(Adds fresh statement, detail and background throughout)
By Sophie Knight
TOKYO, March 26 In the first confirmation of a
criminal investigation at Mt. Gox, the failed Tokyo-based
bitcoin exchange said on Wednesday it was working with the
police "with regard to the disappearance" of bitcoins worth some
$490 million at current prices.
Mt. Gox said in a brief statement on its website that it had
submitted records and documents to the Tokyo Metropolitan Police
as part of its civil rehabilitation application. A police
spokesman declined to comment and said no announcements were
Mt. Gox filed for bankruptcy protection in Tokyo on Feb. 28,
saying 750,000 bitcoins belonging to its customers and 100,000
of its own bitcoins were stolen by hackers who exploited a
security flaw in its software. It also said $28 million were
"missing" from its Japanese bank accounts.
It was not immediately clear if the police investigation was
looking into those missing funds. A representative on a helpline
for Mt. Gox creditors told Reuters the exchange had been working
with the police as of "two days ago." Lawyers for Mt. Gox were
not immediately available to comment.
A court-appointed administrator is due to report by Friday
on a month-long examination into Mt. Gox and determine whether
the exchange can be rehabilitated or should be liquidated.
Mt. Gox has also filed for bankruptcy protection in the
United States after U.S. customers with funds and bitcoin frozen
at Mt. Gox began a class-action against the exchange, alleging
fraud by the company and its 28-year old CEO, Mark Karpeles.
Another class-action suit was filed in Canada on
March 16, alleging a lengthy security breach resulted in "the
pilfering of millions of dollars' worth of Mt. Gox users'
Both lawsuits also named Mizuho Bank Ltd, one of
Japan's largest lenders, for allegedly aiding in a fraud by
providing banking services to Mt. Gox. The plaintiffs say their
money was held in an account or accounts at Mizuho. The bank has
previously declined to comment on the lawsuits.
Last week, Mt. Gox said it had found 200,000 "forgotten"
bitcoins - nearly a quarter of those missing - on March 7 in an
old format "wallet" that it had thought was empty.
That came after a U.S. judge in Chicago
overseeing the U.S. class-action allowed some of Mt. Gox's
bitcoin movements to be tracked.
U.S. federal investigators are working multiple theories and
have yet to rule out the possibility of involvement by someone
inside Mt. Gox, a person with knowledge of that investigation
Mt. Gox creditors had anticipated a different announcement
on Wednesday after Eren Canarslan, a Turkish investment banker
who said he had been in touch with Karpeles, tweeted that Mt.
Gox would soon announce it had found an additional 670,000
(Additional reporting by Emily Flitter in NEW YORK and Tom Hals
in DELAWARE; Editing by Ian Geoghegan)