Mark Karpeles, second from left, attended
a news conference after his company, Mt. Gox, filed for
bankruptcy.
TOKYO — Mt. Gox, the troubled
exchange for the virtual currency Bitcoin, filed for bankruptcy
protection on Friday and said that it might have lost 750,000 of
its customers’ coins, essentially all of them, in a hacking
attack.
The Tokyo-based exchange, which
warned this month of a software flaw that may have allowed
hackers to defraud it of Bitcoins, had halted all trading this
week.
Mark Karpeles, the company’s chief
executive, wearing a suit instead of his usual T-shirt, bowed in
contrition and apologized in Japanese at a press conference in
Tokyo.
“There were weaknesses in the
system,” he said. “I’m truly sorry to have caused
inconvenience.”
He said that the exchange had most
likely lost 750,000 of its customers’ Bitcoin holdings and more
than 100,000 of its own coins, or more than $450 million worth.
Mt. Gox had said on its website on
Wednesday that it was still “working very hard” toward a
resolution.
Investors in the exchange had said
they did not expect to recover their money stashed on the Mt.
Gox platform, which once accounted for four-fifths of the
world’s Bitcoin trading.
But Mt. Gox’s bankruptcy, filed with
the Tokyo District Court under Japan’s Civil Rehabilitation Law,
which is similar to Chapter 11 in the United States, will mean
that a bankruptcy supervisor is set to develop a restructuring
plan, and will also be responsible for handling any payment of
claim distributions to its creditors. That process could take
form several months to several years.
The exchange has liabilities of 6.5
billion yen, or $64 million, compared with total assets of 3.84
billion yen, the company said. It has 127,000 creditors.
The demise of Mt. Gox did not come as
a surprise for many — and has fanned skepticism in some quarters
over the virtual currency’s future in Japan.
“I didn’t think something like this
would last for long. I thought it would collapse at some point,”
Taro Aso, the Japanese finance minister, told reporters earlier
Friday, according to the Nikkei website.
He also suggested that Japan might
move to regulate Bitcoin.
“Not everybody accepts it as a
legitimate currency. And it’s unclear who should supervise it,”
Mr. Aso said. “Japan must do something about it.”
Many Bitcoin advocates, however, have
put Mt. Gox’s woes down to managerial and security incompetence
and say that the technology underlying Bitcoins remains sound.
“It’s a simple case of gross
mismanagement and neglect. But we’re seeing a lot of stronger
Bitcoin companies now with better systems and proper staff,”
said James MacWhyte, an early Bitcoin adopter and occasional Mt.
Gox customer who is working to set up an association of Bitcoin
users in Japan.
“Competition is great. Mt. Gox had no
competition for a long time, and that’s how it got to where it
got,” he said this week. “Now it’s time to raise the standard.”
©
2014
The New York Times Company