseeing the Chapter 15 bankruptcy have been informed that regardless of judicial decree, Karpeles will not appear in court to answer questions as ordered by bankruptcy Judge Stacey Jernigan.

Approximately 750,000 Bitcoins belonging to customers and 100,000 coins belonging to the exchange, valued at over $450 million dollars as of March 1, were said to be lost in the hack when the Mt. Gox systems were breached, allegedly unnoticed over the course of years.

The problems with the shuttered exchange may have been evident to employees as early as two years before its well-publicized meltdown. Employees confronted CEO Mark Karpeles over money-handling in the organization, with the group alleging that customer funds were being diverted improperly to other expenses, such as a 3D printer, and a modified car imported from the UK for the CEO.

Adding to Karpeles' woes, the embattled CEO has been ordered to appear before the US Department of Treasury's Financial Crimes Enforcement Network to answer questions. Attorneys for Karpeles said that the order "did not specify topics for discussion." Legal counsel added that "until such time as counsel is retained and has an opportunity to 'get up to speed' and advise Mr. Karpeles, he is not willing to travel to the U.S."

Hackers claimed to have stolen information pointing to a large amount of the crypto currency still in the exchange's hands. Mt. Gox also notes that it "found" 200,000 Bitcoins in an unused virtual wallet recently.



By Electronista Staff
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