Mt. Gox creditors have until November to file claims

Mt. Gox creditors have until November to file claims

Summary: Those left out of pocket by the bankruptcy of Japanese bitcoin exchange, Mt. Gox, will have until 28 November to submit proof of their claims.

SHARE:

The appointed bankruptcy trustee of failed Japanese bitcoin exchange, Mt. Gox, has told creditors they have until 28 November to file their claims for compensation.

According to the company's court-appointed bankruptcy trustee, attorney Nobuaki Kobayashi, the first creditors' meeting will be held in Tokyo on 23 July and the investigation of claims will kick off on 25 February next year.

The bankruptcy proceedings began on 24 April, after the exchange filed for a "commencement of a procedure of civil rehabilitation", in a bid to continue operations despite the insolvent position in which it found itself following the theft of around 750,000 bitcoins in its possession.

Mt. Gox shut down its exchange in February, when the enormity of the bitcoin theft became apparent, with the company's then representative director, Mark Karpeles, highlighting a security vulnerability in its system as being the potential mechanism allowing the theft.

"At the start of February 2014, illegal access through the abuse of a bug in the bitcoin system resulted in an increase in incomplete bitcoin transfer transactions and we discovered that there was a possibility that bitcoins had been illicitly moved through the abuse of this bug," said Karpeles, in a statement (PDF), published in late February.

"As a result of our internal investigations, we found that a large amount of bitcoins had disappeared. Although the complete extent is not yet known, we found that approximately 750,000 bitcoins deposited by users and approximately 100,000 bitcoins belonging to us had disappeared."

"We believe that there is a high probability that these bitcoins were stolen as a result of an abuse of this bug and we have asked an expert to look at the possibility of a criminal complaint and undertake proper procedures."

Once the company found the bitcoins had disappeared it decided it could no longer continue operating and closed the site on 25 February.

On 20 March, Karpeles announced that Mt. Gox had uncovered around 202,000 bitcoins still in its possession, 199,999 of which had been held in "certain old-format wallets" and had escaped the theft that saw almost all of its bitcoins taken.

In mid-April, Mt. Gox was told that its application for a civil rehabilitation procedure had been knocked back and it was required to go into administration.

"It cannot always be assured that the balance that you can confirm will be approved as the bankruptcy claim in its full amount, if the bankruptcy proceedings commence," said the Mt. Gox’s provisional administrator in a statement (PDF) on 16 April. "Refunding the bitcoins or cash is legally prohibited."

Earlier this week, it was reported that a number of bitcoin exchanges, including Mt. Gox, were under investigation over potential ties to the shuttered online drug marketplace Silk Road.

Topics: Emerging Tech, E-Commerce, Tech Industry

About

Leon covers enterprise technology and start-ups from ZDNet's Sydney newsroom.

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Talkback

0 comments
Log in or register to start the discussion