Bitcoin giant files for bankruptcy

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Added On March 2, 2014

The once biggest bitcoin exchange Mt. Gox on Friday filed for bankruptcy protection in Japan after a sudden shutdown of all transactions early this week.
 
The exchange says it may have lost nearly half a billion dollars worth of the virtual coins due to hacking into its faulty computer system.
 
The exchange's chief Mark Karpeles told a news conference that net current liabilities of Mt. Gox total around 6.5 billion yen (63.7 million U.S. dollars).
 
It has 127,000 creditors in bankruptcy; over 1,000 of them are Japanese.
 
Karpeles says the exchange was hacked in early February.
 
And an estimated 750,000 of its users' bitcoins and 100,000 of its own have been stolen.
 
At the current bitcoin price of about 565 dollars, that would total some 480 million dollars.
 
The exchange has asked experts to carry forward procedures for filing a criminal complaint.
 
Japan has no existing laws to regulate the virtual currency.
 
Japanese Finance Minister Taro Aso said on Friday that the government will try to increase its understanding of the virtual bitcoin market as it probes the recent turmoil surrounding the Mt. Gox.
 
Many bitcoin market participants have said Mt. Gox's problems are specific to the company and are caused by what they say is a lax attitude by Karpeles.
 
While, bitcoin itself -free of any central bank control - is still a noble venture.
 
But, experts say for those who are eager to invest their money on bitcoin,they should bear in mind one simple rule - that investments always carry risks. 
 
SOUNDBITE (CHINESE): SHANG JIANGANG, IT specialist, Shanghai Bar Association
"Bitcoin doesn't have a value in use, it only has a value in exchange. It would have no value if people did not try to buy it. So there is a huge risk to bitcoin investment. Trading bitcoin is kind of like playing a game of hot potato. You never know if you'll be the one caught out when the music stops."
 
Mt. Gox is one of the world's largest bitcoin exchanges. 
 
Six other major bitcoin exchanges worldwide have released a joint statement distancing themselves from the troubled Tokyo operator.