Tokyo-based bitcoin exchange Mt Gox files for bankruptcy

[NewWorldRecord]

Tokyo-based bitcoin exchange Mt Gox files for bankruptcy

PUBLISHED : Friday, 28 February, 2014, 7:04pm
UPDATED : Friday, 28 February, 2014, 7:22pm

Danny Lee [email protected]

Mt Gox chief executive Mark Karpeles looks resigned as he appears in front of the cameras in Tokyo. Photo: Reuters

Bitcoin exchange Mt Gox has filed for bankruptcy, ending days of speculation about the Tokyo-based company’s dire financial health.

At a press conference at Tokyo District Court on Friday afternoon, the company announced it had applied for bankruptcy protection saddled with 6.5 billion yen (US$64 million) in debt.

Embattled chief executive Mark Karpeles’s face looked resigned as he appeared in front of the cameras.

The insolvency application deals a hammer blow to bitcoin, which has been seeking to become an alternative to real-world cash.

Once a major mover and shaker in the virtual currency world, the company has been in trouble since early February when it suspended bitcoin withdrawals. It subsequently admitted that weak security controls had contributed to a massive fraud.

However, a picture of the extent of the company's losses began to emerge on Tuesday, after a leaked company document pointed to a huge loss in customer’s bitcoins.

According to bankruptcy research firm Teikoku Databank, Mt Gox lost 750,000 bitcoins belonging to customers and its own 100,000 holding, together worth US$476 million at current market prices.