The collapsed bitcoin exchange Mt. Gox will be liquidated after a Tokyo court ordered continuation of bankruptcy proceedings, a court-appointed administrator has confirmed.
“I will implement the bankruptcy proceedings, in which the assets of the bankrupt entity will be managed and converted into cash. If funds for a distribution are secured, the liquidating distribution will be made,” said lawyer Nobuaki Kobayashi in a statement posted on the exchange’s website.
A meeting of Mt.Gox’s creditors is scheduled for July 23, but those the company owes money were alerted to the possibility of not recouping their investment.
The statement added that the bankruptcy trustee with the help of certain experts would probe the actual amount and value of bitcoins and cash held by the firm, according to Sky News.
The ruling by The Tokyo District Court, which was widely anticipated, indicates the demise of the bitcoin exchange.
At one point in time Mt.Gox, which was headed by chief executive Mark Karpeles, was the leading virtual currency exchange, accounting for up to 80% of global transactions.
Trouble for the exchange started in February after withdrawals were halted. The firm said that a software glitch exposed it to theft.
It applied for bankruptcy in Japan, saying it had lost 850,000 bitcoins valued at roughly $500 million. It has also filed for US bankruptcy protection.
Later, Mt.Gox said it recovered some 200,000 of the lost bitcoins in an electronic wallet.
The company’s boss has declined to travel to the US, where authorities seek to question him over the exchange’s downfall.
As The Economic Times reports, the statement by the bankruptcy trustee said that the lost coins would be probed to the extent possible. It said that the company has consulted the police regarding the matter.
Mr. Karpeles will also be investigated for liability as part of the bankruptcy proceedings. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
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