Mt. Gox founder won't appear in U.S. for questions about bankruptcy case

Mon Apr 14, 2014 10:11pm EDT

Mark Karpeles, chief executive of Mt. Gox, attends a news conference at the Tokyo District Court in Tokyo February 28, 2014. REUTERS/Yuya Shino

Mark Karpeles, chief executive of Mt. Gox, attends a news conference at the Tokyo District Court in Tokyo February 28, 2014.

Credit: Reuters/Yuya Shino

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(Reuters) - Mark Karpeles, the founder of Mt. Gox, said he would not come to the United States to answer questions about the Japanese bitcoin exchange's U.S. bankruptcy case, Mt. Gox lawyers told a federal judge on Monday.

In the court filing, Mt. Gox lawyers cited a subpoena from the U.S. Department of Treasury's Financial Crimes Enforcement Network, which has closely monitored virtual currencies like bitcoin.

"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.

The subpoena requires Karpeles to appear and provide testimony in Washington, D.C., on Friday.

The court papers also said a Japanese court had been informed of the issue and that a hearing was scheduled on Tuesday in Japan.

Bitcoin is a digital currency that, unlike conventional money, is bought and sold on a peer-to-peer network independent of central control. Its value has soared in the last year, and the total worth of bit coins minted is now about $7 billion.

Mt. Gox, once the world's biggest bitcoin exchange, filed for bankruptcy protection in Japan last month, saying it may have lost nearly half a billion dollars worth of the virtual coins due to hacking into its computer system.

According to Monday's court filings, the subpoena did not specify topics for discussion.

In the court filings, Karpel├Ęs' lawyers asked the court to delay the bankruptcy deposition to May 5, 2014 but said that Mt. Gox could not guarantee that Karpeles would attend that either.

The case was in Re: Mt Gox Co Ltd in the U.S. bankruptcy court for the northern district of Texas, Dallas division, No. 14-31229-sgj15.

(Reporting by Devika Krishna Kumar in Bangalore; Editing by Eric Walsh)

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Comments (2)
blath wrote:
It’s pretty well accepted among the Bitcoin analysts that Karpeles made a huge blunder back in 2012 when he sold Bitcoins belonging to customer accounts at $10 per Bitcoin to pay for operating expenses planning to pay them back when the price went back down. When the Bitcoin rallied to $800 he was caught in a classic short squeeze from which there was no recovery. So he invented a story that the Bitcoins had been stolen because of the malleability bug. He will eventually be convicted of fraud and spen a large part of his young years in prison away fro his family.

Apr 14, 2014 12:24am EDT  --  Report as abuse
okashira wrote:
Fraud is nothing new to Karpeles

Apr 15, 2014 6:09pm EDT  --  Report as abuse
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