Court extends bankruptcy probe of Mt. Gox mess

The complexity of the losses is slowing the bitcoin exchange's bid for rehabilitation

The Tokyo District Court has granted a bankruptcy examiner six more weeks to assess the convoluted situation surrounding failed Bitcoin exchange Mt. Gox.

Lawyer Nobuaki Kobayashi has until May 9 to submit his report to the court, according to the latest notice on the Mt. Gox website.

The original deadline for the report was Friday, four weeks after Mt. Gox filed for bankruptcy protection at the court with liabilities of ¥6.5 billion (US$63.6 million).

It's unclear why Kobayashi, who was appointed by the court to probe Mt. Gox, received the extension. Kobayashi's office said he could not comment on the case.

"I don't know exactly why the extension request was made, but of course there are a lot of things to look into in this case," said Kazumasa Kawai, a lawyer representing Mt. Gox.

Investors seeking answers about what happened to the hundreds of thousands of bitcoins lost in the failure of Mt. Gox, once the world's largest trading platform for the digital currency, will have to endure a long wait.

If the court receives the report on May 9, it will consider the findings before issuing a decision about whether Mt. Gox should be rehabilitated or liquidated. Kawai said he does not know how long that process might take.

He also did not know whether Mt. Gox CEO Mark Karpeles will go overseas for questioning by lawyers in relation to a U.S. class-action lawsuit accusing Mt. Gox of fraud.

Hoping to rebuild itself so it can "repay debts to creditors," Mt. Gox applied for civil rehabilitation, a process that requires judicial approval.

While the approval can take as little as a week, the complex trails of bitcoin movements in and out of the exchange, as well as Mt. Gox's reported loss of over 500,000 coins due to a software issue, has made assessing the company challenging.

If the judge approves the rehabilitation petition, Mt. Gox would have to provide a restructuring plan, but investors will have to wait until May for news of the next step in the process.

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Tim Hornyak

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