Skip to main content

The Bitcoin Bugle: Federal Judge Really Wants To Meet Mark Karpelès

  • Author:
  • Updated:

If the Mt. Gox founder would like to avail his company of all of the wonderful protections offered by Chapter 15 of the U.S. Bankruptcy Code, he’s going to have to spend a bitcoin or two on a ticket to Dallas.

U.S. Bankruptcy Judge Stacey Jernigan on Tuesday ordered Karpeles to appear on April 17 in Dallas at the offices of Baker & McKenzie, the law firm that represents Mt. Gox….

"If he avails himself of this court, my God, he is going to get himself over here," Jernigan said at the Bankruptcy Court hearing in Dallas at which she ordered Karpeles to appear.

John Mitchell, a Baker & McKenzie attorney, said the company may replace Karpeles as the "foreign representative" of Mt. Gox in the U.S. bankruptcy court, a suggestion that did not sit well with the judge.

"He filed this case," she responded curtly.

Judge Jernigan isn’t fucking around. Neither is China, which was apparently serious about banks not doing any kind of business at all with anyone involved in the bit-trade.

China's central bank has ordered the country's commercial banks and payment companies to close bitcoin trading accounts in two weeks, according to people with knowledge of the matter, dealing another blow to the virtual currency….

The latest move by the People's Bank of China is a huge blow to the country's bitcoin exchanges, which have found their footing in the more than three months since Chinese authorities appeared to take measures clamping down on the industry. In December, the PBOC ordered financial institutions to stop dealing with bitcoin. Later that month, it made clear that third-party payment processors could not help exchanges collect money from users.

There is a bright side.

One of the people familiar with the latest directive said that the central bank does not intend to ban bitcoin trading in China, and said the move is to "enforce what was already said in the December document." That document had said bitcoin is not a currency with "real meaning" and does not have the same legal status as a currency, but that the public is free to buy and sell bitcoin online provided that they accept the risk.

If that’s not enough for you Chinese bitcoin addicts, you can always head south, to Vietnam and its benevolent neglect of matters cryptocurrent.

A company Wednesday announced the launch of Vietnam’s first Bitcoin exchange in late April though the central bank has ruled out recognition for the digital money.

Bitcoin Vietnam said it would open a floor called VBTC with Israeli partner Bit2C company….

“We contacted the legal department at the State Bank of Vietnam and were told that since they do not accept Bitcoin as a currency, [it] does not fall under the purview of the bank and we do not have to register with the bank.

“We also contacted the Ministry of Industry and Trade and were told that Bitcoin is not a commodity and so does not fall under the ministry’s jurisdiction and we do not need to register to it.”

That’s all well and good for now, Kansas City Fed President Esther George says. But eventually, bitcoin will need the likes of the Fed to survive. I mean, seriously: You can’t even by a Stradivarius with it without first creating a derivative to protect all involved.

Federal Reserve policy maker said Friday that bitcoin will continue to “struggle” unless the virtual currency secures some form of official backing….

“At this stage it is more of an innovation – I don’t think of it as a currency,” said Ms. George in response to an audience question after a speech in Kansas City, citing the absence of any government guarantee of bitcoin’s value. “At this stage, a buyer or investor has to be aware that’s what it is,” she said, adding she believed it would struggle as “a broader form of payment” unless it secures official status.

Still don’t get it? Well, for the Esther Georges among you, there’s a comic strip that purports to explain it all.

Judge orders Mt Gox CEO to U.S. for questions on failed bitcoin exchange [Reuters]
China Cracks Down on Bitcoin [WSJ]
Vietnam’s first Bitcoin exchange to open in April [Thanh Nien News]
Bitcoin Will Struggle Without Government Backing – Fed’s George [WSJ MoneyBeat blog]
BitBeat: Bitcoin, Stradivarius Make Beautiful Music Together [WSJ MoneyBeat blog]
How to Explain Bitcoin to Your Mom! [DealBook]