[Translation]1
Tokyo District Court 2014 (fu) No. 3830
Bankrupt Entity: MtGox Co., Ltd.
Report (under Article 157 of the Bankruptcy Act)
July 23, 2014
To: Tokyo District Court, Collegiate Section of 20th Civil Division
Bankrupt Entity: MtGox Co., Ltd.
Bankruptcy Trustee: Attorney-at-law Nobuaki Kobayashi
I.

Situation That Led to the Commencement of Bankruptcy Proceedings
1. Application for the Commencement of Civil Rehabilitation Procedure
The bankrupt entity, a company that operated an online exchange of bitcoins(“BTC”), a so-called virtual currency, made an application for the commencementof civil rehabilitation procedure at the Tokyo District Court on February 28, 2014
(Tokyo District Court 2014 (rehabilitation) No. 12). According to the Application
for Commencement of Civil Rehabilitation Procedure, the reasons for the bankrupt
entity’s application included the fact that, at the time such application was made,the bankrupt entity was insolvent, and its liabilities exceeded its assets, which was
resulted from the potential illicit transfer of the BTC, which were managed by thebankrupt entity, through illegal access by exploiting a bug in the basic system for
BTC, and a decrease in the amount of the bankrupt entity’s cash deposit (although
the reason therefor has yet to be identified). At the time the bankrupt entity madeits application, it had suspended all access to its website related to the abovetransactions.
In response to the application stated above, on February 28, 2014, the Tokyo
District Court issued to the bankrupt entity, in accordance with the Civil
Rehabilitation Act, a supervisory order, an investigation order, a preservation orderprohibiting, among other matters, the payment of debts, and a comprehensive

1

This translation is prepared for reference purpose only. The Japanese version is the original andif there is any discrepancy between the Japanese original and this translation, the Japanese original
supersedes and governs.
1prohibition order. Additionally, the court appointed Attorney-at-law, Nobuaki
Kobayashi, who is currently serving as the bankruptcy trustee, as supervisor andinvestigator.
2. Dismissal of the Application for Commencement of Civil Rehabilitation
Procedure
Subsequently, an investigation was proceeded by the bankrupt entity with regard to
the past factual elements relating to the disappearance of the BTC and the missing
funds. However, it was expected that the said investigation would require
additional time, and at the time, there were no prospects for the restart of thebusiness. Moreover, although the bankrupt entity continued to negotiate withsponsor candidates, it was unable to even commence the selection process inconcrete terms. Therefore, the bankrupt entity concluded that drafting arehabilitation plan would be difficult.
On April 16, 2014, the Tokyo District Court dismissed the application for thecommencement of civil rehabilitation procedure, and on the same day, issued anorder for provisional administration and appointed Attorney-at-law Nobuaki
Kobayashi as the provisional administrator. The provisional administrator
appointed 8 other attorneys-at-law as deputy provisional administrator, andimmediately commenced the preservation of the assets, etc., of the bankrupt entity.
3.

Order of Commencement of Bankruptcy Proceedings
On April 24, 2014, the Tokyo District Court issued to the bankrupt entity an orderof commencement of bankruptcy proceedings and appointed Attorney-at-law
Nobuaki Kobayashi as the bankruptcy trustee.

II.

Past Events and Present Situation Concerning Bankrupt Entity
The bankrupt entity had entrusted its service concerning operation of the BTC
online exchange to its parent company, TIBANNE Co., Ltd. The bankrupt entity
did not have employees, and the bankrupt entity used its office by subleasing a partof the building that had been leased by TIBANNE Co., Ltd. from a third party.
The bankrupt entity used most of itsequipment, such as servers and personal
computers, by leasing or subleasing the equipment owned by TIBANNE Co., Ltd.
or leased by TIBANNE Co., Ltd. from third parties.

