Baker & McKenzie is advising Tokyo-based bitcoin exchange Mt. Gox Co. Ltd. on a bankruptcy filing.
The petition follows the company’s announcement on Friday that hackers had apparently stole 750,000 bitcoins, an Internet-based currency not backed by any bank or government, that had been deposited by users and an additional 100,000 owned by the company itself. The total value of the stolen bitcoins was estimated at $480 million, accounting for 7 percent of all bitcoins traded globally.
After announcing the filing in Tokyo District Court last Friday, the troubled company today posted a statement on its website saying that the court has accepted its filing for civil rehabilitation, or minji saisei, which grants the company protection from creditors while it seeks a buyer.
Nagashima Ohno & Tsunematsu partner Nobuaki Kobayashi was appointed as supervisor, or trustee, by the court.
Baker & McKenzie Tokyo partner Yamamoto Hideyuki and counsel Junko Suetomi are acting for Mt. Gox on the filing. Mt Gox is also being represented by Osaka-based lawyer Akio Shinomiya and Tokyo-based Kazumasa Kawai of Japanese firm Yodoyabashi & Yamagami.
Mt. Gox, which had been the world’s largest bitcoin exchange, said it detected a breach in its system on Feb. 7, when it shut down investor withdrawals. The action was apparently too late, and the company shut down all trading on Feb. 25.
In the United States, Mt. Gox is already facing a lawsuit brought by angry investors. Gregory Greene, who is being represented by Steven Woodrow, a partner at Denver-based firm Edelson, sued Mt. Gox in U.S. district court in Chicago last Thursday, claiming he lost $25,000 worth of the virtual currency.
Mt. Gox chief executive officer Mark Karpelès apologized to investors at a press conference held last Friday in Tokyo, conceding there was a weakness in their system. He said the company would conduct an investigation and try to bring those responsible for the thefts to justice.