mt.gox

UPDATED: Mt.Gox Files For Bankruptcy Protection, Says 850,000 Bitcoin Lost

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Mt.Gox has filed for bankruptcy protection and has outstanding debt of about $63.6 million, a lawyer for the Bitcoin exchange said today during a press conference at the Tokyo District Court, reports the WSJ.

The company also disclosed that it had lost 850,000 units of Bitcoin, including 750,000 belonging to customers. That amount is worth about $477 million, based on current exchange rates.

Founder Mark Karpeles later appeared and apologized with a bow, saying in Japanese that the Bitcoin was lost “due to weaknesses in the system.”

Mt.Gox paused Bitcoin withdrawals in early February. At that time, it said the suspension was due to technical issues and only temporary. News quickly emerged, however, that Mt.Gox is facing much more serious problems.

The collapse of the world’s largest Bitcoin exchange caused investor confidence to waver and the digital currency’s value quickly plummeted, though it has started to recover. Many Mt.Gox investors are still having trouble recovering their money, however, and the longterm impact of its downfall on the Bitcoin industry remains to be seen.

Illustration by Bryce Durbin

Featured Image: Bryce Durbin