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Novel BVI litigation related to world’s largest Bitcoin exchange

31 July 2014

The bursting of the Bitcoin bubble and the demise of MtGox Co, Ltd attracted global headline news. In a case which raised interesting and novel points concerning the ability of foreign representatives to avail themselves of orders in aid of foreign proceedings under Part XIX of the BVI Insolvency Act 2003, Harneys acted for the Japanese Bankruptcy Trustee of MtGox Co Ltd, the former operator of the world’s largest Bitcoin exchange.
In the matter, Harneys brought proceedings against a BVI company providing on-line merchant trading account services seeking the return of $6.2 million held in an on-line account to the credit of MtGox Co Ltd. Harneys successfully obtained judgment for US$6.2 million and was able to procure the return of these funds to the Bankruptcy Trustee so they could be applied for the benefit of creditors in the liquidation. The case raised complex issues concerning the contractual terms of business in respect of on-line account services.
Partner Andrew Thorp led the Harneys team involved in this matter.