US Court Decision May Prompt More Mt. Gox Revival Bids

A US bankruptcy court has rejected CoinLab's bid to stop Sunlot Holdings from buying Mt. Gox.

AccessTimeIconMay 27, 2014 at 10:40 p.m. UTC
Updated Aug 18, 2021 at 2:58 p.m. UTC

Presented By Icon

Election 2024 coverage presented by

Stand with crypto

A US bankruptcy court has rejected a filing from Seattle-based digital currency service CoinLab Inc. in the latest development in the case of failed Japan-based bitcoin exchange Mt. Gox.

CoinLab sought to stop investor group Sunlot Holdings from purchasing Mt. Gox in documents filed during a 27th May hearing in US Bankruptcy Court in Dallas, Texas.

  • Bitcoin Mining in the U.S. Will Become 'a Lot More Decentralized': Core Scientific CEO
    13:18
    Bitcoin Mining in the U.S. Will Become 'a Lot More Decentralized': Core Scientific CEO
  • Binance to Discontinue Its Nigerian Naira Services After Government Scrutiny
    05:10
    Binance to Discontinue Its Nigerian Naira Services After Government Scrutiny
  • The first video of the year 2024
    04:07
    The first video of the year 2024
  • The last regression video of the year 3.67.0
    40:07
    The last regression video of the year 3.67.0
  • According to The Wall Street Journal, CoinLab’s filing was complicated when Mt. Gox’s lawyers stated that the deal involving Sunlot had not been given any special status by the courts, and that as such, other offers regarding the ownership and management of the exchange may be considered.

    Notably, the decision by Judge Stacey Jernigan could open the door to more purchase bids for Mt. Gox, including one from CoinLab itself.

    Bid to stop Sunlot fails

    CoinLab's filing seemingly aimed to stop or at least delay an effort by SunLot Holdings, a group of investors that includes venture capitalists John Betts and William Quigley and the Bitcoin Foundation's Industry Director-elect Brock Pierce, from purchasing Mt. Gox and its related liabilities.

    In its filing, CoinLab said that Sunlot’s bid to purchase Mt. Gox was not qualified to handle the investigation required to seek the location of the failed exchange’s missing bitcoins, explaining:

    "Sunlot has made no showing of its qualifications to manage and conduct such an investigation, let alone answered pressing questions about potential conflicts of interest it has suffered or may suffer.”

    Additionally, the company objected to the investor group’s plan to retain a portion of any funds recovered from Mt. Gox and its related entities during any forthcoming discovery.

    New offers possible

    Perhaps most notably, the courts indicated, for the first time at least explicitly, that other offers for the exchange can be considered, a statement that may lead to more investor interest in Mt. Gox.

    For example, a team involved with Chinese exchange OKCoin has expressed interest in buying the defunct exchange. However, it remains unclear if the group is still actively developing an offer.

    Additionally, CoinLab may ultimately submit a formal offer to purchase Mt. Gox.

    In court documents, the company suggested, but stopped short of saying outright, that it would seek to buy Mt. Gox, remarking:

    "CoinLab offers a market efficiency to creditors because it can address disposition of its intellectual property rights in the exchange as well as market expertise. However, no process currently exists for competing overbids."

    Previous statements from Nobuaki Kobayashi, the Japanese bankruptcy official overseeing the case indicated earlier in the day that the Japanese courts – which will have final say on approving any measures – are not presently considering any investor proposals.

    Judge giving verdict image via Shutterstock

    Disclosure

    Please note that our privacy policy, terms of use, cookies, and do not sell my personal information have been updated.

    CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. CoinDesk has adopted a set of principles aimed at ensuring the integrity, editorial independence and freedom from bias of its publications. CoinDesk is part of the Bullish group, which owns and invests in digital asset businesses and digital assets. CoinDesk employees, including journalists, may receive Bullish group equity-based compensation. Bullish was incubated by technology investor Block.one.


    Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.