Mt. Gox Goes Bankrupt, Losing Nearly 750,000 Bitcoins

The Bitcoin exchange company, Mt. Gox, has filed for bankruptcy protection but the feds are still looking into investigating its business practices

BITCOINS

The Japan-based cryptocurrency exchange filed for bankruptcy after losing $473 million in bitcoins.

The Bitcoin exchange company, Mt. Gox, has filed for bankruptcy protection in Tokyo, Japan today.

According to the Wall Street Journal, Mt. Gox and its CEO, Mark Karpelès, was handling more than 80% of all Bitcoin trades at its peak before ending all trades and taking down its website a week ago.

The exchange says it lost 750,000 of its customers bitcoins in addition to the 100,000 of its own to theft.

Mt. Gox had outstanding debt of about ¥6.5 billion ($63.6 million) with assets worth ¥3.84 billion.

“There was some weakness in the system, and the bitcoins have disappeared. I apologize for causing trouble,” Karpelès said during the news conference in Tokyo. Karpelès claimed the fraudulent withdrawals were the result of technical issues that allowed hackers to steal the bitcoins from the exchange.

This, along with improper registration as a money-services business in the US, has prompted a Federal investigation into the exchange company.

The Bitcoin community has been distancing itself from Karpelès and Mt. Gox, a former Magic: The Gathering card-trading site, since the incident began in early February, with a statement from various Bitcoin organizations declaring his actions a breach of trust given to him by the community.

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