Mt.Gox on the edge of bankrupcy

Earlier I wrote about Mt.Gox halting their transactions until a glitch in the system is fixed. The Bitcoin downfall seems to be in action as strong as ever because what is looked like a "glitch in the system" that hackers could have taken advantage of, became an excuse for money laundering and bankrupcy scandal in cryptocurrency market giants Mt.Gox deparment and CEO, Mark Karpeles. Federal judge decided to freeze assets of Mt.Gox CEO and all of the company belongins.

What first looked like an managable hacking attempt that has been going on around in the industry like a plague, turned out to be a very alarming news for the investors. Mt.Gox has filled for bankrupcy with debts estimated around $64 million, which leaves investors wondering if they are ever going to get their money back. The company has now turned down their website which disables investors from performing transactions in bitcoins. It is estimated that $1.75 millions worth of bitcoins has disappeared from Mt.Gox and it's customers. Teikoku Databank, a bankrupcy managment firm, is now carrying an extensive research of Mt.Gox and it's assets.

Mark Karpeles could be facing jail time

Both the affiliate company in U.S and the parent company located in Japan named Tibanne, has it's funds freezed as well. These actions should prevent customers losing even more money. However, it is not known what is the market value of these companies or if they will be able to compensate for Mt.Gox debt. It's not completely out of the blue that the company went down, it already had great problems with finances and it was just a matter of time when the downfall will turn into collapse.

It was estimated that Mt.Gox received $380,450 of revenue during 2012 but managed to lose around 13 times that amount next year. U.S authorities collected $5 million of Mt.Gox revenue because of alleged lying on bank documents. Such headlines are bringing even more dark news to the bitcoins as it's market value has dropped dramatically by about 50%. Altough the tendencies are depressing, numerous experts say that this should not be the end of bitcoins.