Troubled exchange Mt. Gox confirms loss of 750,000 Bitcoins, blames a ‘bug in the Bitcoin system’

Troubled exchange Mt. Gox confirms loss of 750,000 Bitcoins, blames a ‘bug in the Bitcoin system’ ...

Troubled Bitcoin exchange Mt. Gox, once the largest of its kind, filed for bankruptcy protection last week. Today, the exchange released a statement that confirms approximately 750,000 Bitcoins deposited by users and about 100,000 Bitcoins belong to Mt. Gox had disappeared in February.

This acknowledgment comes after a document claimed to be leaked out of Mt. Gox was circulating within the Bitcoin community last week, which suggested 750,000 Bitcoins had been lost.

In an update to its financial situation published on its site, Mt. Gox notes that the discrepancy between the amount of cash held in financial institutions and the amount deposited from Mt. Gox’s users come in at about 2.8 billion yen ($27.6 million) — though the exact amount of missing deposit funds and the total amount of Bitcoins that disappeared still can’t be fully confirmed as of now.

Mt. Gox CEO Mark Karpeles says that there was a “high probability” that the Bitcoins had been stolen due to the abuse of a bug in the Bitcoin system. “At the start of February 2014, illegal access through the abuse of a bug in the Bitcoin system resulted in an increase in incomplete Bitcoin transfer transactions and we discovered that there was a possibility that Bitcoins had been illicitly moved through the abuse of this bug,” he says.

In the statement, Karpeles acknowledges the problem could have stemmed from a variety of causes including hacking by third parties. “We have asked an expert to look at the possibility of a criminal complaint and undertake proper procedures,” he says.

Mt. Gox’s sudden shutdown and subsequent filing for bankruptcy protection have dealt a heavy blow to the Bitcoin industry. Pre-empting such a response, the heads of six of the world’s biggest Bitcoin exchanges earlier penned a letter in response to reports of Mt. Gox’s impending insolvency, in a bid to reassure Bitcoin investors.

Mt. Gox says that “all efforts will now be made to restore the business and recover damages to repay debts to creditors.” As it needs to continue its business to increase repayments to its creditors, the company has opted for bankruptcy protection — or what is known as civil rehabilitation in Japan.

“Rebuilding MtGox Co., Ltd under the supervision of the court in a legally organized procedure while giving proper explanations will not be for the sole benefit of the company but for that of the whole Bitcoin community,” Karpeles says.

Statement on Mt. Gox site

Headline image via Yoshikazu Tsuno/AFP/Getty Images

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