Joel R. Glucksman
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201-896-7095 jglucksman@sh-law.comFirm Insights
Mt. Gox founder won't appear for U.S. bankruptcy hearing
Author: Joel R. Glucksman
Date: April 25, 2014
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Mark Karpeles, the founder of former Bitcoin exchange Mt. Gox, has announced that he will not be coming to the U.S. to answer questions about his company’s U.S. bankruptcy filing, according to Reuters. In a court filing, Mt. Gox lawyers cited a subpoena from the U.S. Department of Treasury’s Financial Crimes Enforcement Network, or FinCEN, as the reason that Karpeles wouldn’t appear in court.
“Mr. Karpeles is now in the process of obtaining counsel to represent him with respect to the FinCEN Subpoena. Until such time as counsel is retained and has an opportunity to ‘get up to speed’ and advise Mr. Karpeles, he is not willing to travel to the U.S.,” the filing said.
Mt. Gox lawyers also expressed that there was no guarantee that Karpeles would attend the May 5 deposition either, according to CNET.
Mt. Gox was the largest exchange of Bitcoin only a few months ago, but encountered trouble when it halted customer withdrawals on February 7, the news source explained. At the time, the exchange claimed that it was protecting customers from a flaw in the Bitcoin algorithm, but later claimed to have lost almost 750,000 customer Bitcoins and 100,000 of its own. At this point, the company filed insolvency proceedings in Japan and also filed for protection under Chapter 15 of the bankruptcy law in the U.S.
Karpeles has not been charged with a crime, CNET explains, but maintains that the Bitcoins were stolen via the same flaw in the Bitcoin algorithm. A number of Bitcoin activists, some of whom hacked Karpeles’s Reddit account and personal blog, allege that Karpeles is guilty of fraud.
This allegation was encouraged by reports from within the company that employees raised concerns with Karpeles over a year ago regarding an apparent discrepancy between company spending and income.
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