Mt. Gox CEO Ordered to Avail Himself in a U.S. Court to Answer Questions

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Mt. Gox CEO Ordered to Avail Himself in a U.S. Court to Answer QuestionsFormer chief executive of Mt. Gox, which was the world’s biggest bitcoin trading platform, has been directed to appear in an U.S. court to answer queries linked to its U.S. bankruptcy case, which was filed after the company went down with $400 million of client’s bitcoins.

Mark Karpeles was on Tuesday ordered by U.S. Bankruptcy Judge Stacey Jernigan to show up on April 17 in Dallas in Baker & McKenzie, the attorney firm representing Mt. Gox.

Mt. Gox clients want Karpeles, who is also the majority owner of the collapsed Japanese exchange, to state what happened to their 750,000 bitcoins and why the exchange shut down, which the company attributed to an attack by hackers.

Former Mt. Gox employees who spoke to Reuters said they noted as early as 2012 that client’s money was continually used to pay for operating expenses. Customers also allege that the money may have been stolen by insiders, Karpeles included.

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Mt. Gox filed for bankruptcy protection in Tokyo in February. Karpeles also moved in to a file a Chapter 15 Bankruptcy protection in a Dallas court, partly to block a class action filed by its U.S. customers in a Chicago federal court.

The Chapter 15 doesn’t grant automatic protection from creditors. Therefore, Mt. Gox must explain to the court on May 20 why it must be awarded such protection.

“If he avails himself of this court, my God, he is going to get himself over here,” said Jernigan, during the Bankruptcy Court proceedings in Dallas.

The attorney for U.S. clients Steven Woodrow said that since Karpeles controlled Mt. Gox’s financial records, he knows where the company’s money and assets are.

The case is In Re: Mt. Gox Co. Ltd, U.S. Bankruptcy Court, Northern District of Dallas, No. 14-31229.

To contact the reporter of this story; Deepak Tiwari at deepak@forexminute.com