MtGox files for US bankruptcy protection

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iol scitech march 11 MtGox AFP The MtGox exchange went dark in February, shortly after it blocked Bitcoin withdrawals.

New York - The troubled Bitcoin exchange MtGox filed for protection under US bankruptcy law on Monday, 10 days after doing the same in Japan after a huge loss of the digital currency, a court document showed.

The Japanese firm is now protected temporarily under Chapter 15 of US bankruptcy law for foreign firms.

A bankruptcy court in Dallas, Texas accepted the request and will make a definitive ruling in April, the document said.

Chapter 15 protects assets in the US of foreign firms facing insolvency procedures in their home countries.

Besides protection of its assets, the exchange has requested the suspension of actions in the US that jeopardise its efforts to restructure abroad, it said in its court filing.

MtGox faces a class action lawsuit filed February 27 in Illinois by an American named Gregory Greene. He cited deceitful and illegal actions by MtGox, according to a court document.

“With respect to the Chapter 15 bankruptcy proceedings, today was a big victory for Mt. Gox's victims. Mt. Gox tried to have all US proceedings 'stayed' or frozen while it goes at its own pace in the Japanese bankruptcy,” Greene's attorney Steven Woodrow said in an email to AFP.

“We are working with attorneys from around the globe who are planning on filing additional cases in the near future.”

MtGox Bitcoin exchange filed for bankruptcy February 28 in Japan, CEO Mark Karpeles saying it had lost nearly half a billion dollars' worth of the digital currency in a possible theft.

The company's lawyer said 750 000 Bitcoins belonging to customers had gone, along with MtGox's own store of the currency, which she said was around 100 000 units. - Sapa-AFP

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