Mt. Gox files for bankruptcy

by Joe Curtis| 28 February 2014

Reveals it has debts of $64m after loss of bitcoins.

The world's largest Bitcoin exchange has filed for bankruptcy, revealing that it has outstanding debts of around $64m.

A lawyer for Mt. Gox made the revelations in a press conference this morning at the Tokyo District Court.

Earlier this week, a leaked document suggested the exchange had lost 744,408 bitcoins ($350m) through a flaw exploited by hackers and cyber criminals.

The flaw, known as a 'transaction malleability' issue, allowed third-parties to alter the hash of a transaction (which is simply the confirmation code given to a transaction to show it has completed legitimately), making it appear as if the transaction had not gone through.

They could then request the transaction to be put through again, effectively doubling the amount of money they received.

Hackers took advantage of Mt. Gox in this way, but the exchange has suffered heavy criticism after its CEO, Mark Karpeles, admitted it had not kept up with Bitcoin code updates that tackled the flaw.

Karpeles called a halt to bitcoin withdrawals early this month, triggering a price plunge in the digital currency, and the Bitcoin community has reacted angrily, many claiming they will never see their money stored in the exchange.

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