Mt. Gox files for liquidation!

A day before the US court hearing Mt. Gox filed for an emergency hearing at the Japan court yesterday. It was reported that the hearing was mainly to get more time for the investigation. However, reports are coming in now that Mt. Gox has filed for liquidation. This means that once the world’s largest exchange gives up the plan to rebuild and all its assets will be distributed to the creditors.

The million dollar question that remains unanswered is how Mark Karpeles lost the Bitcoins. The transaction malleability issue was first reported in 2011 and there is no way one could lose all the Bitcoins without noticing. The Exchange has also reported earlier, it has lost some customer fiat money as well. Although no explanation has been given to prove the facts. The failure of Mt. Gox should be a big setback to the virtual currencies as it has been one of the early adopters helping the Bitcoin drive along.

This should be a big blow to the Mt. Gox investors, although they might get some part of their funds on the Exchange. It is still unclear how the investors should proceed. The court is expected to assign a trustee to overlook the process.

Even though Mt. Gox has filed for the liquidation, the issue should not be swept under the carpet. Mark Karpeles should be taken to the US court for the hearing and an explanation should be given regarding the funds. If he fails, he has to be arrested. If strict actions are not taken again Karpeles or Mt. Gox, we might see more exchanges trying to scam the users.

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