Mt Gox Files For Bankruptcy Protection In Tokyo
Mt. Gox, once the largest Bitcoin exchange just filed for Bankruptcy Protection in Tokyo, Japan. According to reports Mt. Gox had liquid liabilities of 6.5 billion yen ($63.67 million), dwarfing its total assets of 3.84 billion yen. Point to be noted is Mt. Gox filed for Bankruptcy Protection not for Bankruptcy. It basically means that the company expects to recover.
Bankruptcy vs Bankruptcy Protection :
A company files for bankruptcy protection under Chapter 11 of The Bankruptcy Code if it believes it can recover financially, given time and some amount of restructuring and reorganisation - this could include a change of management, business model or the selling of a highly-value assets such as buildings (which could be leased back from the buyer) or vehicles.
When a company files for bankruptcy outright, it has accepted that it is no longer able to repay its creditors and any steps for recovery are impossible.
Mt. Gox had stopped all activities two and a half weeks ago, arguing that a software error. Last Tuesday, the Tokyo-based platform went completely offline and deleted all messages in the official twitter-account. As a reason, the operator stated the protection of users. But some leaked documents indicates a theft of 740,000 Bitcoins, which values approximately $400 million at the time of writing.