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Mt. Gox founder won't attend US bankruptcy hearing

Mt. Gox attorneys say in a court filing that Mark Karpeles is unwilling to travel to the US to address questions regarding the exchange's closure.

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Mark Karpeles (second from right), during a February press conference in Tokyo announcing the exchange's bankruptcy filing. JIJI PRESS/AFP/Getty Images

Mt. Gox founder Mark Karpeles is unwilling to travel to the US to answer questions later this week about the troubled Bitcoin exchange's US bankruptcy case, Mt. Gox lawyers told a federal judge on Monday.

Despite an order earlier this month by US Bankruptcy Judge Stacey Jernigan that requires Karpeles to appear Thursday in a US Bankruptcy Court in Dallas to address questions about the Tokyo-based exchange's closure, Karpeles was "not willing to travel to the U.S.," Mt. Gox attorneys wrote.

The filing cites a summons from the US Department of Treasury's Financial Crimes Enforcement Network, which has closely watched virtual currencies such as Bitcoin. That summons, which requires Karpeles to appear in Washington, DC, on Friday, "did not specify topics for discussion," Mt Gox lawyers wrote in the filing.

"Mr. Karpeles is now in the process of obtaining counsel to represent him with respect to the FinCEN Subpoena," the filing said. "Until such time as counsel is retained and has an opportunity to 'get up to speed' and advise Mr. Karpeles, he is not willing to travel to the U.S."

Mt. Gox's lawyers also said there was no guarantee that Karpeles would attend a May 5 deposition in the case.

At its height, Mt. Gox was one of the largest and most popular Bitcoin exchanges. However, the troubled exchange suspended customer withdrawals on February 7, claiming a fundamental flaw existed in Bitcoin that affected all transactions. Mt. Gox later apologized for the issue and said it had developed a workaround that would allow it to resume service, but that has not yet happened.

The exchange filed for Chapter 15 bankruptcy protection last month after Karpeles revealed that it lost almost 750,000 customer bitcoins, as well as 100,000 of the exchange's own bitcoins. The majority of the affected customers are based in the US.

Karpeles, who is not charged with a crime, has maintained that the bitcoins were stolen by cybercriminals through a security flaw in Mt. Gox's exchange system. But hackers who hijacked Karpeles' Reddit account and personal blog last month allege fraud and claim the exchange kept some of the bitcoins that were reported stolen.