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Mt. Gox, the Once Mighty Bitcoin Exchange, Is Finished

NEW YORK ( TheStreet) -- Mt. Gox, the Japanese bitcoin exchange, is now expected to liquidate after a court in Tokyo dismissed a plan by the exchange to resurrect its business, according to the Wall Street Journal.

Meanwhile, the exchange's CEO, Mark Karpeles, a Frenchman, is likely to be investigated for his part in the collapse of the exchange, the Journal said.

Mt. Gox, once the world's biggest bitcoin exchange, filed for bankruptcy protection from creditors in Japan in late February, saying it had lost around 850,000 bitcoins, or $454 million based on current exchange rates. Mt. Gox said hackers had attacked its computer system over the last few years, slowly depleting the exchange of its bitcoin holdings. The company later said it had found 200,000 of those missing bitcoins.

The Tokyo court has put an administrator in charge of the company's assets until bankruptcy proceedings begin and a bankruptcy trustee is named, the Journal said.

In the U.S., Mt. Gox lawyers told a federal judge that Karpeles likely won't travel to the U.S. to answer questions about the bitcoin exchange's bankruptcy case there. He has been ordered through subpoena to answer questions from lawyers who represent customers with frozen bitcoin accounts.

Karpeles' lawyers claimed that until their client is caught up to speed on the subpoena, he won't be making any travel plans.

A class-action lawsuit could be coming to recoup some of the lost funds of bitcoin owners as court papers show that lawyers for Mt. Gox customers have been trying to round up U.S. residents who paid a fee to use the exchange in order to take part in such a lawsuit.

The damage done by Mt. Gox to the virtual currency could be irreparable. Then again, no one ever said trading bitcoins was for the faint of heart.

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This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

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