Mt Gox, once the world’s largest bitcoin exchange, has filed for US bankruptcy in Dallas, a move that will temporarily put US legal action on hold against the Japanese company.

The company asked the US bankruptcy court to use its powers under Chapter 15 of the bankruptcy code to protect any US-based assets it may have while the company reorganises or liquidates under the authority of the Japanese court.

The company said without US bankruptcy protection it would spend substantial funds defending itself against a US lawsuit seeking class action status that was filed in Chicago federal court.

Mt Gox last month said 750,000 customer Bitcoins and 100,000 of its own were missing and were probably stolen. "The facts known to date indicate that it was caused or related to a flaw in the software algorithm that underlies bitcoin, and 'hacking' attacks of one or more persons," Mt Gox chief executive officer Mark Karpeles said in a sworn statement filed yesterday in Dallas.

The bitcoin exchange that filed for bankruptcy in Tokyo last month.

Agencies