Mt. Gox CEO Ordered to Show Up for Questioning in the US Reuters

If Mt. Gox wants any kind of bankruptcy protection in the US, Karpeles has to travel

By on April 2nd, 2014 12:03 GMT

Mt. Gox is facing a lot of troubles after it filed for bankruptcy at the end of February and Mark Karpeles, the company’s CEO, isn’t doing much better.

According to Reuters, the judge ordered Karpeles to travel to Dallas, Texas, to take part in a formal deposition. The CEO wanted the deposition to take place in Taipei, Taiwan, but lawyers representing customers in the United States opposed the idea.

Furthermore, the judge also suggested that the journey would be a good idea if Karpeles wanted to extend the company’s bankruptcy protection in the United States.

According to US law, protection from creditors is not granted automatically to bankrupt companies. In Japan, the authorities have already offered Mt. Gox such protection, effectively shielding the company from lawsuits from this area.

After filing for bankruptcy in Japan, the company also did the same in the US. Chapter 15 bankruptcy protection was asked by Karpeles in a Dallas Court. If granted, this will put a stop to the class action that has been filed by US customers.

Karpeles will have to make an appearance at the offices of his legal representative, Baker & McKenzie, on April 17.

Mt. Gox had been having issues for weeks before the entire company imploded and it filed for bankruptcy in Japan. First, the company announced that withdrawals would be frozen for a while, as it worked to fix a bug integral to the Bitcoin concept, which permitted users to duplicate transactions.

As days went by, people started demanding access to their own money and to the site, but nothing happened in this direction. To top it all off, for over a day, deposits were halted too, as the company said that it was working on the platform.

As the end of February was approaching, in the last weekend, Mt. Gox’s CEO, Mark Karpeles, announced that he was quitting his position as board member inside the Bitcoin Foundation. Then, the site went down, only to return many hours later carrying a message in which technical problems were claimed as cause and all transactions were stopped.

The same day, an internal document made its way online, revealing that the company was on the verge of bankruptcy and that over 740,000 Bitcoins had disappeared. It was later revealed that this was true and that the trove of coins came on top of another 200,000 Bitcoins belonging to the company.

Comments