Financial News

  • 26 February 2014, 23:07

Mt Gox Bitcoin 'Theft' Faces Legal Probes

Authorities in Japan have confimed an investigation into the alleged theft of Bitcoins from Tokyo-based exchange Mt Gox while prosecutors in the US also demand answers.

Japan's Chief Cabinet Secretary told reporters a multi-agency inquiry had begun a day after the Mt Gox websitewas taken down by the company to protect users, leaving open the possibility of huge losses for investors and prompting the Bitcoin exchange industry to defend its future.

Yoshihide Suga told reporters: "I understand that ministries and agencies concerned - financial services, police and the finance ministry - are looking into the matter to learn the full scope of the issue.

"Once we have full knowledge of what happened, we will take action if necessary," he said.

MtGox- once the biggest player in Bitcoin trading - is expected to make an announcement concerning its future in the coming days.

It froze withdrawals earlier this month, claiming there was a bug in the software that underpins Bitcoin.

It has not confirmed the reported theft but a widely-shared document purporting to be a Mt Gox "crisis strategy" said the firm might have lost more than 744,400 Bitcoins in a theft that had gone unnoticed for years.

The figure represents almost 6% of all the Bitcoins in existence worth more than $400m(240m) at prices quoted late on Tuesday.

It was also reported that in addition to the inquiry beginning in Japan, Mt Gox was served with a subpoena earlier this month by US federal prosecutors in New York.

Citing an unnamed "person familiar with the matter" the Wall Street Journal said the document demanded that Mt Gox preserve certain paperwork.

The news agency Reuters later reported that Mt Gox was not the only exchange to be served, claiming officials in Manhattan are focussed on denial of service attacks on the industry.

The legal paper was understood, Reuters said, to have requested information on when exchanges first knew of alleged cyber attacks on their operations.

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