Chapter 15 Bankruptcy
Tokyo based ruined bitcoin exchange, MtGox, has filed for Chapter 15 bankruptcy in the United States. The action took place on Sunday, March 9th.
Under the United States law,
“The purpose of Chapter 15, and the Model Law on which it is based, is to provide effective mechanisms for dealing with insolvency cases involving debtors, assets, claimants, and other parties of interest involving more than one country.”
At the height of the MtGox fiasco, on February 28, the digital currency exchange filed for bankruptcy protection in Japan. By having filed for Chapter 15 in U.S., foreign factions and debtors are able to utilize the United States’ bankruptcy court systems.
MtGox’s insolvency case has now went beyond Japan and has reached across the ocean and entered in to the U.S. through the legal system.
This implies that the U.S. will be able to work with other countries and involved parties around the globe with the aim of better understanding and sorting out the mess that MtGox has created.
Hopefully, the customers of MtGox are able to find some relief.
MtGox Shuts Down
The digital currency exchange halted all withdrawal transactions last month without much warning to its customers. The troubled exchange further deleted all of its Twitter feeds and eventually shut down its website, which came as a shock. With the start of bankruptcy protection filing, the exchange revealed that it had lost close to 850,000 bitcoins which consisted of 100,000 bitcoins that belonged to the exchange itself. The total worth of bitcoin in question was around $500 million.
Mark Karpeles, the CEO of MtGox, claimed that the loss occurred due to a failure in the system. This allowed hackers access to the bitcoin currency exchanges network and transactions.
Yesterday, March 9th, unknown hackers gained access to Karpeles’ personal blog and allegedly charged him with fraud. They have accused MtGox of failure to account for all the bitcoins it claimed to have been lost because according to them much of the bitcoins are still being held by the exchange.
Even though the veracity of the post has not been completely verified, some Reddit users are claiming that the data matches their personal accounts.
Why is MtGox still holding back vital information is the question to be asked.
Stay tuned to Coinreport for further development.