Investor group offers to buy Mt. Gox for 1 bitcoin - WSJ

Fri Apr 11, 2014 4:00am IST

Some of Bitcoin enthusiast Mike Caldwell's coins are pictured at his office in this photo illustration in Sandy, Utah, January 31, 2014. REUTERS/Jim Urquhart/Files

Some of Bitcoin enthusiast Mike Caldwell's coins are pictured at his office in this photo illustration in Sandy, Utah, January 31, 2014.

Credit: Reuters/Jim Urquhart/Files

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REUTERS - A group of investors is seeking to buy bankrupt bitcoin exchange Mt. Gox for a token payment of one bitcoin, or about $400, the Wall Street Journal reported citing sources.

The group justified the near-zero price citing an "information vacuum" over Mt. Gox's missing bitcoins that made it hard to place a value on the lost digital currency, the paper said. (r.reuters.com/peq48v)

Mt. Gox, once the largest bitcoin exchange, filed for bankruptcy in Japan in February, saying hackers had stolen 750,000 bitcoins belonging to its customers and 100,000 of its own bitcoins after exploiting a security flaw in its software.

The investor group includes Brock Pierce, a former child actor-turned entrepreneur, and venture capitalists William Quigley and Matthew Roszak.

The group hopes to revive the exchange and set aside 50 percent of its transaction fees to pay back burned customers and other creditors over time, the Journal said.

Mt. Gox said in March it "found" 200,000 bitcoins in an old-format online wallet which it had thought was empty, raising creditors' hopes of recovering some of their lost digital wealth.

The bitcoin exchange's creditors would have the option of receiving a prorated payment from the 200,000 recovered bitcoins, an estimated 20 percent recovery value on their claims, or receiving the equivalent amount in equity in the new exchange, the paper said.

A form of electronic money independent of traditional banking, bitcoins started circulating in 2009 and have become the most prominent of several fledgling digital currencies.

The acquisition must be approved by a Japanese bankruptcy court. However, the near-zero valuation of the proposed deal could prove to be a hurdle, the Journal said.

(Reporting by Supantha Mukherjee in Bangalore; Editing by Simon Jennings and Sriraj Kalluvila)

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