Message #47942

[Mark]

Mt. Gox Exchange Files for Bankruptcy

Mt. Gox, once the world’s largest Bitcoin exchange, filed for bankruptcy in Japan, focusing attention on the digital currency’s risks.

The company, which had revenue of 135 million yen ($1.33 million) in the year ended March, applied in Tokyo District Court today with debt exceeding its assets by 2.7 billion yen, Mt. Gox said in a statement. The exchange discovered on Feb. 24 that it had lost 750,000 Bitcoins belonging to users and 100,000 of its own, it said.

The collapse follows weeks of turmoil amid reports that hackers had pilfered the missing $473 million in Bitcoin from Mt. Gox, leading the company to halt withdrawals on Feb. 7. The regulation of Bitcoin, let alone derivatives of it, is an unresolved question in many parts of the world.

Mt. Gox Chief Executive Officer Mark Karpeles said his company lost Bitcoins because its computer systems were weak, according to remarks broadcast on NHK today. The firm had 6.5 billion yen in debt.

Companies from San Francisco to London as well as the virtual currency’s industry group, the Bitcoin Foundation, have been seeking to assure Bitcoin users that their funds won’t disappear due to theft or mismanagement.

The digital currency was introduced in 2008 by a programmer or group of programmers under the name Satoshi Nakamoto and has since gained traction with merchants around the world. Bitcoin has no central issuing authority, and uses a public ledger to verify transactions while preserving users’ anonymity.

rest: http://www.bloomberg.com/news/2014-02-28/mt-gox-exchange-files-for-bankruptcy.html