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Mt. Gox files US bankruptcy, opponents call it a ruse

Published on Mar 11, 2014 5:48 AM
 
Mr Mark Karpeles, chief executive of Mt. Gox, at a news conference at the Tokyo District Court in Tokyo on Feb 28, 2014. Mt. Gox, once the world's largest bitcoin exchange, received United States bankruptcy protection on March 10. -- FILE PHOTO: REUTERS

(REUTERS) - Mt. Gox, once the world's largest bitcoin exchange, received United States (US) bankruptcy protection on Monday to temporarily halt US legal action against the Japanese company by traders who allege the operation was a fraud.

Judge Harlin Hale in Dallas granted temporary bankruptcy protection to Mt. Gox, which had filed for bankruptcy protection in Japan in February. Attorneys for Mt. Gox said without bankruptcy protection the company would be irreparably harmed by a proposed class action in Chicago federal court and a breach of contract case in Seattle federal court.

Mt. Gox filed for bankruptcy in Japan last month after it said it may have lost 750,000 of its customers' bitcoins as part of an attack by hackers.

The plaintiff leading the Chicago lawsuit was scheduled on Tuesday to ask a federal judge to freeze Mt. Gox's US-based servers and other computer equipment and to set up a trust over Mt. Gox's assets. Mt. Gox's founder, Mr Mark Karpeles, was scheduled to be deposed later this month in the Seattle lawsuit.

 
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