US court summons Mt Gox CEO

Karpeles needs to answer questions, says judge

Tags: JapanMt Gox (mtgox.com)USA
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US court summons Mt Gox CEO Some US-based Mt Gox customers suspect Karpeles of stealing their digital currency. (Getty Images)
By  Stephen McBride Published  April 2, 2014

A US bankruptcy judge has ordered Mark Karpeles, CEO of closed-for-business bitcoin exchange Mt Gox, to attend a deposition session in the US and answer questions about the loss of $400m of its clients' virtual currency, Reuters reported.

Japan-based Mt Gox claims 750,000 bitcoins were stolen during a cyber attack in February, leading to the world's former leading bitcoin exchange shutting down operations.

A subsequent Chicago, US-based class action resulted in Mt Gox filing for Chapter 15 bankruptcy protection in the US, which was granted on 10 March in a Texas court.

Bankruptcy Judge Stacey Jernigan yesterday ordered Karpeles to appear on April 17 in Dallas at the offices of Mt. Gox's legal representatives Baker & McKenzie. Chapter 15 protection does not automatically extend to creditors and the company will be required to make a case for such protection at a separate hearing on 20 May

"If he [Karpeles] avails himself of this court, my God, he is going to get himself over here," Jernigan said at the Bankruptcy Court hearing in Dallas at which she ordered Karpeles to appear.

According to Reuters, when John Mitchell, a Baker & McKenzie attorney said that Mt Gox was considering appointing an alternative representative to represent the company as a stand-in for Karpeles, Jernigan replied: "He filed this case."

Jernigan said deposition questioning of Karpeles would be limited to determining a basis for permanent bankruptcy protection. This means that the deposition is unlikely to cover customers' allegations that Karpeles may have stolen their money, with the help of other insiders. Reuters also reported concerns from Mt Gox employees, who said they suspected as early as 2012 that customer funds were being used to cover operating expenses.

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