Judge orders Mt Gox CEO to U.S. for questions on failed bitcoin exchange

Tue Apr 1, 2014 5:28pm EDT
 
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By Tom Hals

(Reuters) - The chief executive of Japan's Mt. Gox, once the world's leading bitcoin exchange, was ordered to the United States to answer questions related to its U.S. bankruptcy case, filed after the company lost $400 million of customers' digital currency.

U.S. Bankruptcy Judge Stacey Jernigan on Tuesday ordered Karpeles to appear on April 17 in Dallas at the offices of Baker & McKenzie, the law firm that represents Mt. Gox.

Mt. Gox customers want its chief executive and majority owner, Mark Karpeles, to explain why the exchange shut down in February and what happened to their 750,000 bitcoins, which the company said were stolen in a computer hacking attack.

Customers have alleged that insiders including Karpeles may have stolen the money, and employees told Reuters they were worried as early as 2012 that customers' money was being diverted for operating expenses.

Mt. Gox filed bankruptcy in February in Tokyo. Last month, Karpeles asked a Dallas court to grant Mt. Gox Chapter 15 bankruptcy protection, in part to put a stop to a class action that had been filed by U.S. customers in Chicago federal court.

Under Chapter 15, protection from creditors is not automatic. Mt. Gox must prove at a May 20 hearing that it should be granted such protection.

"If he avails himself of this court, my God, he is going to get himself over here," Jernigan said at the Bankruptcy Court hearing in Dallas at which she ordered Karpeles to appear.

John Mitchell, a Baker & McKenzie attorney, said the company may replace Karpeles as the "foreign representative" of Mt. Gox in the U.S. bankruptcy court, a suggestion that did not sit well with the judge.   Continued...

 
Mark Karpeles, chief executive of Mt. Gox, attends a news conference at the Tokyo District Court in Tokyo February 28, 2014. REUTERS/Yuya Shino