Once bitten, twice shy? Will MtGox creditors lend a hand to potential investors?

In its quest to revive the ill-fated Japanese bitcoin exchange, the high-profile investment group interested in purchasing it resorts to the unorthodox method of seeking the assistance of MtGox’s creditors

bitcoin mt goxFollowing the announcement last week that a group of investors is seeking to revive bankrupt Bitcoin exchange MtGox, a website has been launched in order to gather support from its creditors and prevent a liquidation of assets.

Under the name of Save Gox, the site aims to rally support and restore faith in the tarnished image of the digital currency.

The investment consortium, which includes former actor Brook Pierce who nowadays invests in technological innovations, has placed pleas on the Save Gox website, including a direct and candid request to its 127,000 creditors.

John Betts, whose resume includes former senior executive positions at Morgan Stanley and Goldman Sachs, is a mainstay of the consortium alongside Mr. Pierce, reports on a series of Bitcoin forums and news portals as being a self-appointed forerunner in rescuing the exchange, citing himself as “leading the proposed rehabilitation effort for MtGox.” 

He continues that “Right now, we are working with the Supervisor to convince them bankruptcy only protects Mark( Karpeles) and would be detrimental to creditors.”

“We need your help to stop a liquidation, which would be good neither for MtGox creditors nor Bitcoin’s reputation with the general public and regulators” further investors wrote on the website.

“Our goal? To provide restitution to customers and restore faith in the digital currency” the dialog continued.

According to the International Business Times, several creditors have backed the investors, who plan to acquire MtGox’s assets and revive the exchange, although the investors have yet to convicne the Japanese bankruptcy court to support their proposal.

The demise of MtGox represents the latest in a long line of Bitcoin-related events which have affected the confidence of investors and raised questions as to the sustainability of a peer-to-peer currency which has no central bank behind it, and no insurance against financial loss or bankruptcy of its exchanges.

In the aftermath of the seizure by US authorities of Silk Road last year, and the subsequent closure of Litecoin marketplace Atlantis, as well as Bitfloor having closed, the disappearance of MtGox along with vast quantities of investors’ funds does not bode well for Bitcoin’s appeal to conservative investors, however with flamboyant investment groups such as the one participated in by Brook Pierce, the future of virtual currencies could become even more high profile.

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Once bitten, twice shy? Will MtGox creditors lend a hand to potential investors?


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