2

Immediately after the issuance of the order for provisional administration, I
commenced an effort to reduce costs by limiting equipment, personnel and officespace required for bankruptcy trustee’s business. As a result, as compared to theamount of cost for entrustment of business in March 2014, which is the period after
the application for commencement of civil rehabilitation procedure and prior to thecommencement of bankruptcy proceedings, i.e., approximately JPY 18 million, theamount of the same cost in April 2014, which is the month that includes thecommencement of bankruptcy proceedings, and that in May 2014, which is the timeafter commencement of bankruptcy proceedings, decreased to approximately JPY
13 million and JPY 9 million, respectively. I am still continuing the effort for
further cost reduction.
III. Past Events and Present Situation Concerning Bankruptcy Estate
1. Present Situation of Bankruptcy Estate
The status of the bankruptcy estate, based on the investigation conducted up to thetime of preparation of this Report, is as shown in the List of Assets and the Balance
Sheet; provided, however, that, since the investigation of the status of holdings of
BTC is still on-going, such List of Assets and Balance Sheet do not contain BTC
held by the bankrupt entity, and claims for return of BTC (which constitute thebankruptcy claim).
2. Past Events Concerning Bankruptcy Estate
Principal past events concerning the bankruptcy estate are as follows:(1) Deposits, etc.
Immediately after the issuance of the order for provisional administration, I took
measures to secure the deposits of the bankrupt entity (i.e., (i) receipt of amounts
that had been deposited with the counsel of applicant and (ii) transfer of funds tothe bankruptcy trustee’s account by the closure of the bankrupt entity’s domestic
accounts). As a result, the balance in the account the bankruptcy trustee has
secured as of July 18, 2014 is JPY 698,246,328.
(2) Securing of BTC
Immediately after the issuance of the order for provisional administration, I (i)secured the private keys to the addresses at which 202,106.00072BTC held by thebankrupt entity was managed, (ii) verified the safety of the method to manage
and move the BTC, with the assistance of Netagent Co., Ltd., and (iii) moved the3

BTC to the addresses managed by me (the balance after deduction of transaction
fee: 202,105.837821BTC).
The investigation on the existence of BTC remaining in the bankrupt entity’s
data is still ongoing.
(3) Realization and collection of other assets
Also as for the assets, which have been found in the investigation to be able tobe realized, other than those stated above, I have commenced realization andcollection, one by one, since the time when the order of commencement ofbankruptcy proceedings was issued. I have already collected the amountdeposited by the bankrupt entity as money for release from a provisional seizure,and I have commenced other efforts for collection of amounts deposited to othercompanies and the amounts of short-term loans to affiliates.
(4) Preservation of data, etc.
Immediately after the issuance of the order for provisional administration, I
banned access by TIBANNE Co., Ltd., without my permission, to the principal
system and data related to the bankrupt entity’s businesses, and, at the same time,with the assistance of Fujitsu Limited, I took the following measures: (i)assumption (by me) of control over the system related to the bankrupt entity’sbusinesses, and (ii) measures to prevent access to the server and the like from theoutside, in order to enhance the security against attempts to manipulate thebankrupt entity’s data and system hacking. In addition, I have obtained copies
of principal data held by the bankrupt entity.
IV.

Work regarding preservation of foreign assets
I continued to proceed with the recognition proceedings of foreign mainproceedings under Chapter 15 of the U.S. Bankruptcy Code, which the bankrupt
entity applied to the United States Bankruptcy Court for the Northern District ofTexas Dallas Division on March 9, 2014. As a result, on June 18, 2014, such court
issued an order recognizing the bankruptcy proceedings as the foreign mainproceedings.

V.

Investigation of disappearance of BTC, etc.
I began investigation of the existing assets of the bankrupt entity, background4

behind the disappearance of BTC, etc. by delegating such work to Deloitte Touche
Tohmatsu LLC and ReEx Accounting Firm. Such investigation still continues
now and the completion date is undetermined as of today. In addition, when I am
requested by a public institution to cooperate with the investigation, I am
conducting possible cooperation.
VI. Subsidiary/ Affiliated Company
1. Subsidiary, etc.
The bankrupt entity has subsidiaries and sub-subsidiary in the United States and theRepublic of Poland. However, I consider that, in principle, it is not necessary for
those subsidiaries, etc. to exist after the commencement of bankruptcy proceedingsof the bankrupt entity. Therefore, I will investigate, review, and sequentially takeappropriate measures such as dissolution, and will make efforts to collect assets.
2.

