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Bitcoin exchange MtGox files for US bankruptcy protection

The move temporarily suspends US legal action against the company which the company claims will cost it significantly.

Image: AP Photo/Rick Bowmer

AFTER FILING FOR bankruptcy in Japan, troubled bitcoin exchange MtGox has filed for bankruptcy protection in the US.

The company filed for Chapter 15 bankruptcy protection yesterday, which is designed to protect insolvent companies that operate internationally.

It also temporarily suspends US legal action against the company as it works out how the theft of 850,000 bitcoin happened in the first place.

The company said that without US bankruptcy protection, it would spend “substantial funds” defending itself against US lawsuits. According to Forbes, the company is currently defending itself against at least two of them.

Under the Chapter 15 filing, Japan will still be the primary place for bankruptcy procedures, but it allows the US to work with it and other relevant parties in solving the case.

The company faced further trouble after a group of hackers allegedly gained access to the personal blog and Reddit profile of the company’s CEO Mark Karpeles.

In it they claimed that Mt Gox still has the bitcoin it said was stolen after finding a file which said the company had a balance of 951,116 bitcoin.

Read: 6 myths about Bitcoin that everyone thinks are true >

Read: This Dublin pub now accepts Bitcoin as payment for a pint >

About the author:

Quinton O'Reilly

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