30 March 2017
Visit EBAday.com

Mt. Gox files for bankruptcy protection; Yellen says Fed has no authority to regulate bitcoin

28 February 2014  |  5964 views  |  1 bitcoin

Mt. Gox has filed for bankruptcy protection, a lawyer for the beleaguered bitcoin exchange told a news conference today. Meanwhile, new Federal Reserve chair Janet Yellen has said that the central bank has no authority to regulate the crypto-currency.

According to the Wall Street Journal, an Mt. Gox lawyer has told reporters in Tokyo that the exchange is filing for bankruptcy protection and has around $63.6 million in outstanding debt.

The exchange has been reeling for several weeks, suspending withdrawals after it emerged that it appears to have lost nearly 750,000 bitcoins - worth hundreds of millions of dollars - to malleability-related theft.

Earlier this week the Mt. Gox Web site disappeared, replaced by a notice telling users that all transactions have now been stopped "in light of recent news reports and the potential repercussions on MtGox's operations and the market".

At a news conference in Japan today, Mt Gox CEO Mark Karpeles told reporters that it may have lost nearly half a billion dollars worth of the virtual coins, adding 100,000 of its own bitcoin stash to the 750,000 already reported as missing. The firm is also investigating a $27.4 million discrepancy in its own bank account.

Speaking about the Mt. Gox closure, Japan's vice finance minister Jiro Aichi says that the government will respond "if necessary" but that that bitcoin regulation needs to by international.

Meanwhile, US Fed chair Janet Yellen has responded to a letter from West Virginia Senator Joe Manchin about bitcoin in which he calls it "disruptive to our economy".

Says Yellen: "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."

However, she adds: "But certainly it would be appropriate for Congress to ask questions about what the right legal structure would be for digital currencies...It's not so easy to regulate bitcoin because there's no central issuer or network operator."

Comments: (1)

Neil Crammond
Neil Crammond - trader - london | 28 February, 2014, 11:40

Regulators  are supposed to provide "fair and orderly markets " . Therefore I struggle  to understand how "bitcoin " was ever allowed to trade ?            Those who have lost monies should learn and trade at established "lit " exchanges . Bitcoin can join Mr Madoff as those who temporary fooled the markets BUT were eventually caught .

 

1 thumb up! 1 thumb up! (Log in to thumb up)
Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

Researchers find more than 100 malware families targeting bitcoin

Researchers find more than 100 malware families targeting bitcoin

27 February 2014  |  6637 views  |  1 comments | 8 tweets | 3 linkedin
MT Gox goes up in smoke. Is this the end for bitcoin?

MT Gox goes up in smoke. Is this the end for bitcoin?

25 February 2014  |  7031 views  |  5 comments | 15 tweets | 10 linkedin
US state regulators investigate virtual currencies; Mt. Gox chief quits Bitcoin Foundation

US state regulators investigate virtual currencies; Mt. Gox chief quits Bitcoin Foundation

24 February 2014  |  6436 views  |  1 comments | 7 tweets | 6 linkedin
Bitcoin plunges again after dark market Web hack

Bitcoin plunges again after dark market Web hack

14 February 2014  |  6486 views  |  7 comments | 10 tweets | 7 linkedin
Bitcoin bug causes massive sell-off

Bitcoin bug causes massive sell-off

10 February 2014  |  12800 views  |  7 comments | 23 tweets | 16 linkedin
New York gears up for virtual currency 'BitLicenses'

New York gears up for virtual currency 'BitLicenses'

31 January 2014  |  6401 views  |  0 comments | 7 tweets | 11 linkedin
Feds get go-ahead to sell $28 million bitcoin stash; eBay UK to open virtual currency category

Feds get go-ahead to sell $28 million bitcoin stash; eBay UK to open virtual currency category

17 January 2014  |  5738 views  |  2 comments | 5 tweets | 10 linkedin
French Senate holds bitcoin hearing

French Senate holds bitcoin hearing

16 January 2014  |  4324 views  |  2 comments | 7 tweets | 3 linkedin
Indian bitcoin exchange shuts after central bank warning

Indian bitcoin exchange shuts after central bank warning

02 January 2014  |  7130 views  |  1 comments | 7 tweets | 3 linkedin
Bitcoin tanks after Chinese exchange blocks new deposits

Bitcoin tanks after Chinese exchange blocks new deposits

18 December 2013  |  5045 views  |  0 comments | 9 tweets | 4 linkedin
Norway says bitcoin an asset, not a currency

Norway says bitcoin an asset, not a currency

16 December 2013  |  5963 views  |  2 comments | 11 tweets | 6 linkedin
Swiss to vote on proposals to treat bitcoin as foreign currency

Swiss to vote on proposals to treat bitcoin as foreign currency

10 December 2013  |  36037 views  |  0 comments | 31 tweets | 13 linkedin
Mt. Gox boosts security with one-time password card

Mt. Gox boosts security with one-time password card

29 November 2013  |  4455 views  |  0 comments | 4 tweets | 6 linkedin
Senate Committee sets date for bitcoin hearing

Senate Committee sets date for bitcoin hearing

11 November 2013  |  7251 views  |  0 comments | 6 tweets | 4 linkedin

Related company news

 

Related blogs

Create a blog about this story (membership required)
Visit capgemini.comvisit abe-eba.eu

Who is commenting?

A Finextra member Finextra Member Commented on: In wake of EMV switch,...
A Finextra member Finextra Member Commented on: ANZ and Ingenico deplo...

Top topics

Most viewed Most shared
Danish banks add Dankort payments to mobile walletsDanish banks add Dankort payments to mobil...
15458 views comments | 2 tweets | 7 linkedin
MAS to roll out national KYC utility for SingaporeMAS to roll out national KYC utility for S...
12827 views comments | 33 tweets | 46 linkedin
hands typing furiouslyTwo key technologies driving Machine Learn...
9134 views 0 | 16 tweets | 4 linkedin
Moven strikes gold with TD Bank licensing extensionMoven strikes gold with TD Bank licensing...
7561 views comments | 20 tweets | 18 linkedin

Featured job

Six Figure Base + Commission + Stock Options
London

Find your next job