Court rejects bankruptcy protection for Mt. Gox

Published on NewsOK Modified: April 16, 2014 at 8:45 am •  Published: April 16, 2014
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TOKYO (AP) — The Mt. Gox bitcoin exchange in Tokyo is headed for liquidation after a court rejected its bankruptcy protection application.

Mt. Gox said Wednesday the Tokyo District Court decided the company, which was a trading platform and storehouse for the bitcoin virtual currency, would not be able to resurrect itself under a business rehabilitation process filed for in February.

An administrator will try to sell the company's assets, and many creditors, including those who had bitcoins with the exchange, are unlikely to get any money back.

After Mt. Gox went offline in February, its CEO Mark Karpeles said 850,000 bitcoins worth several hundred million dollars were unaccounted for, blaming a weakness in the exchange's systems.

Later, Mt. Gox found 200,000 of the bitcoins, changing the estimate for the lost virtual currency to 650,000 bitcoins, although the exact amount is still under investigation. Mt Gox. has suggested the bitcoins were stolen. The company has not been able to confirm the bitcoin balances of its users.

Bitcoins were created in 2009 by a mysterious figure or group known as Satoshi Nakamoto and are used for transactions across borders without third parties such as banks. They have also become an investment craze.

Mt. Gox said in a statement that bankruptcy proceedings are likely to start in the U.S. along with the action in Japan, but the timing is still unclear.

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