Mt. Gox Bitcoin investors voice anger after creditors meet

Summary:Investors from failed Bitcoin exchange express anger following the first creditors meeting in Tokyo where questions remain unanswered over how US$500 million worth of the digital currency went missing.

Investors from failed Japanese Bitcoin exchange, Mt. Gox, are livid following the first creditors meeting Wednesday in Tokyo, where questions remain unanswered over the loss of some US$500 million worth of Bitcoins. 

A group of more than 100 investors were present at the courthouse meeting to quiz  Mt. Gox CEO Mark Karpeles  about how the digital currency could have been lost . "They are very careful about giving out any information at this stage, it seems," Tokyo-based IT engineer Kim Nilsson told AFP. "We were hoping for more, obviously."

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Kolin Burges, an investor from London, expressed anger at the lack of transparency regarding the missing Bitcoins: "I felt that they didn't give out the answers they should have done."

Karpeles and a court-appointed lawyer overseeing Mt. Gox's bankruptcy proceedings were unable to provide a clear explanation about what happened to the investors' money . Once a leading online exchange, handling some 80 percent of Bitcoin transactions worldwide, Mt. Gox froze all accounts and shuttered in February  following years of undetected leaks that resulted in the theft of 750,000 customer-owned Bitcoin, as well as the exchange's store of roughly 100,000 coins. In total, an estimated US$500 million was lost. System design flaws, hackers, and poor accountancy practices were blamed for the massive financial loss.

Karpeles later revealed the company had recovered around 202,000 Bitcoins still in its possession, about 200,000 of which had been held in "certain old-format wallets" and had escaped the theft. The CEO in April had  refused to travel to the U.S. to answer questions about the financial losses.

Investor Toshiya Takahashi told AFP: "The [creditors] meeting was designed to discuss the bankruptcy process itself and they separated that from what happened to Bitcoin. What people wanted to know was what happened and why."

Karpeles has reportedly refused to travel to the United States, where he was being asked to appear for questioning in connection with MtGox's collapse. There have been calls in Japan for a criminal investigation.

The next creditors meeting is scheduled to take place on November 26.

The European Banking Authority (EBA) recently recommended financial institutions avoid Bitcoin until regulatory systems were put into place. A document prepared by the EBA for address to the European Commission and European Parliament sets out the regulatory body's opinion (.PDF) on virtual currency such as Bitcoin, Litecoin, and Peercoin.

Despite the apparent risks, IT vendors such as  Dell and Apple in the past month have accepted the currency and Bitcoin apps on its online stores and App Store, respectively. 

Topics: Banking, Legal

About

Eileen Yu began covering the IT industry when Asynchronous Transfer Mode was still hip and e-commerce was the new buzzword. Currently a freelance blogger and content specialist based in Singapore, she has over 15 years of industry experience with various publications including ZDNet, IDG, and Singapore Press Holdings. Eileen majored i... Full Bio

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