Following Mt.Gox failure of defending itself against hacking, the official website of one of the world's biggest bitcoin exchange has gone offline.

Following Mt.Gox failure of defending itself against hacking, the official website of one of the world's biggest bitcoin exchange has gone offline. As of today, MtGox has filed for bankruptcy on Friday (28/2) and  the only content in its site is an announcement by Mt.Gox chief Mark Karpeles.

Mark

 

We Are Bankrupt

In the announcement, Karpeles stated that Tokyo District Court has accepted Mt.Gox's application for civil rehabilitation procedure. Or, in western court language, Mt.Gox is in bankruptcy proceedings. Consequently, the court prohibits Mt.Gox from paying its debts and transferring or securing its assets, as well as establishes a supervisory committee on Mt.Gox. Which means, no one, be it Karpeles himself or the hundred thousands creditors whose bitcoin lost in the Shibuya-based exchange, can withdraw any money. Not that it changes anything, as Mt.Gox's current liabilities are twice of its assets (6,501,119,371 yen vs 3,841,866,163 yen). The reason is, loss of bitcoins and customer's funds. Karpeles claimed that 850,000 bitcoins has disappeared during prior dos attack.

The good news are, investigation on the sequence of events is underway and Mt.Gox has promised to fully cooperate with the authorities. For the time being, it seems they are sincerely doing all they can. A call center has also been arranged and will actively answer questions on Monday to Friday from 10am to 5pm (Japan time). Oh yeah, they also pledged, All efforts will now be made to restore the business and recover damages to repay debts to creditors, but we would prefer to wait and see on that one, shall we!?

mt.gox

 

Bitcoin Legal Position

Meanwhile, in US District Court in Chicago, a customer has launched a lawsuit against Mt.Gox on Thursday (27/2). The customer, Gregory Greene, accused Mt. Gox and Karpeles on negligence and fraud because they failed to protect their customers. Greene said that he and other investors were unable to stop losses after the security breach, as Mt.Gox has halted all transactions at the time. Currently, Mt.Gox's response on the lawsuit is unclear, but as approximately 99% of its clients based outside Japan, we could foresee lawsuit worth millions from overseas jurisdictions.

On the other hand, there may be some silver lines the bitcoin communities could draw from this disaster. Regulators has started to change their views in regard of bitcoins legal position. Japan, previously uninterested in any talks on the cryptocurrency, now suggest the necessity of inter-governmental regulation on bitcoins. Reuters quoted Japanese vice minister of finance, Jiro Aichi (27/2), said that any regulation of the bitcoin crypto-currency should involve international cooperation to avoid loopholes. In the US, The Fed's Chairperson Janet Yellen, also suggested to the Congress to consider ways to regulate virtual currencies.