Affiliated companies
The bankrupt entity has several affiliated companies (parent company, etc.), and hasloan receivables, etc. to the following companies, and, therefore, it will makeefforts to collect them.

(1) TIBANNE Co., Ltd.
The bankrupt entity has loan receivable in the amount of 772,791,001 yen (basedon the settlement accounts of the bankrupt entity as of April 24, 2014) to TIBANNE
Co., Ltd., which is the parent company of the bankrupt entity, and, therefore, thebankrupt entity requested for repayment and is confirming the assets of TIBANNE
Co. Ltd. and plan to be repaid from the purchase price of assets held.
(2) K.K. Shade 3D
Since the bankrupt entity has loan receivable in the amount of 338,139,321 yen(amount based on the settlement accounts of the bankrupt entity as of April 24,2014) to K.K. Shade 3D, which is a subsidiary of TIBANNE Co., Ltd., the bankrupt
entity requested for repayment and is confirming assets of K.K. Shade 3D.
(3) K.K. Bitcoin. cafe
The bankrupt entity has loan receivable in the amount of 60,000,000 yen (amountbased on the settlement accounts of the bankrupt entity as of April 24, 2014) andaccrued interest to K.K. Bitcoin. cafe. K.K. Bitcoin. cafe was ordered to5commence bankruptcy proceedings by the Tokyo District Court on June 18, 2014
(Tokyo District Court 2014 (fu) No. 5603). I filed proof of bankruptcy claims
with respect to the above loan and accrued interest in the bankruptcy proceedings inJuly 2014.
VII.

Existence of circumstances requiring temporary restraining order, as stipulated in
Article 177, Paragraph 1 of the Bankruptcy Act, and officer’s liability assessment
order, as stipulated in Article 178, Paragraph 1 of the Bankruptcy Act
With respect to the existence of circumstances requiring a temporary restraining
order, as stipulated in Article 177, Paragraph 1 of the Bankruptcy Act, and officer’s
liability assessment order, as stipulated in Article 178, Paragraph 1 of the
Bankruptcy Act, investigation is still required to take place concurrently with theinvestigation stated in V. above.

VIII. Corporation assuming business
I am searching for a company which desires to assume the business, etc. of thebankrupt entity. The company that will assume the business is not determined at
this point, but several companies showed interest and I continue to conduct the
selection process.
IX.

X.

Suspension of lawsuits
At the commencement of bankruptcy, several lawsuits, both domestic andinternational, existed in which the bankrupt entity was involved in litigation as adefendant. However, those lawsuits are regarding the bankruptcy claims, and,
therefore both domestic and international lawsuits are suspended in accordancewith the Bankruptcy Act and Chapter 15 of the U.S. Bankruptcy Code.

Matters regarding proceedings of bankruptcy proceeding
1. Filing of proof of bankruptcy claimsWith respect to filing of proofs of bankruptcy claims in this case, since extremely
large number of creditors exist all over the world, I am considering to implement a
reasonable and smooth method of filing. For such purposes, it is necessary (i) to
sufficiently confirm, with the cooperation of professionals, the details and methodof use of data regarding the business of the bankrupt entity, which I preserved, and(ii) to consider the situation of the investigation of the background behind the6disappearance of BTC. Accordingly, it is expected to take a few months todetermine the filing method. In light of this, although the deadline for filing theproof of claims of bankruptcy in these bankruptcy proceedings is set as November
28, 2014, I consider it is necessary and reasonable to postpone the date toreasonable timing.
2

Provision of information on WebSite
Since extremely large number of creditors exist all over the world in this case, I
plan to disclose information, etc., necessary for creditors regarding this case on the
WebSite (https://www.mtgox.com), which I manage as much as possible from time
to time.
End of document

7

[Translation][Case Number:] Tokyo District Court 2014 (fu) No. 3830
Bankrupt Entity: MtGox Co., Ltd.
Bankruptcy Trustee: Nobuaki Kobayashi, Attorney-at-law

