17 August 2017
Find out more

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

28 February 2014  |  6198 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  |  6833 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  |  7259 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  |  6681 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  |  6773 views  |  7 comments | 10 tweets | 7 linkedin
Bitcoin bug causes massive sell-off

Bitcoin bug causes massive sell-off

10 February 2014  |  15311 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  |  7940 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  |  6107 views  |  2 comments | 5 tweets | 10 linkedin
French Senate holds bitcoin hearing

French Senate holds bitcoin hearing

16 January 2014  |  4578 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  |  7418 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  |  5337 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  |  6554 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  |  36478 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  |  4653 views  |  0 comments | 4 tweets | 6 linkedin
Senate Committee sets date for bitcoin hearing

Senate Committee sets date for bitcoin hearing

11 November 2013  |  9071 views  |  0 comments | 6 tweets | 4 linkedin

Related company news

 

Related blogs

Create a blog about this story (membership required)
visit www.niceactimize.comdownload the paper nowvisit www.worldpaymentsreport.com

Who is commenting?

Top topics

Most viewed Most shared
Coinbase raises $100mCoinbase raises $100m
10540 views comments | 14 tweets | 14 linkedin
DBS Bank launches online car selling marketplaceDBS Bank launches online car selling marke...
9946 views comments | 13 tweets | 11 linkedin
China preps central clearing house for mobile payments providersChina preps central clearing house for mob...
9918 views comments | 8 tweets | 15 linkedin
Monzo appoints Curve co-founder Foster-Carter COOMonzo appoints Curve co-founder Foster-Car...
8263 views comments | 1 tweets | 3 linkedin
hands typing furiouslyCompliance: Overcome the data deficit
7721 views 0 | 1 tweets | 8 linkedin

Featured job

Find your next job