Skip to main content
Report this ad

See also: bitcoin site displays legal notice days after declaring bankruptcy

Bitcoin was rocked by bankruptcy of
Bitcoin was rocked by bankruptcy of
Photo by Andrew Burton/Getty Images

On Wednesday, March 5, 2014, the website displayed a legal notice related to its bankruptcy, instead of the familiar price quotes and trade activity of what was once one of the world's largest online exchanges of bitcoin digital currency.

The legalese, displayed in Chinese and English, states that the notice is "a preservative order prohibiting it from paying its debts, transferring its assets or establishing security over its assets, an order establishing a comprehensive prohibition of forced attachment of its assets by its creditors and a supervisory order ordering supervision by a supervisory committee."

The real news comes next, though, as the statement declares, "As a result of our internal investigation, we found that a large amount of bitcoins had disappeared. Although the complete extent is not yet known, we found that approximately 750,000 bitcoins deposited by users and approximately 100,000 bitcoins belonging to us had disappeared."

MtGox filed for bankruptcy protection in Japan on Friday, issuing a statement that its faulty network had been hacked and its bitcoins stolen.

"We have lost bitcoins due to weaknesses in the system," said MtGox CEO Mark Karpeles said in Japanese, as reported by Business Insider. "We are really sorry for causing trouble to all the people concerned."

“The bitcoin industry is healthy and it is growing,” said Karpeles. “It will continue, and reducing the impact is the most important point."

Mt. Gox revealed its loss after weeks of silence following a halting in trades of the emerging digital currency. Reuters reported that the loss represents about seven percent of the total estimated bitcoins worldwide.

Reuters reported that some Americans have already filed lawsuits against MtGox in the US, including Gregory Greene. Estimating his bitcoin stash to be worth $25,000, Greene filed his lawsuit in the U.S. District Court in Chicago late Thursday. His suit said that MtGox failed "to provide its users with the level of security protection for which they paid.”

Fortress Investment Group lost substantial funds investing in bitcoin. It is the first large investment group to reveal its bitcoin losses. The company said it incurred $3.7 million in unrealized losses in 2013 from investing in bitcoin.

Report this ad