Mt. Gox, the struggling Japanese bitcoin exchange,
has filed for bankruptcy protection in a U.S. court
to stop customers from freezing any of the company's
assets that are located on U.S. soil.
Lawyers put MtGox Co. Ltd. into Chapter 15 protection
in Texas on Sunday, stating that a potential
class-action lawsuit in Illinois could get in the
way of reorganization efforts that are taking place
in the company's home country.
Mt. Gox, an exchange for buyers and sellers of the
digital currency known as bitcoin, halted customer
withdrawals on Feb. 7, later stating that it lost
almost 750,000 of its customers' bitcoins and around
100,000 of its own.
"This theft or disappearance is currently the subject
of an intense investigation which required Mt. Gox
to devote most of its resources," Mt. Gox lawyers wrote
in court papers.
In the potential class-action lawsuit, lawyers are
trying to round up U.S. residents who paid a fee to
Mt. Gox to buy, sell or trade bitcoin, according to
court papers filed in U.S. Bankruptcy Court in Dallas.
As part of that lawsuit, lawyers are expected to ask
Tuesday during a court hearing for the power to freeze
any of Mt. Gox's U.S. assets, which include any servers
or other computer equipment that stores customer
information about bitcoins.
It is unclear what assets—if any—Mt. Gox has in the U.S.
Still, the U.S. bankruptcy halts existing lawsuits, at
least temporarily.
More specifically, Chapter 15 of the U.S. Bankruptcy
Code is available to foreign companies that have sought
protection of their home courts.
Mt. Gox filed for bankruptcy protection in Japan last
month. Participating in the U.S. lawsuits at this
point "would wastefully divert resources away from"
the Japanese bankruptcy, Mt. Gox lawyers wrote in
court papers.
The company's lawyers said that Mt. Gox's debts
totaled 6.5 billion yen ($63.9 million) versus
assets of 3.84 billion yen.
Mt. Gox hired the Baker & McKenzie law firm to
represent it in bankruptcy. The company's case,
numbered 14-31229, has been assigned to Judge
Stacey G. Jernigan.
—Jacqueline Palank contributed to this article.
Write to Katy Stech at katherine.stech@wsj.com
"Information wants to be free" doesn't justify that you should ignore their copyright just because you can easily ignore their paywall with little consequence to yourself.
Ah, is this one of those things were copyrights don't matter since you aren't a musician, director, writer, etc? And software should be paid for? Or if you open source your work then there is no problem me incorporating that into my closed source project, since copyright doesn't matter?
Texas is known as a responsive district so they won't have to wait for a court date. That could be important if they thought an investor was going to move to quickly to foreclose on assets.
Doesn't the automatic stay kick in immediately upon filing? My understanding was that the ultimate court date (or initial meeting with the trustee) wasn't as big of a concern.
So a Chapter 15 is an ancillary proceeding to facilitate the bankruptcy of a foreign corporation that is happening in another jurisdiction (in this case, Japan). Venue in a Chapter 15 is appropriate either where the company its principal U.S. assets, or where it is getting sued in the U.S. See: http://www.law.cornell.edu/uscode/text/28/1410. I believe the only lawsuit right now is in Chicago (NDIL), so presumably they filed in Dallas because they had some assets there (servers, etc)?
You couldn't, as a practical matter, get the miners to agree on a blacklist. A partial attempt would segment the bitcoin protocol and so the miners would just avoid it completely.
The only way, per the system's design, would be a network wide whitelist or blacklist of accounts. Either explicitly permitting (which wouldn't work) or explicitly blocking addresses from participating in transactions. And, if enough computers disregarded it, the transactions would still go into valid blocks. The blacklist/whitelist nodes would have to accept those blocks or you'd end up with a forked blockchain or serious accounting issues because some nodes would disregard certain transactions.
A court could simply order them frozen, and expect the holder to comply. If the court deems that too dangerous, they would order them transferred to a third party guardian (usually the local sheriff or similar, but they might make a different arrangement for something unusual like bitcoin). Possibly "without notice", if "dissipation" seems likely if the holder knows it's coming.
Pretty much the same as you'd do with cash or other physical assets.
28 comments
[ 3.5 ms ] story [ 42.6 ms ] threadGPL use is only useful as long as copyright exist: should it not exist then GPL is not just not useful anymore but not needed at all!
I'd just disassemble what you did and release it as open source again :D
Is it possible and how would you freeze bitcoins owned by a person(or a specific wallet).
You couldn't, as a practical matter, get the miners to agree on a blacklist. A partial attempt would segment the bitcoin protocol and so the miners would just avoid it completely.
Pretty much the same as you'd do with cash or other physical assets.
(Transfer is necessary; seizing the private key isn't secure against copies. The FBI is known to have moved the Silk Road money to their own wallet: http://blockchain.info/address/1F1tAaz5x1HUXrCNLbtMDqcw6o5GN... )