MtGox Files for Bankruptcy Protection, 850,000 Bitcoins Lost

MtGox Files for Bankruptcy

MtGox has revealed that it was going to file for bankruptcy protection. About 750,000 of its customers’ bitcoins and 100,000 of its own have been lost. The market value of this damage is tremendous. It totals to about $473 million in losses. This news comes as a major revelation in the enfolding drama of this bitcoin exchange.

MtGox have a remaining debt of about $63.6 million disclosed the exchange’s lawyer at a news conference at the Tokyo District Court.

Brewing Trouble

Mt. Gox’s troubles began with the suspension of bitcoin withdrawals at the beginning of February. The exchange stated that due to an unresolved technical issue, it had to take this action. After this, the exchange’s trouble kept accumulating without much being resolved. When the technical issue remained unresolved, the bitcoin protocol was blamed by MtGox for its troubles.

On Tuesday, MtGox halted all transactions through its website and the website later became unavailable. This has been one of the biggest blows to the bitcoin value and the price of the digital currency plunged as a result of it. With these terrible actions on the part of MtGox, concerns of security and protections have been raised by its own customers and the bitcoin community as a whole.

Many people close to MtGox have mentioned that the exchange had more than just a technical issue to deal with in regards to meeting their customers’ withdrawal transactions. One of the issues brought forth was is that the banks took up a lot of time to transfer money. Furthermore, some individuals stated that government requests played a role in making it more difficult to process transactions. The real truth is yet to be known and many questions are still left unanswered.

Investors Have Little Hope

Many investors of MtGox have said that they have very little hope or expectation of a possible recovery of their funds. Some people even had hundreds of thousands of dollars worth of bitcoin invested in the exchange that they might never see again.

Some Individuals who had invested in MtGox from places such as the United Kingdom and Australia, had traveled from their respective homelands to the headquarter of the exchange to voice their complaints. Regardless, this did not amount to much and not much was revealed at the time by the MtGox CEO, Mark Karpeles.

Failing Announcements

Two announcements were posted on the MtGox website this week. The first announcement posted on Tuesday stated,

“a decision was taken to close all transactions for the time being in order to protect the site and our users.”

Apparently, its own customers were not really protected in this entire fiasco.

The second announcement posted on Wednesday by Karpeles himself stated that he was “working very hard with the support of different parties to find a solution to our recent issues.” Again, it seems that Karpeles did not pull through to have the problems of his exchange fixed.

On its website, MtGox has stated that it had accounts for customer settlement at Mizuho Bank and Japan Net Bank. It was confirmed by a spokesperson of Mizuho Bank that this was true but they could not reveal anything beyond this. In the case of the latter bank, it is not confirmed.

Blurry Future

Jonathan Waller, a game developer, who had about 211 bitcoin in MtGox, says

“It is disappointing they hid so much for so long. I hope they manage to become a fully functioning exchange again, but their reputation is so damaged it may not be possible”.

At this point, from the apparent, everything seems to be crumbling from within and around MtGox. Hopefully, the coming days will let us all know what truly becomes of the exchange or what became of the ‘lost bitcoins’ by the exchange.

Stay tuned to Coinreport as we follow this development