List of Assets(As of April 24, 2004, the date of the order of commencement of bankruptcy proceedings)(In JPY)

Assets
No. Item
1 Cash and deposits
CashAppraised amount (amountincorporated into thebankruptcy estate)
1,336,251
1,359,503
00Book value

Mizuho Bank, Shibuya Branch, Ordinary deposit account No.1457705

120,000

Mizuho Bank, Shibuya Branch, Ordinary deposit account No.1497669

0Mizuho Bank, Shibuya Branch, Foreign currency ordinary deposit account No.
9110151
Mizuho Bank, Shibuya Branch, Foreign currency ordinary deposit account No.
9110186
Mizuho Bank, Shibuya Branch, Foreign currency ordinary deposit account No.
9110216
Mizuho Bank, Shibuya Branch, Foreign currency ordinary deposit account No.
9110267
Mizuho Bank, Shibuya Branch, Foreign currency ordinary deposit account No.
9110232
Mizuho Bank, Shibuya Branch, Foreign currency ordinary deposit account No.
9110275
Mizuho Bank, Shibuya Branch, Foreign currency ordinary deposit account No.
9110283
Mizuho Bank, Shibuya Branch, Foreign currency ordinary deposit account No.
9110259
Yucho Bank, Shibuya Branch, Consolidated account No. 10170-48410711

0
0
0
91
28
25
89
945
279,457

Japan Net Bank, Suzume Branch, Ordinary deposit account No.2559084

596,168

Yachiyo Bank, Shibuya Branch, Ordinary deposit account No. 0623839

7

Yachiyo Bank, Shibuya Branch, Foreign currency ordinary deposit account No.
0623949
Yachiyo Bank, Shibuya Branch, Foreign currency ordinary deposit accountNo.
0623950
Yachiyo Bank, Shibuya Branch, Foreign currency ordinary deposit account No.
0623938
2 Short-term loans

The account has been closed, and the cash in the account has already been transferred into the accountof the trustee.
The account has been closed, and the cash in the account has already been transferred into the account47of the trustee.
Currency: USD; The account has been closed, and the cash in the account has already been
4transferred into the account of the trustee.
Currency: GBP; The account has been closed, and the cash in the account has already been
5transferred into the account of the trustee.
Currency: AUD; The account has been closed, and the cash in the account has already been
97
transferred into the account of the trustee.
Currency: NZD; The account has been closed, and the cash in the account has already been
4transferred into the account of the trustee.
Currency: DKK; The account has been closed, and the cash in the account has already been87
transferred into the account of the trustee.
Currency: HKD; The account has been closed, and the cash in the account has already been
26
transferred into the account of the trustee.
Currency: SGD; The account has been closed, and the cash in the account has already been
25
transferred into the account of the trustee.
Currency: CHF; The account has been closed, and the cash in the account has already been87
transferred into the account of the trustee.
The account has been closed, and the cash in the account has already been transferred into the account945
of the trustee.
The account has been closed, and the cash in the account has already been transferred into the account279,213of the trustee.
596,168 This account is in the process of closing.
The account has been closed, and the cash in the account has already been transferred into the account7of the trustee.
Currency: AUD; The account has been closed, and the cash in the account has already been
93,468transferred into the account of the trustee.
Currency: EUR; The account has been closed, and the cash in the account has already been
136,041transferred into the account of the trustee.
Currency: USD; The account has been closed, and the cash in the account has already been
100,677transferred into the account of the trustee.
The appraised amount is based on the amount actually converted into cash on or prior to July 18,02014.
This company is the parent company of the bankrupt. Repayment of the loan is currently being0
requested.
This company is an affiliated company of the bankrupt. Repayment of the loan is currently being0
requested.
152,6020

Rakuten Bank, Second Sales Branch, Ordinary deposit account No. 7018261

95,357
141,608
102,476
1,307,423,210

TIBANNE Co., Ltd.

