updated 01:48 am EDT, Fri March 21, 2014
Discovery casts doubts on loss claims, accounting standards
The recently-shuttered and allegedly bankrupted Mt. Gox Bitcoin exchange has now said it has "found" nearly a quarter of the total "stolen" Bitcoins stored in a "wallet" -- the term for a digital file used to store the virtual currency -- that the company was no longer using. The 200,000 coins found represent some $115 million of the $470 million (in current trade value) lost by customers when the exchange closed down.
Because Bitcoins aren't seen as a legitimate currency and aren't backed up with anything, no regulators in Japan or elsewhere were overseeing it, nor were deposits covered by insurance as real currency deposits are. While the CEO of the exchange initially blamed hackers, citing a flaw that allowed transactions to essentially be double-billed, the new discovery raises questions about how much of a role sloppy accounting has actually played in the debacle.
The company never said that all of the money had been taken by hackers, and has since said it is "still investigating" the causes and number of missing Bitcoins. Some customers believe they have evidence that the "missing" Bitcoins are actually still in the exchange's control. Other Bitcoin exchanges have also closed, with some traders under investigation for money laundering -- but the currency remains in circulation through alternative exchanges. Mt. Gox officials now believe around 650,000 Bitcoins are still missing, down from 850,000, but cautioned that the numbers could continue to change.
The website for Mt. Gox now offers former users an opportunity to check their former balances, however it does not assure users that the currency is actually there or can be returned to them. The company filed for court protection through bankruptcy procedures in Japan on February 28, and for insolvency in the US shortly afterwards.