Mt. Gox exchange blames hackers for huge bitcoin losses, files for bankruptcy

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Mt. Gox exchange blames hackers for huge bitcoin losses, files for bankruptcy

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Bad news for some bitcoin holders. Mt. Gox, once the world’s biggest exchange for the virtual currency, says it has “lost” around 350 million euros worth of them.

Mt. Gox Chief Executive Mark Karpeles blamed the loss on hacking into its faulty computer system.

He spoke as the exchange filed for bankruptcy protection from its creditors in Japan.

Wearing a suit instead of his customary T-shirt, Karpeles bowed in contrition and apologised 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 exchange, which froze withdrawals early in February and deleted its website on Tuesday 25th February.

Mt. Gox said the exchange, used overwhelmingly by foreigners, had lost 750,000 of its users’ bitcoins and 100,000 of its own.

That represents about seven percent of the estimated global total of bitcoins.

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 – is still viable.

Bitcoin is a digital currency that, unlike conventional money, is bought and sold on a peer-to-peer network independent of central control. Its value has soared in the last year, and the total worth of bitcoins minted is now about $7 billion (five billion euros).