Bit Coin Exchange Files Bankruptcy
Global news sources confirmed last week that Mt.Gox, a leading BitCoin exchange, and once the world’s largest BitCoin exchange filed for bankruptcy protection in Japan after losing approximately half a billion dollars to hacking. The exchange is reported to have lost 750,000 of its users’ BitCoins as well as 100,000 of their own totaling around $480 million at the current BitCoin price. This computer heist represents nearly 7% of the total current global BitCoins in existence. And the Mt.Gox users who have had their money disappear are not happy.
Amidst a number of lawsuits against them and a subpoena from US regulators Mt.Gox filed for bankruptcy protection in Japan instead of the United States only days after their website went down. It appears there were a number of security flaws and software bugs that were exploited by hackers. A bug in the system allowed hackers to transfer incomplete BitCoin transactions to their own anonymous accounts. Mt.Gox was unable to patch even basic security flaws that could have prevented this which will leave them open to many lawsuits, and on the hook to a lot of people worldwide.
But with the bankruptcy declaration in Japan Mt.Gox is likely to have some significant protections against its angry shareholders even though they could have some significant legal hurdles remaining in the United States. The crypto-currency itself remains strong, and BitCoin is expected to continue growing despite it’s significant drop in value from its $1,000 peak in November of 2013. The future for Mt.Gox remains unclear however, but with the bankruptcy filing in Japan they will likely be off the hook for most of the money stolen from their investors. This should open the door for any number of other BitCoin exchange services from around the world to take over as number one, leaving Mt.Gox to either claw its way back or fizzle out altogether, but they should be given a fresh start on their debt through bankruptcy.
The bankruptcy process is going to help Mt.Gox with the debt it is left holding after a seriously unfortunate situation that was out of its control. If you have been affected by the BitCoin fiasco, or are underwater on your finances in general then bankruptcy might be the best option for you as well. It is the most powerful debt relief tool available in New York City and the only debt relief solution backed by the full power of the law. If you live in New York City and have questions about bankruptcy or have creditors harassing you day and night please contact the Law Offices of William Waldner online or at 212.244.2882 to arrange a free bankruptcy consultation today. We only practice bankruptcy law and maintain a 99% Chapter 7 Bankruptcy discharge record in New York City as of 8/31/16.
This article is intended for educational purposes only. By reading no attorney-client relationship has been created.