Bitcoin Exchange Mt. Gox Goes Bankrupt

 @natrudy
on February 28 2014 8:07 AM
MtGox Protest
Two protesters stand outside the offices of MtGox in Japan. Courtesy Kolin Burges

Tokyo-based MtGox, once the world's biggest exchange for bitcoin, filed for bankruptcy on Friday, blaming hackers and weakness in its own technology systems for losses of nearly half a billion dollars.

MtGox CEO Mark Karpeles apologized at a news conference at Tokyo District Court, where the company filed for bankruptcy protection, reports Reuters. 

In total, the exchange lost 750,000 bitcoins owned by its users and 100,000 of its own bitcoins. That represents losses of $480 million at current bitcoin prices, or 7 percent of the estimated total of bitcoins in circulation. 

MtGox's bank account balances also showed discrepancies, though a lawyer for MtGox declined to elaborate on the problems there.

The MtGox exchange had liabilities of 6.5 billion yen ($63.7 million), which overshadowed its 3.84 billion yen in assets. Though it had 127,000 creditors as it became bankrupt, more than 1,000 of those are Japanese.

In 2012, the MtGox exchange saw average trading volumes of more than 100,000 bitcoins daily, making it by far the largest exchange, according to the Wall Street Journal. By 2014, that shrunk to 22,900 daily. Other major bitcoin exchanges include BTC-e and Bitstamp.

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