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Bitcoin exchange Mt Gox files bankruptcy in the US

Nothing to sue there
Tue Mar 11 2014, 09:18

BITCOIN EXCHANGE Mt Gox has filed for bankruptcy protection in the US, and has a temporary stay against lawsuits.

The exchange already is under court protection in Japan, and told its users that they should expect the answers to their questions there. This week a judge in Dallas, Texas afforded it bankruptcy protection in the US.

Mt Gox left a hole in Bitcoin accounts worth as much as $750m, according to its statements. There have been suggestions that either the loss was higher or that the outfit has kept some of the cash supposedly vanished. Mt Gox has not responded to these accusations.

According to Reuters, there was opposition to the bankruptcy that asked Judge Harlin Hale to deny the firm bankruptcy protection.

"This case involves a massive fraud," said Steven Woodrow, an attorney leading a class action lawsuit.

"They claim incredibly that they will preserve assets and protect assets by entrusting the servers and other property to [Mt Gox CEO] Mr Karpeles. Respectfully, your honor, that is the definition of the fox guarding the henhouse."

The official line from Mt Gox CEO Mark Karpeles is that losses were noticed in February and that the outfit lost 100,000 of its own Bitcoins.

"At the start of February 2014, illegal access through the abuse of a bug in the Bitcoin system resulted in an increase in incomplete Bitcoin transfer transactions and we discovered that there was a possibility that Bitcoins had been illicitly moved through the abuse of this bug," said Karpeles in a statement.

"As a result of our internal investigation, we found that a large amount of Bitcoins had disappeared. Although the complete extent is not yet known, we found that approximately 750,000 Bitcoins deposited by users and approximately 100,000 Bitcoins belonging to us had disappeared."

Yesterday documents were released that appear to show that this is not the case. µ


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