MtGox Bitcoin exchange wins temporary bankruptcy protection in US

MtGox Bitcoin exchange has won a temporary bankruptcy protection in the US.

A judge in Dallas, Texas, agreed to protect MtGox’s assets and temporarily halt two US lawsuits while bankruptcy proceedings occur in Japan.

MtGox filed for bankruptcy in Japan in February after losing about $473 million worth of customers’ Bitcoins to what it says was a hacking attack.

The company is scheduled to return to court on April 1 to extend the protections.

MtGox filed for Chapter 15 protection in the US late on Sunday.

The filing asks the US bankruptcy court to recognize MtGox’s bankruptcy in Japan and protect its US assets.

And it gives MtGox a temporary reprieve against two US lawsuits: one a class-action suit in Chicago filed by an Illinois resident, and another a $75 million breach-of-contract case filed in Seattle by Coinlab Inc.

At the time of the MtGox theft, about 750,000 customer Bitcoins were stolen as well as close to 100,000 of MtGox’s own bitcoins.

That amounts to about 7% of all the Bitcoins in existence.

Steven Woodrow, the lawyer leading the Chicago class-action suit, told Judge Harlin Hale that the case was a “massive fraud”.

MtGox’s attorney, David Parham, denied there was any fraud and said the company and its founder, Mark Karpeles, were complying with the terms of the Japanese bankruptcy proceeding.