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The bankrupt Mt. Gox Bitcoin exchange took another step toward oblivion today (Wednesday) when the Tokyo District Court dismissed its application for civil rehabilitation and steered it on a path to liquidation.
The ruling kills any possibility of Mt. Gox Chief Executive Officer Mark Karpeles rebuilding the Bitcoin exchange under bankruptcy protection.
"There are no prospects for the restart of the business," Karpeles said in a statement on the otherwise dormant Mt. Gox website.
The court, having determined that "it would be difficult for the company to carry out the civil rehabilitation proceedings," appointed a provisional administrator, lawyer Nobuaki Kobayashi, to take control of what remains of the defunct Bitcoin exchange's assets.
"I will strive to fairly and equitably administer the company's assets, both domestically and internationally, by attempting to utilize certain foreign procedures, including a Chapter 15 filing in the United States of America," Kobayashi said in a statement.
One consolation for the Bitcoin community was that this latest Mt. Gox bankruptcy news had no effect on the Bitcoin price, which yesterday (Tuesday) rebounded past the $500 level.
Days after going dark in February, Mt. Gox announced it had lost 750,000 customer bitcoins as well as 100,000 of its own. At the time, the loss was equal to nearly $500 million. Three weeks later, the Bitcoin exchange said it had "found" 200,000 bitcoins in an offline Bitcoin wallet.
That last development had given hope to the 127,000 customers who had bitcoins as well as fiat currency stuck in accounts at Mt. Gox when it went dark. While most of the Bitcoin exchange's customers are resigned to not being made whole, getting even a small portion back would be better than nothing.
But a Mt. Gox liquidation could make any restitution to customers even smaller.
Kobayashi warned customers of the Bitcoin exchange that "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."
Still, Kobayashi's statement did suggest one slim possibility for Mt. Gox customers getting some of their money back…
Anybody Want to Buy a Bankrupt Bitcoin Exchange?
If a buyer could be found for Mt. Gox, and the Bitcoin exchange re-opened, profits from the operating business could be used to pay back the customers who lost money.
Kobayashi indicated such a course of action would be considered.
"The treatment of the exchange business is expected to be decided by taking into consideration the various matters including whether there is any proper buyer candidate who can assume the business and how to transfer the business to such buyer," he said.
But who would buy a disgraced, bankrupt Bitcoin exchange?
Strangely enough, someone already has…
About the Author
David Zeiler, Associate Editor for Money Morning at Money Map Press, has been a journalist for more than 35 years, including 18 spent at The Baltimore Sun. He has worked as a writer, editor, and page designer at different times in his career. He's interviewed a number of well-known personalities - ranging from punk rock icon Joey Ramone to Apple Inc. co-founder Steve Wozniak.
Over the course of his journalistic career, Dave has covered many diverse subjects. Since arriving at Money Morning in 2011, he has focused primarily on technology. He's an expert on both Apple and cryptocurrencies. He started writing about Apple for The Sun in the mid-1990s, and had an Apple blog on The Sun's web site from 2007-2009. Dave's been writing about Bitcoin since 2011 - long before most people had even heard of it. He even mined it for a short time.
Dave has a BA in English and Mass Communications from Loyola University Maryland.