Mt. Gox customers settle lawsuit over bankrupt exchange

The plaintiffs will own a 16.5 percent stake of the new Mt. Gox and split 200,000 Bitcoins recovered by the failed exchange.

bitcoin-digital.jpg
Bitcoin

Mt. Gox, the embattled Tokyo-based Bitcoin exchange that had its collection of the crypto-currency stolen, pushing it to bankruptcy, might not be dead just yet.

Late Monday, plaintiffs in a class-action lawsuit launched earlier this year against Mt. Gox said they have decided to nix their legal dispute and instead attempt to own a portion of the failed exchange.

The deal was struck with Sunlot Holdings, a company backed by entrepreneur Brock Pierce and venture capitalist William Quigley, that wants to acquire what remains of Mt. Gox. In return, the customers involved in the class-action lawsuit will get 16.5 percent ownership of the exchange and share in 200,000 Bitcoins Mt. Gox discovered after its massive data breach.

Mt. Gox was at one time the world's largest Bitcoin exchange, allowing people around the globe to convert their cash into the crypto-currency. Earlier this year, however, Mt. Gox announced that 850,000 Bitcoins, worth over $400 million, had been taken in a hacking attack, leaving the company insolvent and its executives seeking bankruptcy protection.

Though all signs pointed to Mt. Gox's death, Sunlot came along recently with plans to acquire the exchange for a single Bitcoin. That sum, which amounts to less than $500, will give the company 83.5 percent ownership in Mt. Gox following the transaction and deal with the class plaintiffs.

Sunlot has launched a website, called Save Gox, that describes its intentions for the failed exchange. The company says it wants to "rehabilitate" Mt. Gox and not liquidate the company. Sunlot argues that liquidation would not allow Mt. Gox's Bitcoin customers to recoup their investments and could hurt the broader Bitcoin community.

"Our goal? To provide restitution to customers and restore faith in the digital currency," Sunlot writes. "If the Bitcoin community can prove to be self-healing without government bailouts, the entire ecosystem will benefit, including our portfolio of bitcoin investments."

In order for the class-action lawsuit to be dropped, courts in both the US and Canada must approve the deal.

(Via Reuters)


About the author

Don Reisinger is a technology columnist who has covered everything from HDTVs to computers to Flowbee Haircut Systems. Besides his work with CNET, Don's work has been featured in a variety of other publications including PC World and a host of Ziff-Davis publications.

 

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