Mt. Gox Bitcoin exchange files for bankruptcy
- Mt. Gox CEO says system failures to blame
- Mt. Gox has filed for bankruptcy protection
- Japan FM says Bitcoins not recognized as real currency
Embattled Bitcoin exchange Mt. Gox filed for bankruptcy protection, the Tokyo-based firm announced Friday.
The virtual currency firm's CEO, Mark Karpeles, seemed to suggest a hacking attack into the exchange's systems was behind the massive loss of the virtual currency. He was speaking in a court in Tokyo.
The loss involved 750,000 bitcoins from users and 100,000 of the company's own bitcoins. That would amount to about $425 million at recent prices.
"I am sorry for the troubles I have caused all the people," Karpeles said in Japanese at a Tokyo court.
The unplugging earlier this week of the Tokyo-based Mt. Gox Bitcoin exchange and accusations it suffered a catastrophic theft have drawn renewed regulatory attention to a currency created in 2009 as a way to make transactions across borders without third parties such as banks.
The price of Bitcoin is down nearly 4% at $554.86.
Kyodo News said debts at Mt. Gox totaled more than 6.5 billion yen ($65 million), surpassing its assets.
Japan's finance minister scoffed at Bitcoin woes as inevitable Friday, and Vietnam banned the virtual currency.
"No one recognizes them as a real currency," Japan's Finance Minister Taro Aso told reporters in Tokyo. "I expected such a thing to collapse."
Law firm Edelson PC filed a lawsuit in a federal court in Illinois seeking class action status representing people in the U.S. who had bitcoins held by Mt. Gox.
"This is either a case of gross incompetence, a real breach of fiduciary care, or an outright fraud," Jay Edelson, managing partner of Edelson PC, said in a statement.
Edelson estimates approximately 600,000 people in the U.S. had bitcoins tied to Mt. Gox, valued at several hundred million dollars. He also says his firm is exploring similar class-action filings in other countries.
Contributing: Associated Press