The collapse caps a tumultuous few weeks in which the company has
remained virtually silent after halting trades of the
crypto-currency, shaking the nascent but burgeoning bitcoin
Wearing a suit instead of his customary T-shirt, Mt. Gox's French
CEO Mark Karpeles bowed in contrition and apologized in Japanese at
a news conference at the Tokyo District Court, blaming his firm's
collapse on a "weakness in our system", but predicting that bitcoin
would continue to grow.
"First of all, I'm very sorry," he said. "The bitcoin industry is
healthy and it is growing. It will continue, and reducing the impact
is the most important point."
Angry investors have been seeking answers for what happened to their
holdings of cash and bitcoins on the unregulated Tokyo-based
Mt. Gox said the exchange, used overwhelmingly by foreigners, had
lost 750,000 of its users' bitcoins and 100,000 of its own. At the
current bitcoin price of about $565, that would total some $480
million - representing about 7 percent of the estimated global total
It also said there was a discrepancy of 2.8 billion yen ($27.4
million) in its bank accounts when it checked on Monday. Junko
Suetomi, a lawyer with Baker & MacKenzie, said she could not comment
on the balances of foreign bank accounts held by the company.
PROBLEM WITH EXCHANGE, NOT BITCOIN
Many bitcoin market participants have said Mt. Gox's problems were
specific to the company and were caused by what they said was a lax
attitude by Karpeles, while bitcoin itself - free of any central
bank control - was still a noble venture.
"If we could agree on legal regulation, we should let (bitcoin and
regulators) co-exist," said Keiichi Hida, a bitcoin investor and
member of the Japan Digital Money Association. He lost about 100,000
yen worth of bitcoins, but seemed unconcerned as he became
interested in the virtual currency as a form of "study".
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"We should make it a national project to have bitcoin used
nationwide at the time of the 2020 Tokyo Olympics," he said.
Mt. Gox deleted its website on Tuesday after freezing withdrawals
earlier this month in the wake of a series of technical
The exchange had liabilities of 6.5 billion yen ($63.67 million),
dwarfing its total assets of 3.84 billion yen, the company said. It
had 127,000 creditors in bankruptcy, just over 1,000 of whom are
The company and Karpeles have said little in the days before
Friday's court filing, which is similar to Chapter 11 bankruptcy in
the United States, except that they were working with others to
resolve their problems.
Another lawyer, Akio Shinomiya at Yodoyabashi and Yamagami, said Mt.
Gox wanted to file a criminal complaint against what he said was a
hacking attack, but had no specific means of doing so.
"Bitcoin has always been volatile and speculative, said bitcoin user
Ken Shishido, who had about a tenth of his bitcoin holdings at Mt.
Gox, but has seen the rest of his bitcoins soar tenfold since he
began trading 18 months ago.
"It's too bad that this happened, but we have to let it go. And then
we'll buy more."
($1 = 102.0850 Japanese yen)
(Additional reporting by Nathan Layne and Emi Emoto; Writing by
William Mallard; Editing by Ian Geoghegan)
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