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Bitcoin exchange Mt. Gox files for bankruptcy protection

Feb. 28, 2014 at 7:51 AM   |   Comments

TOKYO, Feb. 28 (UPI) -- The Bitcoin exchange in Tokyo, Mt. Gox, said it was filing for bankruptcy three days after declaring it would temporarily close down transactions.

The exchange that handled 80 percent of bitcoin transactions at one point said it had $63.6 million in outstanding debt and that three quarters of a million bitcoin belonging to customers and 100,000 of its own had been lost, the Wall Street Journal reported.

Various individuals have surfaced who say they have lost money, some of them having invested hundreds of thousands in the virtual currency, the Journal said.

The exchange represents a large enough share of the bitcoin industry to rattle the currency to its core. It shut down trades on Tuesday to protect itself and its customers, the company said. It had been revealed earlier that 744,000 bitcoin had been fraudulently withdrawn from the exchange, a sum that is roughly 6 percent of all bitcoin in circulation.

Federal prosecutors have issued Mt. Gox subpoenas requesting that it not destroy various documents, a source close to the matter told the Journal.

"It is disappointing they hid so much for so long. I hope they manage to become a fully-functioning exchange again, but their reputation is so damaged it may not be possible," Jonathan Waller, a 30-year-old game developer, told the Journal.

Waller said he had 211 bitcoin tied to Mt. Gox, which is worth about $118,000.

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