Game over for MtGox as Bitcoin exchange files for bankruptcy protection


How does one simply lose 750,000 of its customers’ bitcoins and 100,000 of its own bitcoins?

Gigaom

The pioneering yet much-reviled Bitcoin exchange MtGox has officially filed for bankruptcy protection. According to a report in the Wall Street Journal, a company lawyer told Japanese journalists on Friday that the outfit had outstanding debts of roughly $63.6 million against assets of little over half that.

This is no surprise – Tokyo-based MtGox suffered a huge theft of Bitcoins sometime in recent years (no, it didn’t conduct any audits) and had major liquidity problems, meaning many of its customers are unlikely to get their money back. On Friday the company said it had lost 750,000 of its customers’ bitcoins and 100,000 of its own bitcoins.

The theft appears to have been largely MtGox’s fault for handling the Bitcoin protocol badly, but there also seems to be a wider weakness as other outfits have fallen victim to similar attacks.

Earlier this week, it emerged that American and Japanese…

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