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April 16, 2014

Why Bitcoin exchange Mt. Gox is definitely dead

Tokyo-based Mt. Gox files for liquidation.

By Joe Curtis

The bankrupt Bitcoin exchange Mt. Gox has abandoned plans to rebrand and relaunch, having now filed for liquidation with a Tokyo court, according to the Wall Street Journal.

The Japan-based cryptocurrency exchange declared bankruptcy back in February after losing an estimated 850,000 bitcoins through an alleged flaw in its implementation of the Bitcoin code that it claimed was manipulated by hackers.

CEO Mark Karpeles initially took the body offline temporarily, and had plans to rebuild under bankruptcy protection.

However, the WSJ has cited people familiar with the situation who claim the complexity of such a procedure and lack of realistic rehabilitation plans for the business in Japan has forced the exchange to seek liquidation.

Lawyers for Karpeles indicated earlier this week that he will refuse a US court’s summons asking him to answer questions over the missing bitcoins.

Their statement read: "Mr. Karpeles is now in the process of obtaining counsel to represent him with respect to the FinCEN Subpoena. Until such time as counsel is retained and has an opportunity to ‘get up to speed’ and advise Mr. Karpeles, he is not willing to travel to the U.S."

Karpeles has not been charged with any offences since Mt. Gox went bankrupt.

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The lost coins amount to around 6% of the overall 12.4m bitcoins currently in circulation, and it remains unknown whether customers will have their bitcoins recovered.

However, an old wallet – thought to be redundant – was recently found to contain 200,000 bitcoins, reducing the total missing bitcoins to 650,000, according to Mt. Gox.

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