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Bitcoin Exchange Kraken to Help in Mt. Gox Bankruptcy

Bitcoin Exchange Kraken to Help in Mt. Gox Bankruptcy

By Reuters | Updated: 26 November 2014 16:56 IST

U.S. Bitcoin exchange operator Payward Inc said on Wednesday it will work on retrieving some millions of dollars lost by Tokyo-based Mt. Gox, once the world's largest Bitcoin exchange before it collapsed in bankruptcy this year.

Kraken, Payward's Bitcoin exchange, will assist Mt. Gox's Tokyo-court appointed trustee Nobuaki Kobayashi with investigating where the missing Bitcoins are, along with eventually redistributing any found to creditors as part of a liquidation.

The partnership between Payward and Mt. Gox was approved by the Tokyo district court on Wednesday. Kraken will not be paid for the arrangement but could win new clients as former account holders at Mt. Gox register to receive future distributions from the liquidation.

"We hope to revive Bitcoin's reputation and create a healthy market for it, ultimately leading to profit for us," Ayako Miyaguchi, managing director of Kraken's Japanese operations, told reporters.

Once handling 80 percent of the world's Bitcoin trades, Mt. Gox filed for bankruptcy in February in Tokyo after it lost 750,000 of its users' Bitcoins and 100,000 of its own. Mark Karpeles, the 28 year-old French CEO of Mt. Gox, blamed hackers for the loss.

The lost funds represented the equivalent of $480 million (roughly Rs. 2,969 crores) at the time of the bankruptcy filing. Mt. Gox also said $28 million (roughly Rs. 173 crores) were "missing" from its Japanese bank accounts.

Karpeles later said he had recovered 200,000 of the lost Bitcoins.

The collapse of Mt. Gox was a setback for a five-year-old virtual currency that proponents see as a still-developing alternative to traditional money.

Kraken, a San Francisco-based Bitcoin exchange, announced in October that it was launching trading between Bitcoin and the yen, saying it was the only major exchange to offer a dedicated Bitcoin/yen order book.

© Thomson Reuters 2014

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