According to a report by Bloomberg, shuttered virtual money exchange Mt Gox has filed for bankruptcy in Japan today.
In its statement today, Mt Gox said in its filing with the Tokyo District Court, that the company's debt exceeded its assets by JPY2.7 billion, which is massive compared to its JPY135 million or $1.33 million in revenue in the year ended March. It also claimed that the company lost 750,000 Bitcoins of its users and 100,000 of its own Bitcoins presumably from the hacking that happened in the days after the discovery of the theft on February 24. Bloomberg said the company is JPY6.5 billion in debt.
Bloomberg said that shutdown of Bitcoin came after weeks of turmoil amid reports that hackers had stolen $473 million in Bitcoins from the virtual money exchange. The value of the Bitcoin is based on current trading prices reflected on the CoinDesk Bitcoin Price Index. The company then decided to stop withdrawals on February 7, prompting concern from its investors.
Mt Gox Chief Executive Officer Mark Karpeles was quoted from his broadcast remarks on NHK today that the company's weak computer systems were to blame for the theft.
As Mt Gox is regarded as among the top exchanges for virtual currencies, Bitcoin-based businesses and its industry group were quick to defend the virtual currency, assuring investors that their funds are safe in their hands.
The growing concern about the stability of the Bitcoin was certainly amplified with the Mt Gox scandal, and the fact that the virtual money is not regulated. Since its introduction to the world by a programmer or a programming entity named Satoshi Nakamoto, a public ledger serves as a verification tool of all Bitcoin transactions, Bloomberg said.
Russia and China so far has been outspoken about the use of Bitcoins, and banned the use of the virtual currency in their jurisdictions. The US so far has been struggling to set up regulation for Bitcoin trading.
