Mt. Gox files for bankruptcy, lost its own and customers' bitcoins

After days of speculation surrounding the future of the bitcoin exchange, Mt. Gox filed for bankruptcy Friday with an outstanding debt of about $63.6 million.
By Ananth Baliga  |  Feb. 28, 2014 at 11:44 AM
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TOKYO, Feb. 28 (UPI) -- The worlds largest bitcoin exchange Mt. Gox filed for bankruptcy Friday and admitted to losing 100,000 of its own and 750,000 of its customers' bitcoins.

At current market prices, this loss would amount to $473 million. Mt. Gox's lawyer said they filed for bankruptcy protection at the Tokyo District Court and that the company has a debt of about $63.6 million.

Mt. Gox, which at one time handled nearly 80 percent of all bitcoin transactions, stopped bitcoin withdrawals early February, citing a technical glitch, and then suddenly took down the website on Tuesday. While rumors circulated about the future of the company, many investors were worried if they would ever see their bitcoins, with some having hundreds of thousands of dollars in the exchange.

Prior to today's announcement, the exchange had two messages on their website, one from the CEO Karpeles saying that he was in Tokyo and trying to find a solution for the company's woes. People close to Mt. Gox have said that apart from the technical issues, slow transfers by banks and government requests are also reasons for this fiasco.

Federal prosecutors in Manhattan have subpoenaed Mt. Gox, asking it to preserve documents, though the only way prosecutors can claim jurisdiction is if employees sent emails or the transfers went through Manhattan.


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