Judge Freezes U.S. Assets of Mt. Gox CEO, Related Companies

A federal judge in Chicago froze the U.S. assets of the chief executive of Tokyo-based Mt. Gox as part of a customer lawsuit against the defunct bitcoin trading exchange, The Wall Street Journal reported. Separately, regulators took steps to gain greater control of the fledgling virtual currency and protect consumers from bitcoin scammers. The moves are the latest in a string of legal and regulatory developments related to five-year-old bitcoin, which has exploded in value and popularity over the past year but also has attracted scrutiny for its ties to illegal activity such as money laundering. Mt. Gox collapsed last month and has filed for bankruptcy protection in the U.S. and Japan. The exchange has disclosed that it has lost 750,000 of customer bitcoins and 100,000 of its own stash, together worth more than $500 million at current prices. U.S. District Judge Gary Feinerman placed a temporary restraining order on the assets of Mt. Gox CEO Mark Karpelès, along with a related U.S. company and the Japanese company that operates the bitcoin exchange. The Japanese parent company that runs the exchange was shielded from the order because of ongoing bankruptcy proceedings. The ruling came as part of a lawsuit filed on behalf of bitcoin customers who were unable to withdraw their bitcoins and cash from Mt. Gox as it teetered. The lawsuit is seeking class-action status. Read more. (Subscription required.)