772,791,001

K.K. Shade3D

338,139,321

Remarks

1/3

K.K. Bitcoin.Cafe

60,000,000

Robert Marie Mark Karpeles

136,175,781

MTGOX HongKong

This company is an affiliated company of the bankrupt, and an order of commencement of bankruptcy
0 proceedings for such company was issued on June 18, 2014. The filing of proof of claims has alreadybeen completed.
0 This person is the representative of the bankrupt. Repayment of the loan is currently being requested.
This company is an affiliated company of the bankrupt. Repayment of the loan is currently being0
requested.
0This company is the parent company of the bankrupt. The accounts receivable against this company
0comprise accrued interest on the loan.
Refund of this tax is currently being requested. The appraised amount is based upon the amount0
actually converted into cash on or prior to July 18, 2014.
Refund of this tax is currently being requested. The appraised amount is based upon the amount0
actually converted into cash on or prior to July 18, 2014.
Refund of this tax is currently being requested. The appraised amount is based upon the amount0
actually converted into cash on or prior to July 18, 2014.
2,000,000 Collected on June 4, 2014
765,233,649
231,557,866 The money deposited was already succeeded at the appraised amount on May 12, 2014.
500,698,397 The money deposited was already succeeded at the appraised amount on May 9, 2014.
32,977,386 The money deposited was already succeeded at the appraised amount on May 8, 2014.
The appraised amount is based on the amount actually converted into cash on or prior to July 18,02014.
0 Pending litigation
0 Collecting and/or reviewing collectibility.
The appraised amount is based on the amount actually converted into cash on or prior to July 18,
02014.
0 Convertibility into cash is currently being examined.
0 Convertibility into cash is currently being examined.
0 Convertibility into cash is currently being examined.
0 Convertibility into cash is currently being examined.
The appraised amount is based on the amount actually converted into cash on or prior to July 18,02014.
The contract has been cancelled, and the appraised amount is based on the amount actually converted0
into cash on or prior to July 18, 2014.
The contract has been cancelled, and the appraised amount is based on the amount actually converted0
into cash on or prior to July 18, 2014.
This is a refund of the money for release from provisional seizure deposited by the bankrupt and has
10,587,933
already been collected.
The appraised amount is based on the amount actually converted into cash on or prior to July 18,02014.
This development expense is currently under investigation, but may be an expense spent in the past0
and may have no value.
This development expense is currently under investigation, but may be an expense spent in the past0
and may have no value.
This development expense is currently under investigation, but may be an expense spent in the past0
and may have no value.
This development expense is currently under investigation, but may be an expense spent in the past0
and may have no value.
This development expense is currently under investigation, but may be an expense spent in the past0
and may have no value.
12779,181,097

317,107

3 Accounts receivable

925,826

TIBANNE Co., Ltd

562,026

Shibuya Tax Office (Interim payment of corporation tax)

242,200

Shibuya Metropolitan Taxation Office (Interim payment of enterprise tax and special
local corporation tax)
Shibuya Metropolitan Taxation Office (Interim payment of inhabitants tax on
corporation tax basis)
4 Provisional payment (to the Tokyo District Court)
5 Deposits paid
Counsel for applicant
Counsel for applicant
Counsel for applicant
6 Money deposited with other companies

80,80040,8002,000,000
783,948,565
241,459,630
509,510,685
32,978,250
1,693,444,088

CoinLabOthers500,000,000
1,193,444,088

7 Tools, furniture and fixtures

104,557,699

DELL Server
Violin Server
Chair
Apple Japan; 28 laptop computers

5,649,000
90,623,142
2,902,119
5,383,438

8 Security deposit

700,000

The Executive Center Japan K.K.

540,000

The Executive Center Japan K.K. (Security deposit for parking spaces）

160,000

9 Guaranty money deposited

10,586,875

10 Development expenses

85,875,146

Applico Inc.

33,453,375

Internet Escrow Services

3,073,459

Mandalah KK

31,993,500

The Phuse Inc.

4,572,513

Winsoft Technology Solutions Inc.

12,782,299

11 Inerest income
Total assets

03,990,797,660

2/3

Liabilities
No. ItemBook value

1 Claims on the estate and preferred bankruptcy claims (Taxes and other public charges)
Claims on the estate (Other expenses)

54,374,152
19,253,642

2 General bankruptcy claims (Money deposited from purchasers)

8,256,092,214

General bankruptcy claims (Transacting parties, etc.)

