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Mt Gox Bitcoin Exchange Goes under Administration, Payments Frozen

Fans of virtual currencies suffered a heavy blow today, as Tokyo-based Mt. Gox, the leading Bitcoin exchange, officially announced that it had went under provisional administration. The announcement, issued on the corporate website, featured a grave piece of news for all those engaged in Bitcoin trading at the now-defunct exchange – due to legal rulings, the payments to all traders are also frozen. That's it – at this point you cannot get your money back. But first things first, let's take a look at what happened.


Some of you may recall that the exchange discovered a frightening loss of 750,000 – 850,000 bitcoins in February, which it blamed on a hacker attack. The problems led to the filing for bankruptcy by the US subsidiary of the group, while the Tokyo-based firm turned to court and asked for special rehabilitation procedures. The court, however, decided that Mt Gox is not capable of going through the process of civil rehabilitation and instead issued an order for provisional administration. 


Under the order, Attorney-at-law Nobuaki Kobayashi will act as a provisional administrator – he will handle the company’s assets until bankruptcy proceedings start. And traders on the exchange along with the creditors of the company hope that these proceedings begin as soon as possible, because of the blunt fact that until then they cannot get any money back.  


To make the situation clear here is a quote from the document issued by Nobuaki Kobayashi:


Question: Please return the bitcoins and cash that I deposited with the Company.

Answer: Since the Court issued an order under which the Company is prohibited from making certain payments, establishing security over its assets, and disposing of its assets, etc., refunding the bitcoins or cash is legally prohibited.


That's it, fellow traders, the sci-fi story of the exchange which launched in July 2010, today comes to a bitter end. But cryptocurrencies are still alive – you can trade them on other exchanges or over-the-counter with numerous Forex brokers. Amid the brokers that obviously show passion for Bitcoin and its alternatives is FXOpen, but there are numerous other options like eToro, for instance. 


TAGS: mt gox  mt gox exchange  forex market  bitcoin exchange  mt gox tokyo  administration  liquidation  bitcoin  bitcoin trading  provisional administration  payments  exchange trading  corporate insolvency  japan  japanese forex market 
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