Feeds

Borked Bitcoin bunker MtGox in administration: Lawyer seizes control

$500m in BTC up in smoke

Beginner's guide to SSL certificates

Collapsed Bitcoin exchange MtGox has been put into administration by a court in Japan, where the website is based, after it became clear the site's chances of recovery are nil.

The biz, which has mislaid half a billion dollars of BTC, was granted protection from creditors in February by the Tokyo District Court as it battled to survive.

But today an administrator was appointed by the bench to effectively seize control of the exchange, paving the way for bankruptcy proceedings and the liquifying of assets.

"I, as the provisional administrator, will administer the assets of the company under the supervision of the Tokyo District Court," lawyer Nobuaki Kobayashi said in a statement [PDF].

"I will strive to fairly and equitably administer the company’s assets, both domestically and internationally, by attempting to utilize certain foreign procedures, including a Chapter 15 filing in the United States of America.

"The future outlook is that, although it is subject to the decision by the Tokyo District Court, it is expected that the commencement of bankruptcy proceedings will be ordered."

The BTC trading website had formally applied to the court for time to rebuild, but this was today shot down by the bench. "The dismissal of the application for commencement of a civil rehabilitation procedure will create great inconvenience and concerns to our creditors for which we apologize," the exchange's founder Mark Karpelès said afterwards in a statement [PDF].

People familiar with the legal battle whispered to the Wall Street Journal that contacting creditors all over the world was proving too difficult for the company, and that the website's staff had run out of ideas for fixing the mess. This led to the court appointing an administrator to take over the exchange.

MtGox hit the rocks in February after somehow misplacing about 850,000 Bitcoins – today worth $500m dollars – 750,000 of which belonged to its customers, and 100,000 was its own private stockpile. It claimed the missing virtual currency was stolen by fraudsters, and filed for bankruptcy protection with liabilities of 6.5 billion yen ($64m).

At the end of last month, the exchange found a stash of 200,000 BTC locked in its digital vault, which if liquified will still leave plenty of creditors out of pocket. But if a buyer can be found for MtGox, people owed money could have a slice of future earnings, it's been suggested.

"MtGox Co., Ltd. intends to fully cooperate with the provisional administrator including by handing over to the provisional administrator current negotiations with sponsor candidates to maximize the distribution to all creditors following a transfer of the business to a sponsor," Karpelès said today.

Speaking of cooperation, the exchange's founder was supposed to travel to the United States this week to face questions about the bankruptcy and a subpoena from the the US Department of Treasury's Financial Crimes Enforcement Network (FinCEN) as part of a related civil action suit against the exchange.

But MtGox's lawyers said Karpelès needed to hire new representation to defend against FinCEN's issues, and he wouldn't be going to the US until he got it. They've asked the US courts to wait until early next month, although they wouldn't guarantee he'd show up then either. ®

The next step in data security

More from The Register

next story
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
JINGS! Microsoft Bing called Scots indyref RIGHT!
Redmond sporran metrics get one in the ten ring
Driving with an Apple Watch could land you with a £100 FINE
Bad news for tech-addicted fanbois behind the wheel
Murdoch to Europe: Inflict MORE PAIN on Google, please
'Platform for piracy' must be punished, or it'll kill us in FIVE YEARS
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Found inside ISIS terror chap's laptop: CELINE DION tunes
REPORT: Stash of terrorist material found in Syria Dell box
Sony says year's losses will be FOUR TIMES DEEPER than thought
Losses of more than $2 BILLION loom over troubled Japanese corp
prev story

Whitepapers

Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Beginner's guide to SSL certificates
De-mystify the technology involved and give you the information you need to make the best decision when considering your online security options.