MtGox has applied for bankruptcy protection in Japan, telling a Tokyo District Court that it has outstanding debt of about $63.6 million, with assets worth a little more than half that amount.
According to The New York Times, the French-born CEO Mark Karpeles then appeared at a press conference and “bowed in contrition and apologized in Japanese.”
“I’m truly sorry to have caused inconvenience,” he said.
Citing an unnamed company lawyer who also spoke at the press conference, The Wall Street Journal reported that MtGox had lost 750,000 bitcoins (around $412.5 million) belonging to customers, and over 100,000 bitcoins (around $55 million) of its own money.A few hours later, Karpeles told Ars that he “cannot comment much for now,” and that “We will be updating mtgox.com soon with more details.”
MtGox, which was once the world’s largest Bitcoin exchange, suddenly shut down four days ago after weeks of sustained DDoS attacks and “transaction malleability” problems, which led the company to halt withdrawals entirely.
As far as the purported internal documents that have been released this week, Karpeles also told Ars, “I cannot comment on documents not issued by us,” but he did not deny their authenticity.
The Times noted that MtGox’s filing 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 from several months to several years.”
Karpeles concurred with this assessment, telling Ars: “It’s not just any bankruptcy, in the US it would be closer to what is known as Chapter 11 bankruptcy.”
In an odd twist, according to Reuters, “Karpeles told the news conference that Mt. Gox wanted to file a criminal complaint against what he said was a hacking attack, but had no specific means of doing so.”
Tsutomu Okubo, now a member of the Japanese parliament and a former banker at Morgan Stanley, told Ars that he had begun discussing new bitcoin-related regulation with the Financial Services Agency, the Ministry of Finance, and the Bank of Japan a year ago.
"However, their response is that Bitcoin is neither currency nor regulated settlement in Japan," he said by e-mail. "Regarding exchanges like MtGox there is no regulation now."
He added that he had just sent a letter to Prime Minister Shinzo Abe asking for clarification on Bitcoin-related rules.
"I think we should consider to protect clients from Ponzi scheme-type of transactions and regulate money laundering transactions," Okubo added. "So I am working with the Financial Services Agency and the Ministry of Finance. [Concerning] domestic investigation, the National Police Agency could investigate if victims of MtGox claim their losses to [that agency]. I don't know if they have started [such] investigations."
reader comments
169