Mt. Gox Gives up Plans of Rebuilding, Goes for Liquidation

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Mt. Gox Gives up Plans of Rebuilding, Goes for Liquidation

Finding it hard, Mark Karpeles, CEO of bankrupt Japan-based Bitcoin exchange Mt. Gox, has given up plans to rebuild under bankruptcy protection. The lawyers representing Mark Karpeles say that their client has asked a Tokyo court to allow it to be liquidated. The major reason behind the appeal is that it is becoming difficult for Karpeles as the procedure is complex.

Also, the legal team claims that as there is lack of realistic rehabilitation plans for the Tokyo-based exchange, the client does not have other option that moving for liquidation. Mt. Gox was once the world’s biggest Bitcoin exchange collapsed earlier this year and then filed for bankruptcy protection in Japan last month.

Mt. Gox claims that it lost more than 850,000 Bitcoins which are worth around $454 million if the latest exchange rates are applied. Though it later on claimed that it found around 200,000 of the lost Bitcoins in its cold storage, investors and customers are still waiting for their money. A parallel inquiry is also going on in the US; however, Mark Karpeles won’t travel to the US to attend it.

The news regarding the decision regarding the non-appearance in the US to attend the inquiry came when Mt. Gox lawyers told a federal judge this week about it. Earlier, Mark Karpeles had filed an emergency motion stating that he needed more time before choosing whether to appear for formal questioning in the US.

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Mt. Gox Also Facing Legal Battle in US

The latest decision to file for liquidation is also aimed at addressing the issue that Mark Karpeles facing, he was subpoenaed by the US Treasury department. The US Bankruptcy Judge Stacey Jernigan ordered Karpeles to submit to questioning on 2nd April and even threatened to remove key bankruptcy protections granted to Mt. Gox KK, the company’s Japanese entity.

On the other hand, Steve Woodrow, a partner at Edelson law firm, the agency overseeing the US class action against Mt. Gox said that his team would be able to step up its fact-finding efforts, in case protection was eliminated.

Woodrow also made it clear that in the event that the stay will be lifted, his team will proceed to the Northern District of Illinois and ask that the expedited discovery and asset freeze that has been implemented for non-debtors are extended to Mt. Gox KK as well.

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