SBC News Voice of the Sports Betting Industry
Mt Gox, a major Bitcoin currency exchange, has declared itself bankrupt in a Tokyo district court hearing this Friday 28 February. A company lawyer cited outstanding debts of $63.2 million against company assets valued at $37.7 million.
The Bitcoin trader had suffered a security breach (hack) that resulted in the crypto currency being stolen from its platform and customer savings system. Mark Karpeles, the chief executive of the now defunct exchange, resigned Mt Gox from the board of the Bitcoin Foundation ‘effective immediately’. Karpeles has issued a statement urging for a inquiry into the System failure and potential Bitcoin fraud
Further information issued by Mt Gox lawyers, revealed that the exchange had lost three quarters of a million Bitcoin’s belonging to trading customers, along with a further 100,000 of its own Bitcoin reserve. At current Bitcoin value this represents a loss of $473 million.
On Monday 24 February the website on Mt Gox unexpectedly went down, causing the virtual currency to fall around $470 from its prvious $550 mark. A leaked document revealed that a security breach had resulted in the theft of three-quarters of a million of Mt.Gox traded Bitcoins – which represented approximately 6% of the available currency.
The news of a breach on a popular Bitcoin trader has caused fear among industry commentators regarding the lack of trader/customer protection and the lack of regulations governing the currency. Bloomberg news reports that at one time more than 80% of Bitcoin trades were handled by the exchange.
Speaking to the Wall Street Journal Federal Reserve Chief Janet Yellen commented that the central bank does not have the authority to regulate the digital currency.
“Bitcoin is a payment innovation that’s taking place outside the banking industry. To the best of my knowledge there’s no intersection at all, in any way, between Bitcoin and banks that the Federal Reserve has the ability to supervise and regulate. So the Fed doesn’t have authority to supervise or regulate Bitcoin in anyway.”
