Feeds

Sueball-slingers seek stake in bankrupt Bitcoin blunder bunker MtGox

Stung investors offer to settle class actions for slice of new exchange, coinage

Boost IT visibility and business value

US and Canadian Bitcoin investors have offered to settle their class-action lawsuits against the bankrupt MtGox exchange in return for a stake in the firm and the return of any of the digital currency it still holds.

The Bitcoin traders told the courts that they support a plan by Sunlot Holdings to buy up MtGox and will drop their suits in return for a 16.5 per cent stake in the exchange after the sale and their share of the Bitcoins it still holds.

MtGox hit the skids earlier this year, applying for bankruptcy protection in both Japan and the US after saying it had lost 850,000 Bitcoins, including 750,000 belonging to its customers, worth over $400m. Investors immediately sued the firm for their lost investments, alleging, among other things, that the exchange had not adequately securely stored or timeously detected the theft of those coins - and had not sufficiently secured investors against such an eventuality.

The exchange told the Tokyo District Court earlier this month that it had no viable plan to revive itself and sought approval to be liquidated and/or sell itself off. As well as having the business itself to see off, MtGox has claimed to have found around 200,000 of the Bitcoins it lost, giving it some reasonable assets to attract a white knight.

In a court filing in the US, the investors said that the proposed settlement was an “extraordinary turn of events” that could potentially fully compensate all customers of the exchange and keep MtGox running.

“The proposed settlement (and reorganization plan) now before the Court is a more than fair, reasonable and adequate result for the proposed settlement class and is well within the range of possible approval.

"Given its substantive terms, the relief provided to the class and exchange members globally, and the support of an international cast of interested parties, the Court should not hesitate to grant preliminary and ultimately, final approval to the deal,” the filing said.

The settlement plan calls for the immediate distribution of any Bitcoins or currency still held by MtGox to members of the exchange, including the 200,000 units of the e-currency that turned up. A new exchange would then be created with existing MtGox customers holding a 16.5 per cent stake.

In addition, MtGox founder Jed McCaleb and chief marketing officer Gonzague Gay-Bouchery have agreed to cooperate with any continued litigation “against the non-settling defendants”, which include CEO Mark Karpeles.

The new exchange has also promised to try to get to the bottom of how MtGox lost everyone’s money and attempt to recover it.

The settlement will need the approval of courts in the US and Canada and the exchange’s sale to Sunlot will also need the nod from the Tokyo bankruptcy court. Sunlot has been trying to buy MtGox since it filed for bankruptcy in January and is offering to pay a token one Bitcoin (currently hovering just under $450), according to the Wall Street Journal.

Maximizing your infrastructure through virtualization

More from The Register

next story
Stick a 4K in them: Super high-res TVs are DONE
4,000 pixels is niche now... Don't say we didn't warn you
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
Philip K Dick 'Nazi alternate reality' story to be made into TV series
Amazon Studios, Ridley Scott firm to produce The Man in the High Castle
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Bose says today is F*** With Dre Day: Beats sued in patent battle
Music gear giant seeks some of that sweet, sweet Apple pie
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
Too many IT conferences to cover? MICROSOFT to the RESCUE!
Yet more word of cuts emerges from Redmond
Joe Average isn't worth $10 a year to Mark Zuckerberg
The Social Network deflates the PC resurgence with mobile-only usage prediction
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Application security programs and practises
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Securing Web Applications Made Simple and Scalable
Learn how automated security testing can provide a simple and scalable way to protect your web applications.