MtGox Suitors Seek Creditors' Support to Save Defunct Bitcoin Exchange

A clutch of investors looking to buy defunct Japanese bitcoin exchange MtGox have floated a website -- Save Gox -- to gather support from creditors of the bankrupt exchange and prevent a liquidation of its assets.

Several creditors have backed the investors, who propose to take over MtGox's assets and revive it. The investors hope to convince a Japanese court to support their rehabilitation proposal, the Wall Street Journal reported on 17 April.

MtGox has about 127,000 creditors.

"We need your help to stop a liquidation, which would be good neither for MtGox creditors nor bitcoin's reputation with the general public and regulators," the investors wrote on the website.

"Our goal? To provide restitution to customers and restore faith in the digital currency," they added.

Provisional Administration

Japan placed MtGox into provisional administration on 16 April after the firm moved to liquidate its assets following its failure to restructure its business under the country's bankruptcy protection scheme.

Under provisional administration, the company's assets will be managed by an administrator until the order for the commencement of bankruptcy proceedings is made.

WSJ reported earlier that the exchange had asked a Tokyo court to allow it to be liquidated. The newspaper's sources cited a "difficulty of holding meetings with creditors spread around the world" and "the lack of realistic rehabilitation plans" as reasons behind the exchange's move.

The liquidation filing comes after the company's lawyers in the US told a court that MtGox's CEO Mark Karpeles would not be able to face trial in the country over the exchange's bankruptcy.

MtGox, which at one point hosted 80% of the world's bitcoin trades, collapsed after reporting that 850,000 bitcoins were stolen in what it claims was the result of a two-year long cyber attack. The company filed for bankruptcy protection in Japan on 28 February and subsequently in the US.

Later, MtGox said it found 200,000 of the lost coins in an "old format wallet" while rescanning them following the bankruptcy filing. Factoring in the newly found bitcoins, the total number missing is now estimated at 650,000.