Bitcoin firm Mt Gox wins brief US bankruptcy protection
- 11 March 2014
- From the section Technology
Troubled Japanese bitcoin exchange Mt Gox has won temporary bankruptcy protection in the US.
A judge in Dallas, Texas, agreed to protect the firm's assets and temporarily halt two US lawsuits while bankruptcy proceedings occur in Japan.
The firm filed for bankruptcy in Japan in February after losing about $473m (£284m) worth of customers' bitcoins to what it says was a hacking attack.
Mt Gox is scheduled to return to court on 1 April to extend the protections.
The firm filed for Chapter 15 protection in the US late on Sunday.
The filing asks the US bankruptcy court to recognize Mt Gox's bankruptcy in Japan and protect its US assets.
And it gives Mt Gox a temporary reprieve against two US lawsuits: one a class-action suit in Chicago filed by an Illinois resident, and another a $75m breach-of-contract case filed in Seattle by Coinlab Inc.
At the time of the Mt Gox theft, about 750,000 customer bitcoins were stolen as well as close to 100,000 of Mt Gox's own bitcoins.
That amounts to about 7% of all the bitcoins in existence.
Steven Woodrow, the lawyer leading the Chicago class-action suit, told Judge Harlin Hale that the case was a "massive fraud".
Mt Gox's attorney, David Parham, denied there was any fraud and said the firm and its founder, Mark Karpeles, were complying with the terms of the Japanese bankruptcy proceeding.