BitOcean is latest contender for Mt. Gox assets

The startup plans a new Japanese Bitcoin exchange focused on security

A group of creditors of failed Bitcoin exchange Mt. Gox wants to acquire its assets and set up a new exchange for the digital currency in Japan.

BitOcean Japan is in talks with Mt. Gox's bankruptcy trustee in hopes of acquiring its assets, according to Daniel Kelman, co-founder of the new Tokyo startup.

Once the world's largest trading place for Bitcoin, Mt. Gox collapsed in February with liabilities of ¥6.5 billion (US$63.6 million) and has been in liquidation procedures under the supervision of the Tokyo District Court.

Mt. Gox had said some 850,000 bitcoins were unaccounted for, worth roughly $474 million at the time, and could have been stolen by hackers. It later said 200,000 bitcoins had been found in an old-format wallet, which would be worth about $124 million now.

BitOcean Japan wants to establish a Bitcoin exchange focused on transparency and security. It is collaborating with New York-based cryptocurrency exchange Atlas ATS to launch the new trading platform.

"This is a win-win for creditors and BitOcean, since BitOcean will distribute bitcoins at no cost to creditors, give creditors 49 percent of the exchange and BitOcean will have a list of new clients with 200k bitcoins ready to trade or withdraw," Kelman, a trademark lawyer, wrote in an email. He did not elaborate on details.

The backers want the bitcoins to be distributed as bitcoins, not cash, to Mt. Gox creditors so they will not lose value in the ups and downs of the volatile digital currency. It was trading at $621 on Tuesday, according to CoinDesk.com, up from $558 when Mt. Gox went bust.

While BitOcean Japan has been discussing its plan with Mt. Gox trustee Nobuaki Kobayashi, he has shown no indication of willingness to consider reviving any part of Mt. Gox. A FAQ about a meeting for creditors on July 23, posted Monday on the Mt. Gox website that Kobayashi is managing, suggests that the liquidation will go ahead as planned.

An earlier plan to revive Mt. Gox by U.S.-based Sunlot Holdings , with its SaveGox.com website, appeared to have failed as the liquidation moved forward.

The BitOcean Japan bid for Mt. Gox has a better chance than Sunlot because it does not involve the use of creditor funds for financing and involves original creditors to the failed exchange, Kelman said, adding that Mt. Gox CEO Mark Karpeles favors the BitOcean plan.

"We do not want to 'save Gox,'" he wrote. "Gox can and should die -- the term "Goxxing" is accurate and should remain in the Bitcoin lexicon for the ages. The creditors and Bitcoin are what is important. We want to save the creditors and work to preserve their remaining assets."

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Tim Hornyak

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