Bitcoin exchange MtGox to start liquidation process

Failed Bitcoin exchange MtGox is to be liquidated after a Japanese court ordered bankruptcy proceedings on Thursday, a lawyer appointed to carry out the process said. "(I) will implement the bankruptcy proceedings, in which the assets of the bankrupt entity will be managed and converted into cash," said a statement attributed to bankruptcy trustee Nobuaki Kobayashi on the exchange's website. "If funds for a distribution are secured, the liquidating distribution will be made." He added that a creditors' meeting will be held on July 23, but warned that there were no guarantees about how much money -- if any -- investors would get back. "The actual amount and value of Bitcoins and cash of the company will be investigated by the bankruptcy trustee with the cooperation of certain experts," the statement said. The ruling by the Tokyo District Court all but spells the end for a firm that at one time processed around 80 percent of global transactions in the virtual currency. Bitcoins are generated by complex chains of interactions among a huge network of computers around the planet and are not backed by any government or central bank. The MtGox exchange went dark in February, shortly after it blocked Bitcoin withdrawals, claiming there was a bug in the software that underpins the virtual currency, making it vulnerable to thieves. It filed for bankruptcy protection soon thereafter, admitting it had lost 850,000 coins which were worth nearly $500 million at the time. It made a similar filing in the United States in early March. Last week, the court named Kobayashi as provisional administrator, which meant the exchange's under-fire chief executive Mark Karpelesceded control of the company to him. Karpeles has reportedly refused to travel to the United States, where he was being asked to appear for questioning in connection with MtGox's collapse.