Bitcoin exchange MtGox in administration, bankruptcy eyed

A Japanese court Wednesday placed failed Bitcoin exchange MtGox in administration, with an order for bankruptcy expected to be issued soon, its administrator and chief executive said. The move marks the acceptance that there is no viable way to rescue the company, and heralds the apparent end of an exchange that at one time accounted for around 80 percent of global transactions in the virtual currency.
"The Tokyo District Court decided today to dismiss the application for commencement of a civil rehabilitation and at the same time, an order for Provisional Administration was issued," a statement from CEO Mark Karpeles said. "Attorney-at-law Nobuaki Kobayashi (Supervisor and Examiner under the Civil Rehabilitation Procedure) was appointed Provisional Administrator." The move means Karpeles will cede control of the company to Kobayashi.
"I, as the provisional administrator, will administer the assets of the Company under the supervision of the Tokyo District Court," said a statement in Kobayashi's name posted on the MtGox website. "I will strive to fairly and equitably administer the company's assets, both domestically and internationally, by attempting to utilise certain foreign procedures, including a Chapter 15 filing in the United States of America. "The future outlook is that, although it is subject to the decision by the Tokyo District Court, it is expected that the commencement of bankruptcy proceedings will be ordered." Kobayashi said the fate of the business of the Bitcoin exchange was not clear.
"The treatment of the exchange business is expected to be decided by taking into consideration the various matters including whether there is any proper buyer candidate who can assume the business and how to transfer the business to such buyer." Private credit research firm Teikoku Databank put MtGox's liabilities at about 6.5 billion yen ($64 million). Kobayashi warned there was an "extremely large" number of potential creditors - including people who had Bitcoins stashed with the exchange - and it may be difficult for depositors to get all their money back.
"Please note that, even if you confirm your balance on the Company's website, it does not always mean that the Company acknowledges you as a creditor or a user," his statement said. "It cannot always be assured that the balance that you can confirm will be approved as the bankruptcy claim in its full amount, if the bankruptcy proceedings commence." However, he offered assurances that local creditors would not be given precedence over those living abroad.
"The provisional administrator has to treat both the domestic and international creditors equally in the proceedings in Japan, and thus, it is our view that we need to maintain the Chapter 15 proceedings in the United States along with the proceedings in Japan. "It is expected that the same can be said if the bankruptcy proceedings commence."