Financial News

  • 3 March 2014, 11:25

Mt Gox Bitcoin Exchange Files For Bankruptcy

One of the world's largest bitcoin exchanges has filed for bankruptcy protection as it admitted hackers may have stolen all of its digital currency.

Mt Gox has revealed 850,000 bitcoins worth about $480m (£286m) are unaccounted for following cyber attacks and said it has 127,000 creditors.

Chief executive Mark Karpeles blamed a weakness in the exchange's computer system for the massive loss, which included 750,000 users' bitcoins and 100,000 of its own.

Debts at the company of £38m dwarf its total assets of £22.5m.

Mr Karpeles gave a grovelling apology in Japanese for the company's collapse, bowing in contrition and wearing a suit instead of his customary T-shirt at a news conference.

"I am sorry for the troubles I have caused all the people," he said.

However, he predicted the currency would continue to grow, claiming the industry is "healthy".

Angry investors are demanding answers over what happened to their holdings of cash and bitcoins on the Tokyo-based exchange.

The collapse of the company has shaken the virtual currency world and heaped renewed regulatory attention on the bitcoin.

Created in 2009 as a way to make transactions across borders without third parties such as banks, supporters previously claimed security encryption made the currency immune to theft or counterfeiting.

Mt Gox took down its website on Tuesday after freezing withdrawals earlier this month in the wake of a series of technical difficulties.

Mr Karpeles said the company wanted to file a criminal complaint against what he said was a hacking attack but had no actual means of doing so.

It came as the Japanese finance minister said the collapse of the virtual currency was inevitable and Vietnam banned its use overnight.

Despite the problems facing the currency, the world's first bitcoin retail store has opened in Hong Kong.

However, Ken Lo, the CEO of ANXBTC, the exchange behind the store, said he believes an actual store will help break down some of the barriers to people adopting the virtual currency.

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