6 ms·

Mt. Gox Files for Bankruptcy in U.S

31 points by antonius 13y ago

jug6ernaut 13y ago
Any specific reason they would file in Texas?
- deleted 13y ago
  [deleted]
- sliverstorm 13y ago
  From what I hear, Texas courts are generally the most friendly to businesses
- hcal 13y ago
  Texas is known as a responsive district so they won't have to wait for a court date. That could be important if they thought an investor was going to move to quickly to foreclose on assets.
  - techsupporter 13y ago
    Doesn't the automatic stay kick in immediately upon filing? My understanding was that the ultimate court date (or initial meeting with the trustee) wasn't as big of a concern.
- rayiner 13y ago
  So a Chapter 15 is an ancillary proceeding to facilitate the bankruptcy of a foreign corporation that is happening in another jurisdiction (in this case, Japan). Venue in a Chapter 15 is appropriate either where the company its principal U.S. assets, or where it is getting sued in the U.S. See: http://www.law.cornell.edu/uscode/text/28/1410 http://www.law.cornell.edu/uscode/text/28/1410. I believe the only lawsuit right now is in Chicago (NDIL), so presumably they filed in Dallas because they had some assets there (servers, etc)?
RKearney 13y ago
Article is behind a paywall. Mt. Gox, the struggling Japanese bitcoin exchange, has filed for bankruptcy protection in a U.S. court to stop customers from freezing any of the company's assets that are located on U.S. soil. Lawyers put MtGox Co. Ltd. into Chapter 15 protection in Texas on Sunday, stating that a potential class-action lawsuit in Illinois could get in the way of reorganization efforts that are taking place in the company's home country. Mt. Gox, an exchange for buyers and sellers of the digital currency known as bitcoin, halted customer withdrawals on Feb. 7, later stating that it lost almost 750,000 of its customers' bitcoins and around 100,000 of its own. "This theft or disappearance is currently the subject of an intense investigation which required Mt. Gox to devote most of its resources," Mt. Gox lawyers wrote in court papers. In the potential class-action lawsuit, lawyers are trying to round up U.S. residents who paid a fee to Mt. Gox to buy, sell or trade bitcoin, according to court papers filed in U.S. Bankruptcy Court in Dallas. As part of that lawsuit, lawyers are expected to ask Tuesday during a court hearing for the power to freeze any of Mt. Gox's U.S. assets, which include any servers or other computer equipment that stores customer information about bitcoins. It is unclear what assets—if any—Mt. Gox has in the U.S. Still, the U.S. bankruptcy halts existing lawsuits, at least temporarily. More specifically, Chapter 15 of the U.S. Bankruptcy Code is available to foreign companies that have sought protection of their home courts. Mt. Gox filed for bankruptcy protection in Japan last month. Participating in the U.S. lawsuits at this point "would wastefully divert resources away from" the Japanese bankruptcy, Mt. Gox lawyers wrote in court papers. The company's lawyers said that Mt. Gox's debts totaled 6.5 billion yen ($63.9 million) versus assets of 3.84 billion yen. Mt. Gox hired the Baker & McKenzie law firm to represent it in bankruptcy. The company's case, numbered 14-31229, has been assigned to Judge Stacey G. Jernigan. —Jacqueline Palank contributed to this article. Write to Katy Stech at katherine.stech@wsj.com
- grimtrigger 13y ago
  Flagged
- ScottWhigham 13y ago
source99 13y ago
Brings up an interesting point: Is it possible and how would you freeze bitcoins owned by a person(or a specific wallet).
- _ikke_ 13y ago
  You can't, and this isn't about freezing bitcoins. They try to prevent people from freezing their non-bitcoin assets.
- brazzy 13y ago
  Hm... would it be possible to have a blacklist of bitcoin addresses and get a majority of miners to ignore transactions that involve these addresses?
  - danielweber 13y ago
    You could have a blacklist. You couldn't, as a practical matter, get the miners to agree on a blacklist. A partial attempt would segment the bitcoin protocol and so the miners would just avoid it completely.
- Jtsummers 13y ago
  The only way, per the system's design, would be a network wide whitelist or blacklist of accounts. Either explicitly permitting (which wouldn't work) or explicitly blocking addresses from participating in transactions. And, if enough computers disregarded it, the transactions would still go into valid blocks. The blacklist/whitelist nodes would have to accept those blocks or you'd end up with a forked blockchain or serious accounting issues because some nodes would disregard certain transactions.
- icebraining 13y ago
  Raid their place, copy their wallet, move the bitcoins to yours.
- jccooper 13y ago
  A court could simply order them frozen, and expect the holder to comply. If the court deems that too dangerous, they would order them transferred to a third party guardian (usually the local sheriff or similar, but they might make a different arrangement for something unusual like bitcoin). Possibly "without notice", if "dissipation" seems likely if the holder knows it's coming. Pretty much the same as you'd do with cash or other physical assets. (Transfer is necessary; seizing the private key isn't secure against copies. The FBI is known to have moved the Silk Road money to their own wallet: http://blockchain.info/address/1F1tAaz5x1HUXrCNLbtMDqcw6o5GNn4xqX http://blockchain.info/address/1F1tAaz5x1HUXrCNLbtMDqcw6o5GN... )
mikikian 13y ago
Here's a docket to follow the filings in the court for those curious: https://www.inforuptcy.com/filings/txnbke_411806-3-14-bk-31229-mtgox-co-ltd-bankruptcy https://www.inforuptcy.com/filings/txnbke_411806-3-14-bk-312...

