Investors try last-minute Mt. Gox revival as liquidation looms

A consortium that offered 1 bitcoin to buy Mt. Gox launches its own website

By Tim Hornyak, IDG News Service |  On-demand Software

The clock may be running out on Mt. Gox, but a consortium of investors still wants to relaunch the failed Bitcoin exchange.

A website called SaveGox.com has emerged calling for a halt of the liquidation of Japan-based Mt. Gox, which the Tokyo District Court is expected to authorize.

"Liquidation is a last resort when all other avenues fail, including rehabilitation. No attempt has yet been made to save Mt. Gox," the website says.

The consortium of U.S. investors calls upon Mt. Gox creditors to help stop a liquidation of the exchange, and support plans to audit its books and distribute bitcoin to creditors to reduce their losses.

Mt. Gox collapsed in February with liabilities of ¥6.5 billion ($63.6 million), saying nearly half a billion dollars worth of bitcoin was unaccounted for and that hackers had exploited a software problem.

SaveGox.com says Mt. Gox was hacked and that until a "suitable internationally recognized auditor" investigates what happened, the true scale of the liabilities will remain unclear.

The site cites as its backers Bitcoin investor Brock Pierce, entrepreneur Jonathan Yantis, venture capitalists William Quigley and Matthew Roszak, and John Betts, described as a Wall Street veteran. Earlier this months, reports said the consortium was offering 1 bitcoin (roughly US$490 at current prices) to buy Mt. Gox.

"You have to understand, of course, that Mt. Gox is much more than just the assets that it has," Quigley said in a TV interview with CNBC early this week. "The company still has a very important role, we believe, in the continuation of Bitcoin."

The site says Mt. Gox's 127,000 customers worldwide would be best served by its rehabilitation, but it does not provide specific details about how to rebuild Mt. Gox. The consortium did not immediately respond to an email requesting further information.

Rejecting Mt. Gox's bid for rehabilitation as it had no viable plan, the Tokyo District Court on April 16 appointed a provisional administrator to take over Mt. Gox's affairs as a prelude to full bankruptcy proceedings.

If the court moves ahead with liquidation, Mt. Gox's assets would be evaluated, sold off and any cash would be distributed to creditors based on their claims. The process would take longer than regular bankruptcies in Japan due to the complexity of the case.

Under a rehabilitation scenario, however, the tens of thousands of users who lost bitcoins in the collapse could potentially receive a share of future profits.

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