Bitcoin exchange Mt. Gox was in the red six months before bankruptcy

Bitcoin exchange Mt. Gox was in the red six months before bankruptcy

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Mark Karpeles, Chief Executive Officer of Tokyo-based bitcoin exchange Mt. Gox, attending a news conference in Tokyo, Japan. EFE/File

Tokyo, Aug 4 (EFE).- Bitcoin exchange Mt. Gox was in debt six months before it filed for bankruptcy after reporting the disappearance of its units due to cyber attacks, Japanese investigators said Tuesday.

The Tokyo-based company that went to become the world’s largest bitcoin exchange, ran out of money in early August 2013 and began paying clients with money from other “virtual wallets,” reported the Kyodo news agency citing investigators.

On Saturday, Japanese authorities arrested Mt. Gox founder Mark Karpeles on suspicions of accessing the exchange’s computer system and inflating his account, practices that could be linked to the company’s multi-million-dollar bankruptcy.

The officials believe Karpeles diverted funds worth $8.9 million to firms in his name, charges he has denied until now.

The company filed for bankruptcy in February 2014 after reporting the disappearance of some 850,000 units of Bitcoins valued at $387 million at the time.

Of these, 650,000 units, each of which would fetch $282 presently, and currency worth some $22.5 million are yet to show up.

Mt. Gox’s collapse has shaken consumer confidence in virtual currencies and revived the debate around how to regulate them.

Originally appeared at: http://www.laprensasa.com/309_america-in-english/3261085_bitcoin-exchange-mt-gox-was-in-the-red-six-months-before-bankruptcy.html

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