US Judge Orders MtGox CEO Mark Karpeles to Dallas for Questioning

Bankrupt bitcoin exchange MtGox's CEO and majority owner Mark Karpeles has been ordered to appear in the US to answer questions regarding his firm's bankruptcy case.

US Bankruptcy Judge Stacey Jernigan ordered Karpeles to appear on 17 April in Dallas, at the offices of Baker & McKenzie, the law firm representing MtGox, ahead of a bankruptcy hearing scheduled for 20 May.

Judge Jernigan said: "If he avails himself of this court, my God, he is going to get himself over here."

Under Chapter 15 bankruptcy, protection from creditors is not automatic. MtGox must prove at a 20 May hearing that it should be afforded such protection.

MtGox customers want Karpeles to explain why the exchange shut down in February and what happened to their 750,000 bitcoins, which the company claims were stolen in a sustained hack of its security protocols over a two year period.

Customers have alleged that insiders including Karpeles may have stolen the money, and employees told Reuters they were worried as early as 2012 that customers' money was being diverted to cover operating costs.

Questions

A study published last week claimed there was no way a cyber attack could have been the reason for the loss of so many bitcoins, suggesting the maximum number of bitcoins that could have been stolen by this method was as low as 386 coins.

Karpeles controlled the company's financial records and may be the only person who knows where the company's assets and money could be, Steven Woodrow, an attorney for US customers, told the Dallas hearing.

Karpeles' testimony could throw light on what happened to the money and bitcoins belonging to MtGox clients, most of who are from the US.

In March, Karpeles asked a Dallas court to grant MtGox Chapter 15 bankruptcy protection, partly to prevent a class action that had been filed by US customers in Chicago federal court.

MtGox filed for bankruptcy protection in Japan on 28 February and subsequently in the US, after the firm lost $400m of customers' digital currency.