Thursday, April 10, 2014

Investors to Mt. Gox: A bitcoin for your troubles

According to The Wall Street Journal, a group of investors has offered to purchase bankrupt bitcoin exchange Mt. Gox for a token payment of one bitcoin, or about $400.

The group justified the near-zero price citing an “information vacuum” over Mt. Gox’s missing bitcoins that made it hard to place a value on the lost digital currency, as reported by Reuters.  Mt. Gox was formerly the largest bitcoin exchange but fell from its lofty position in February after filing for bankruptcy.  Mt. Gox contention is that hackers stole some 750,000 bitcoins belonging to its customers along with 100,000 of its own bitcoins after exploiting a security flaw in its software.

The investor group trying to purchase the crestfallen Mt. Gox includes Brock Pierce, a former child actor-turned entrepreneur, and venture capitalists William Quigley and Matthew Roszak.  According to Reuters, “The group hopes to revive the exchange and set aside 50 percent of its transaction fees to pay back burned customers and other creditors over time.” 

The acquisition must be approved by a Japanese bankruptcy court before being finalized.  The near-zero valuation of the proposed deal, however, is expected to provide a significant barrio to the deal’s consummation.  

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