Former bitcoin exchange Mt. Gox is officially dead, now that the Tokyo District court has denied its appeal for rehabilitation and appointed the lawyer Nobuaki Kobayashi as a provisional administrator to start the process of unwinding the failed company, reports Ritsuko Ando at Reuters.
“The Tokyo District Court recognized that it would be difficult for the company to carry out the civil rehabilitation proceedings and dismissed the application for the commencement of the civil rehabilitation proceedings,” said Kobayashi.
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Kobayashi will manage Mt. Gox’s assets until a permanent bankruptcy trustee is named by the courts. Leading Mt. Gox through bankruptcy will be a new kind of challenge for whomever the courts ultimately pick. Even if Bitcoin has become well-known in the financial world, regulators still have a lot of catching up to do. Mt. Gox initially lost 850,000 bitcoins, worth several hundred million dollars, but then found 200,000 implying that it could be possible to track down even more of the lost digital currency.
Between the technological challenges and regulatory ambiguities surrounding bitcoin, bankruptcy proceedings probably won’t finish soon.
Mt. Gox CEO will likely be investigated
Even though Mt. Gox CEO Mark Karpeles won’t be allowed to try to rebuild the company, that doesn’t mean he can just wash his hands of the situation either. He recently said that he wouldn’t fly back to the US to answer questions about the exchange’s collapse and subsequent bankruptcy, but he may have to answer them all the same if he stays in Japan.
“It is expected that, if the bankruptcy proceedings commence, an investigation regarding the liability of the representative director of the company will be conducted as part of the bankruptcy proceedings,” the Tokyo District court said in its ruling.
The Mt. Gox bitcoin brand could be sold on
While Mt. Gox is being liquidated, its name could survive the proceedings. There have been offers to buy the company, and even after all the negative publicity there’s something to be said for choosing a name with international recognition. Rehabilitating a poor image could be a better way to start a new exchange than being yet another startup that no one has heard of.
Kobayashi has said that a sale isn’t out of the question, but he may simply be stating the obvious: someone else is going to take over during bankruptcy proceedings so it’s probably not up to him in the end. And if selling rights to the name means paying back a larger percentage of Mt. Gox’s debt, it will be hard for the trustee to justify saying no.