MtGox files Chapter 15 bankruptcy amid bitcoin theft investigation

By Caroline Salls

Pittsburgh, March 10 - MtGox Co., Ltd. made a Chapter 15 bankruptcy filing on Sunday in the U.S. Bankruptcy Court for the Northern District of Texas to gain recognition of its Japanese civil rehabilitation proceeding.

Foreign representative Robert Marie Mark Karpeles said in a statement filed with the court that MtGox halted all bitcoin withdrawals by its customers on Feb. 7 after it "became subject to a massive theft or disappearance of bitcoins being held by MtGox both on behalf of its customers and itself.

The company said it suspended all trading on Feb. 25 after internal investigations revealed hundreds of thousands of bitcoins had been stolen or disappeared.

The Japanese rehabilitation proceeding was filed on Feb. 28 in the Tokyo District Court.

In addition to recognition of the foreign case, MtGox is asking the U.S. court to grant an injunction against ongoing litigation, including a CoinLab license agreement lawsuit and a class action suit related to the bitcoin theft and the company's inability to return the bitcoin to customers.

According to court documents, MtGox has $37.7 million in assets and $63.9 million in debt.

Roughly 12% of MtGox's equity is held by software developer Jed MacCaleb, and the rest is held by Tibanne Co., Ltd.

The company's legal counsel is Baker & McKenzie LLP.

MtGox is a Tokyo-based online bitcoin exchange operator. The Chapter 15 case number is 14-31229.

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