UPDATED 09:11 EDT / APRIL 17 2014

Does Bitcoin really need MtGox? Probably not…

small__8705948289Ailing Bitcoin exchange market Mt.Gox is facing liquidation after a Japan court denied its bid for rehabilitation.

“The Tokyo District Court recognized that it would be difficult for the company to carry out the civil rehabilitation proceedings and dismissed the application for the commencement of the civil rehabilitation proceedings,” Mt.Gox lawyer Nobuaki Kobayashi said.

Despite Kobayashi’s revelation, at least one group of brave investors is determined to revive Mt.Gox. It’s spokesperson insisted that the Mt.Gox still has an important role to play in the Bitcoin community, as well as the future of the cryptocurrency itself.

William Quigley, managing director of Santa Monica-based venture capital firm Clearstone Venture Partners, John Betts, a former Morgan Stanley and Goldman Sachs executive, and former child actor turned venture capitalist Brock Pierce, are a part of a group of investors who want to resuscitate Mt.Gox.

In an interview on CNCB earlier this week, Quigley said that Mt.Gox is much more than just assets and believes it still has a very important role in the continuation of Bitcoin. The group is offering 1 Bitcoin to purchase Mt.Gox, and if they succeed Betts’ name has been penciled in to serve as the new CEO.

“I want to put the one bitcoin term in context. That is a symbolic amount. It’s akin to what we do in the US when we buy a business that has a negative net worth,” Quigley explained the 1 Bitcoin price of the proposed acquisition.

Quigley stated that in order to revive Mt.Gox, his group would need to fix the securities issues first, then move on to rehabilitating it. One of the reasons the group is so intent in acquiring and rehabilitating Mt.Gox is the recent investor interest in any business that deals with bitcoin.

Big bucks Bitcoin deals

 

Circle Internet Financial recently closed a $17 million Series B funding led by Breyer Capital, Accel Partners and General Catalyst Partners. The deal was completed with the participation of Oak Investment Partners, Pantera Capital and the Bitcoin Opportunity Fund, which is run by Barry Silbert, founder and chief executive officer of SecondMarket and founder of the Bitcoin Investment Trust. The new round of funding brings Circle’s total funding to $26 million.

Kraken also received $5 million in a Series A funding led by Hummingbird Ventures and the funding will be used to strengthen its position in  the global Bitcoin market.

Though reviving what was once the world’s biggest Bitcoin exchange market would be highly lucrative if it could be pulled off, it still begs the question as to whether Mt.Gox really is that important for the cryptocurrency.

Good riddance Mt.Gox?

 

Mt.Gox's Mark Karpeles blamed Bitcoin for the exchange's collapse

Mt.Gox’s Mark Karpeles blamed Bitcoin for the exchange’s collapse

Mt.Gox has been out of the loop since February and Bitcoin is doing just fine and dandy without it. Admittedly, Bitcoin’s value took a nose-dive in the wake of Mt.Gox’s collapse, but the cryptocurrency is already recovering. Bitcoin’s value is now well up, recently hitting the $500 mark again.

The demise of Mt.Gox is attributed to its lax practices and use of poor technology. If you’re a company dealing with people’s money, you have no right to put aside security measures. CEO Mark Karpeles filed for bankruptcy, stating that 550,000 Bitcoins were stolen from the company but he’s yet to reveal any convincing evidence of theft. Some former and current employees of Mt.Gox revealed that they were quite concerned with how Karpeles was running the company because of his lavish lifestyle, and believed he was using other people’s money to fund it. The unnamed employees sat down with Karpeles wanting to know if their clients’ money was being used, but while the CEO denied it was, he didn’t produce any evidence to back this up.

Even if Quigley’s group successfully acquires Mt.Gox, its name has already been dragged through the mud. Chances are, people will no longer be interested in conducting their Bitcoin dealings on the site. Unless Quigley and co., can entirely revamp Mt.Gox to ensure the safe-keeping of people’s money and Bitcoins, and at the same time come up with some kind of value proposition to tempt people back, it’s likely any reincarnation would be still-born.

After the demise of Mt.Gox, Karpeles resigned from the Bitcoin Foundation’s board of directors. He blamed the Bitcoin protocol for what happened to his exchange, but this was refuted by Bitcoin’s core developers. His statement brought negative attention to the cryptocurrency and his resignation from the Bitcoin Foundation was seen as the start of a new era for Bitcoin.

In a previous interview, SiliconANGLE’s Founding  Editor Mark “Rizzn” Hopkins predicted that Mt.Gox’s collapse would result in a short-term instability for the price of Bitcoin at worst. Even so, he insisted that “the death of MtGox is ultimately good for the community and stability of the currency.”

And it looks as though he was right. Bitcoin was valued at $4497.9 according to Bitcoinaverage.com at the time of writing, a significant increase after its value dropped to $140 when Mt.Gox went offline.

As for Karpeles, he’s still refusing to travel to the US to answer questions related to Mt.Gox’s bankruptcy, despite an order from Judge Stacey Jernigan ordering him there. His lawyers blamed a conflict for Karpeles’ refusal to go to the US.

It was noted that Karpeles received a subpoena to appear on in front of the US Department of Treasury’s Financial Crimes Enforcement Network, an anti-money-laundering division, which has been closely monitoring the cryptocurrency. However, Karpeles’ lawyers stated that the subpoena did not specify topics for discussion and Karpeles will only travel to the US when everything has been cleared.

photo credits: zcopley via photopin cc; KoFahu meets the Mitropa via photopin cc

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