Stung bitcoin investors plan Mt. Gox resurrection

Bitcoin and money

Investors from the U.S. and Canada have dropped a lawsuit against embattled bitcoin exchange Mt. Gox and have instead agreed to back a plan to buy the company in the hope of clawing back their losses.

Under the agreement, which was announced late on Monday evening, these investors will join forces with a consortium called Sunlot Holdings and would settle two class-action lawsuits for fraud and other charges brought against the Tokyo exchange.

Sunlot, which is backed by child-actor turned entrepreneur Brock Pierce and William Quigley, the managing director at California-based Clearstone Venture Partners, aims to resurrect Mt.Gox and, if successful, would immediately distribute its assets on a proportional basis to the 127,000 affected customers.

Read More Mt. Gox revamp rejected, goes into administration

The estimated 50,000 customers - who have over $200 million in losses, according to Sunlot - would also receive a 16.5 percent interest in Sunlot, allowing them to share in company dividends, as well as benefit from any future buyout or IPO (initial purchase offering).

"The fund would conduct forensic investigations and pursue prosecution of perpetrators. An incentive bounty of 10 percent of recovered assets would reward those participating in the recovery," Sunlot said in Monday's press release.

The Tokyo-based exchange - which once claimed it handled around 80 percent of all global dollar trades for bitcoin - was an online marketplace where people could buy or sell bitcoins using different currencies. Rather than filing for bankruptcy in late February, the company opted for a Chapter 11-style civil rehabilitation that gave the company time to reorganize its affairs with lawyers treating it as an ongoing concern.

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At the time, it detailed outstanding debts of about 6.5 billion Japanese yen ($63.6 million), 850,000 lost bitcoins and 127,000 empty-handed customers. It blamed the bitcoins' disappearance on a bug in the cryptocurrency's framework called "transaction malleability," meaning bitcoins may have been illicitly moved by hackers out of their accounts.

On April 16, Mt. Gox had its plans to rebuild the company rejected by a Tokyo court and was placed into administration. Meanwhile, 200,000 of the lost bitcoins had been recovered since the original bankruptcy filing.

Read More A user just filed the first lawsuit against Mt.Gox

"This is the customers' best option and the only chance they have for full restitution," said Jay Edelson of U.S.-based law firm Edelson PC, in Monday's press release. "Liquidation, on the other hand, would be a disaster for customers, making them endure a long wait only to recover an immaterial percentage of their losses. The customers want and deserve a real opportunity to be made whole, and we are hopeful that their wishes are respected."

Two defendants from the Tokyo-based exchange, founder Jed McCaleb and former marketing chief Gonzague Gay-Bouchery, have agreed to the terms of the settlement, according to Sunlot.

The settlement will be presented in a federal court in Chicago on May 1 for preliminary approval, but the sale would have to be approved by a Tokyo court. Sunlot stated that class action suits in both the United States and Canada would continue against CEO Mark Karpeles and Mt. Gox's parent company Tibanne, with the aim of seeking additional recovery for customers.

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