31 points by antonius 13y ago

jug6ernaut 13y ago

Any specific reason they would file in Texas?

deleted 13y ago
[deleted]
sliverstorm 13y ago
From what I hear, Texas courts are generally the most friendly to businesses
hcal 13y ago
Texas is known as a responsive district so they won't have to wait for a court date. That could be important if they thought an investor was going to move to quickly to foreclose on assets.
- techsupporter 13y ago
  Doesn't the automatic stay kick in immediately upon filing? My understanding was that the ultimate court date (or initial meeting with the trustee) wasn't as big of a concern.
rayiner 13y ago
So a Chapter 15 is an ancillary proceeding to facilitate the bankruptcy of a foreign corporation that is happening in another jurisdiction (in this case, Japan). Venue in a Chapter 15 is appropriate either where the company its principal U.S. assets, or where it is getting sued in the U.S. See: http://www.law.cornell.edu/uscode/text/28/1410 http://www.law.cornell.edu/uscode/text/28/1410. I believe the only lawsuit right now is in Chicago (NDIL), so presumably they filed in Dallas because they had some assets there (servers, etc)?

RKearney 13y ago

Article is behind a paywall. Mt. Gox, the struggling Japanese bitcoin exchange, has filed for bankruptcy protection in a U.S. court to stop customers from freezing any of the company's assets that are located on U.S. soil. Lawyers put MtGox Co. Ltd. into Chapter 15 protection in Texas on Sunday, stating that a potential class-action lawsuit in Illinois could get in the way of reorganization efforts that are taking place in the company's home country. Mt. Gox, an exchange for buyers and sellers of the digital currency known as bitcoin, halted customer withdrawals on Feb. 7, later stating that it lost almost 750,000 of its customers' bitcoins and around 100,000 of its own. "This theft or disappearance is currently the subject of an intense investigation which required Mt. Gox to devote most of its resources," Mt. Gox lawyers wrote in court papers. In the potential class-action lawsuit, lawyers are trying to round up U.S. residents who paid a fee to Mt. Gox to buy, sell or trade bitcoin, according to court papers filed in U.S. Bankruptcy Court in Dallas. As part of that lawsuit, lawyers are expected to ask Tuesday during a court hearing for the power to freeze any of Mt. Gox's U.S. assets, which include any servers or other computer equipment that stores customer information about bitcoins. It is unclear what assets—if any—Mt. Gox has in the U.S. Still, the U.S. bankruptcy halts existing lawsuits, at least temporarily. More specifically, Chapter 15 of the U.S. Bankruptcy Code is available to foreign companies that have sought protection of their home courts. Mt. Gox filed for bankruptcy protection in Japan last month. Participating in the U.S. lawsuits at this point "would wastefully divert resources away from" the Japanese bankruptcy, Mt. Gox lawyers wrote in court papers. The company's lawyers said that Mt. Gox's debts totaled 6.5 billion yen ($63.9 million) versus assets of 3.84 billion yen. Mt. Gox hired the Baker & McKenzie law firm to represent it in bankruptcy. The company's case, numbered 14-31229, has been assigned to Judge Stacey G. Jernigan. —Jacqueline Palank contributed to this article. Write to Katy Stech at katherine.stech@wsj.com

grimtrigger 13y ago
Flagged
ScottWhigham 13y ago

source99 13y ago

Brings up an interesting point: Is it possible and how would you freeze bitcoins owned by a person(or a specific wallet).

_ikke_ 13y ago
You can't, and this isn't about freezing bitcoins. They try to prevent people from freezing their non-bitcoin assets.
brazzy 13y ago
Hm... would it be possible to have a blacklist of bitcoin addresses and get a majority of miners to ignore transactions that involve these addresses?
- danielweber 13y ago
  You could have a blacklist. You couldn't, as a practical matter, get the miners to agree on a blacklist. A partial attempt would segment the bitcoin protocol and so the miners would just avoid it completely.
Jtsummers 13y ago
The only way, per the system's design, would be a network wide whitelist or blacklist of accounts. Either explicitly permitting (which wouldn't work) or explicitly blocking addresses from participating in transactions. And, if enough computers disregarded it, the transactions would still go into valid blocks. The blacklist/whitelist nodes would have to accept those blocks or you'd end up with a forked blockchain or serious accounting issues because some nodes would disregard certain transactions.
icebraining 13y ago
Raid their place, copy their wallet, move the bitcoins to yours.
jccooper 13y ago
A court could simply order them frozen, and expect the holder to comply. If the court deems that too dangerous, they would order them transferred to a third party guardian (usually the local sheriff or similar, but they might make a different arrangement for something unusual like bitcoin). Possibly "without notice", if "dissipation" seems likely if the holder knows it's coming. Pretty much the same as you'd do with cash or other physical assets. (Transfer is necessary; seizing the private key isn't secure against copies. The FBI is known to have moved the Silk Road money to their own wallet: http://blockchain.info/address/1F1tAaz5x1HUXrCNLbtMDqcw6o5GNn4xqX http://blockchain.info/address/1F1tAaz5x1HUXrCNLbtMDqcw6o5GN... )

mikikian 13y ago

Here's a docket to follow the filings in the court for those curious: https://www.inforuptcy.com/filings/txnbke_411806-3-14-bk-31229-mtgox-co-ltd-bankruptcy https://www.inforuptcy.com/filings/txnbke_411806-3-14-bk-312...