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Mt Gox to go for liquidation instead of bankruptcy

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(Credit: Mt. Gox) This image file contains the company logo of Tokyo, Japan-based online Bitcoin exchange Mt. Gox.Mt. Gox
April 16
8:17 AM 2014

Mt Gox has opted to file for liquidation in Tokyo instead of the originally planned bankruptcy proceedings. This was according to a Wall Street Journal report cited by TechCrunch.

The Japanese Bitcoin exchange has reportedly decided to scrap its plans to rebuild the company because of the magnitude of its problem. However, it is still hoping to be acquired sometime. In the event that the exchange pushes through with the liquidation, creditors will most likely be unable to recover their assets, the report explained.

Founder Mark Karpeles has been subpoenaed by the US Department of Treasury's Financial Crimes Enforcement Network (FinCEN). However, he announced yesterday that he will not fly to the US to answer the subpoena. His lawyer said he will first seek legal representation to address FinCEN's queries, the report detailed.

Mt Gox had filed for bankruptcy protection in February after it announced the loss of 850,000 bitcoin. In a controversial turn of events, 200,000 bitcoin were later on located in an old digital wallet. The exchange claimed the bitcoin loss was brought about by a bug called transaction malleability. Later, an ETH Zurich University research revealed that only 386 bitcoin have been lost, TechCrunch reported.

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