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Steele, Stacey; Morishita, Tetsuo --- "Lessons from Mt Gox: practical considerations for a virtual currency insolvency" [2020] ELECD 230; in Arner, W. Douglas; Wan, Yee Wai; Godwin, Andrew; Shen, Wei; Gibson, Evan (eds), "Research Handbook on Asian Financial Law" (Edward Elgar Publishing, 2020) 479

Book Title: Research Handbook on Asian Financial Law

Editor(s): Arner, W. Douglas; Wan, Yee Wai; Godwin, Andrew; Shen, Wei; Gibson, Evan

Publisher: Edward Elgar Publishing

Section: Chapter 24

Section Title: Lessons from Mt Gox: practical considerations for a virtual currency insolvency

Author(s): Steele, Stacey; Morishita, Tetsuo

Number of pages: 20

Abstract/Description:

This chapter examines the Japanese insolvency proceedings of Mt Gox, one of the largest virtual currency exchanges in the world at the time of its collapse. The case was controversial due to the drastic increase in the price of Bitcoins after the proceedings commenced in 2014. Complex property, financial services and insolvency law issues are still being worked through for the first time in Japan, but the case demonstrates the flexibility of Japanese insolvency laws which were substantially reformed in the early 2000s. The chapter also considers the impact of reforms in 2016 emanating from Japan’s experience. Mt Gox also drew attention to the intersection of exchanges with traditional payment systems as a result of the increase in the use of virtual currencies and the technology underlying Bitcoin known as blockchain. The chapter concludes by considering further reform options for the regulation of exchanges.