402,470,293
Total liabilities

8,732,190,301

Reported amountRemarks
The amount has not yet been
determined.
The amount has not yet been
determined.
The amount has not yet been
The procedures for investigation of claims have not yet been completed.
determined.
The amount has not yet been
The procedures for investigation of claims have not yet been completed.
determined.
The amount has not yet been
determined.

*1 The amounts stated in the "book value" column are,as a rule, entered by referring to the book value as of April 24, 2014, and such amounts do not correspond to their respective amounts of the proceeds from the conversion into cash thereof.
*2 As a rule, "Appraised amount (amount incorporated into the bankruptcy estate)" shows the amount actually collected on or prior to July 18, 2014.
*3 The bitcoins held by the bankrupt entity and the creditors' claims for the return of their bitcoins (bankruptcy claims) are not included in the assets and liabilities above.
*4 This list has been prepared based on the investigation results at the present point in time, and assets or liabilities not included in this list may be discovered as a result of further investigation.

* This translation is prepared for reference purpose only. The Japanese version is the original and if there is any discrepancy between the Japanese original and this translation, the Japanese original supersedes and governs.

3/3

[Translation]

Income and Expenditure Statement
From April 24, 2014
Through July 18, 2014

[Case Number:] Tokyo District Court 2014 (fu ) No. 3830
Bunkrupt Entity: MtGox Co., Ltd.
Bankruptcy Trustee: Nobuaki Kobayashi, Attorney-at-law(In JPY)
IncomeNo.

Abstract1

Cash and deposits succeeded from thebankrupt

2

Expenditure
AmountNo.

766,593,152

1

Office expenses

Deposits succeeded from the court

2,000,000

2

Expenses for notice of commencement ofbankruptcy proceedings to bankruptcy

6,890,292

3

Collection of monies deposited

10,587,933

3

Supplies expenses

3,345,161

4Interest income

124Professional fees

22,136,846

5Outsourcing fees

42,075,278

6Settlement money

6,310,433

7

Transportation expenses

Total

779,181,097

Abstract

Amount82,559Total

94,20080,934,769

Balance698,246,328* This translation is prepared for reference purpose only. The Japanese version is the original and if there is any discrepancy
between the Japanese original and this translation, the Japanese original supersedes and governs.

[Translation][Case Number:] Tokyo District Court 2014 (fu ) No. 3830
Bankrupt Entity: MtGox Co., Ltd.
Bankruptcy Trustee: Nobuaki Kobayashi, Attorney-at-law(As of April 24, 2004, the date of the order of commencement of bankruptcy proceedings)[Bankruptcy] Balance Sheet
In JPY
Appraised amount(amount incorporated
into the bankruptcy
estate)*1

Item

Cash and deposits

1,359,503

Claims on the estate andpreferred bankruptcy claims*373,627,794

Short-term loans

0General bankruptcy claims*38,658,562,507

Accounts receivable

0

Provisional payment

2,000,000

Total liabilities*2

8,732,190,301

Item

Deposits

765,233,649

Deposits paid with othercompanies

0

Tools, furniture and fixtures

0

Security deposit

0

Guaranty money deposited

10,587,933

Development expenses

0Interest income

12

Total assets

Filling amount*2

779,181,097*1 As a rule, "Appraised amount (amount incorporated into the bankruptcy estate)" shows the amount actually
collected on or prior to July 18, 2014.
*2 The bitcoins held by the bankrupt and the creditors' claims for the return of their bitcoins (bankruptcy claims) are
not included in the assets and liabilities above.
*3 The amounts of liabilities are based on the book value of the bankrupt at the time of the order of commencementof bankruptcy proceedings because requests for distribution and claims investigation procedures have not yet been
completed.
*4 This balance sheet has been prepared based on the investigation results at the present point in time, and assets or
liabilities not included in this balance sheet may be discovered as a result of further investigation.
* This translation is prepared for reference purpose only. The Japanese version is the original and if there is any
discrepancy between the Japanese original and this translation, the Japanese original supersedes and governs.