Home / / Mt Gox gets Chapter 15 go-ahead from US bankruptcy court

Mt Gox gets Chapter 15 go-ahead from US bankruptcy court

Terminal bitcoin exchange granted legal protection

Mt Gox gets Chapter 15 go-ahead from US bankruptcy court

A US judge has granted defunct Tokyo-based bitcoin exchange Mt Gox leave to begin proceedings for Chapter 15 bankruptcy protection, Reuters reported.

The exchange, once the world’s foremost trader of the digital currency, came under scrutiny in Japan and the US when it closed operations earlier this year, following a series of cyber attacks that it claimed led to the loss of 850,000 bitcoins (around $500m).

A US bankruptcy court in Dallas, Texas approved the Chapter 15 provision, which Mt Gox filed in March to avoid seizure of its US assets by American customers in a class action lawsuit. The company has since come to terms with those plaintiffs in a settlement that awaits approval by a Chicago, Illinois court.

Two other customers, one from the US and one from Canada, have both agreed to share a 16.5% stake if Mt Gox is sold to Sunlot, a firm backed by child actor-turned entrepreneur Brock Pierce and venture capitalist William Quigley.

The two customers will also split the 200,000 bitcoins Mt Gox found after seeking bankruptcy protections as well as up to $20m in fiat currency, held by the administrator for Mt Gox.

Follow us to get the most comprehensive IT business news delivered fresh from our social media accounts on Facebook, Twitter, Youtube, and listen to our Weekly Podcast. Click here to sign up for our weekly newsletter on curated technology news in the Middle East and Worldwide.