Tokyo bitcoin exchange files for bankruptcy – virtual currency goes up in smoke

February 2014 TOKYO – The Mt. Gox bitcoin exchange in Tokyo filed for bankruptcy protection Friday and its chief executive said 850,000 bitcoins, worth several hundred million dollars, are unaccounted for.  The exchange’s CEO Mark Karpeles appeared before Japanese TV news cameras, bowing deeply for several minutes. He said a weakness in the exchange’s systems was behind a massive loss of the virtual currency involving 750,000 bitcoins from users and 100,000 of the company’s own bitcoins. That would amount to about $425 million at recent prices. The online exchange’s unplugging earlier this week and accusations it had 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. “I am sorry for the troubles I have caused all the people,” Karpeles said in Japanese at a Tokyo court. Kyodo News said debts at Mt. Gox totaled more than 6.5 billion yen ($65 million), surpassing its assets. NHK said Mt. Gox Karpeles had not made a public appearance since troubles surfaced last month. He had earlier said in a web post that he was working to resolve the problems.  The loss is a giant setback to the currency’s image because its boosters have promoted bitcoin’s cryptography as protecting it from counterfeiting and theft.  Bitcoin proponents say Mt. Gox is an isolated case, caused by the company’s technological failures, and the potential of virtual currencies remains great. Just hours before the bankruptcy filing, Japanese Finance Minister Taro Aso had scoffed that a collapse was only inevitable. “No one recognizes them as a real currency,”’ he told reporters. “I expected such a thing to collapse.” Japan’s financial regulators have been reluctant to intervene in the Mt. Gox situation, saying they don’t have jurisdiction  over something that’s not a real currency. They pointed to the Consumer Affairs Agency, which deals with product safety, as one possible place where disgruntled users may go for help. The agency’s minister Masako Mori urged extreme caution about using or investing in bitcoins. The agency has been deluged with calls about bitcoins since earlier this year. “We’re at a loss for how to help them,” said Yuko Otsuki, who works in the agency’s counseling department.” –Economic Times
This entry was posted in Banking Crisis, Bankruptcy, Boom and Bust Cycles, Civil Unrest, Depression and Anxiety, Economic Collapse, Fiat Money Printing Fiasco, Financial market turmoil, Greed and Corruption, Hierarchal Control, Squandered Resources, Struggle for Survival, The Pyramid Model, Unsustainable Debt Burden. Bookmark the permalink.

2 Responses to Tokyo bitcoin exchange files for bankruptcy – virtual currency goes up in smoke

  1. niebo says:

    You know, Dudes, like, I know it’s different and stuff but it ain’t so much when you analogize it; I know from doing it that I can count all my digits (fingers and toes) over and over and over and even though I sometimes get nineteen and sometimes I get twenty-two, at the end of it all, all I have is my digits, just fingers and toes. SO . . . how many times do you have to count (or program) the bits, bytes, kilobytes, or mega-bytes (1s and 0s, over and over and OVER and OVER times a bazillion) like they’re talking about before you actually, like, manifest (or program) a coin? You get me? I mean, like, how many 1s and 0s do you type in that computator before it spits out, or ink-squirts, or even 3d prints, a piece of gold? Or silver? A nickel? O wooden nickel? Even a penny? Call me stoopid, but i think maybe, in the end, you get what you started with: digits, just some virtual numbers, nothin’ real. Even when you have to transfer digital “assets” to get started, it can all just dis-disa-vanish. You know?

  2. LA says:

    Mt. Gox was a BANK. An EXCHANGE. Mt. Gox is NOT Bitcoin itself. Would you stop using US dollars because a US bank got robbed? Or a rather small bank in some country went bankrupt? I doubt it. Bitcoin is safe, but those banks or exchanges with unsound practices, like any bank with unsound practices, is vulnerable to bank runs, theft and any other kind of corruption.

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