Some Mt. Gox Customers Want CEO Out During Bankruptcy

Mt. Gox customers with frozen bitcoin accounts are targeting Chief Executive Mark Karpeles, arguing in court papers he is unfit to lead the Japanese bitcoin exchange through its U.S. bankruptcy case, The Wall Street Journal reported. In papers filed Tuesday in U.S. Bankruptcy Court in Dallas, lawyers for several Mt. Gox customers pointed out Mr. Karpeles has been accused of fraud and said he should no longer have power over Mt. Gox's U.S. assets in his official role as Mt. Gox Co.'s foreign representative. "At minimum, he is guilty of gross mismanagement," the lawyers for customers said in court papers. Leaders who are in charge of a bankrupt company often have a responsibility to act in a way that helps the reorganization efforts. Often in Chapter 15 cases that are filed in a U.S. court, an outside leader has already taken over control. A lawyer representing Mr. Karpeles in his capacity as the company's administrator didn't return multiple phone calls for comment. In court papers, lawyers for the Mt. Gox customers cited a "concerning lack of transparency" since Mt. Gox filed for bankruptcy both in Japan and in a U.S. court. Mt. Gox filed for Chapter 15 bankruptcy protection on March 9 to stop angry customers who sued it in Illinois from targeting the cash it is holding in U.S. bank accounts. Most of the company's reorganization efforts are taking place in Japan, where administrators are looking for its lost bitcoins. Read more. (Subscription required.)