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Mt. Gox Files for Bankruptcy, Faults Hackers and Flawed System for Collapse The end has officially come for the former Bitcoin trading heavyweight, as it files for Chapter 11 in Tokyo and admits to losing nearly half a billion U.S. dollars worth of the virtual currency.

By Kim Lachance Shandrow

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

Internet pioneer Marc Andreessen said that Mt. Gox "had to die," and it officially just did.

After a rocky few weeks practically sputtering on life support, the troubled Bitcoin trading exchange, once most robust in the world, filed for bankruptcy protection in Tokyo District Court today.

CEO Mark Karpeles blamed hackers for his company's demise, saying they exploited a "weakness" in Mt. Gox's computer system that enabled them to pilfer almost half a billion U.S. dollars worth of the digital currency. Karpeles, like Andreessen and scores of fellow Bitcoin defenders, says he still expects the controversial unregulated virtual currency to grow and thrive, even as his exchange pulls the plug on itself.

Related: Bitcoin Exchange Mt. Gox Apologizes About Crippling Hack, Says Withdrawals to Resume Soon

"First of all, I'm very sorry," he said. "The bitcoin industry is healthy and it is growing. It will continue, and reducing the impact is the most important point."

Mt. Gox, which claimed for a time that it oversaw approximately 80 percent of all dollar-for-Bitcoin trades across the globe, said it discovered on Feb. 24 that 750,000 of its customers' bitcoins were missing, along with 100,000 of its own. That adds up to about $480 million total, approximately 7 percent of the estimated total of bitcoins in existence.

The company halted customer withdrawals on Feb. 7 and later wiped out the contents of its website and Twitter feed, sparking accusations of insolvency and rocking the Bitcoin trading community worldwide.

Related: Bitcoin Advocate Andreessen: "Mt. Gox Had to Die'

The widely expected bankruptcy filing comes only one day after Japan's highest government spokesperson announced that Japanese authorities, along with the country's Ministry of Finance, are actively investigating angry investor claims that Mt. Gox lost their Bitcoin. Federal prosecutors in New York subpoenaed the trading platform this earlier this month.

Meanwhile, as of 9:56 a.m. ET, Bitcoin prices hit $561.24, according to the CoinDesk Bitcoin Price Index. The price dipped below $500 last Monday, its weakest price since November, when it rallied at about $1,200.
Kim Lachance Shandrow

Former West Coast Editor

Kim Lachance Shandrow is the former West Coast editor at Entrepreneur.com. Previously, she was a commerce columnist at Los Angeles CityBeat, a news producer at MSNBC and KNBC in Los Angeles and a frequent contributor to the Los Angeles Times. She has also written for Government Technology magazine, LA Yoga magazine, the Lowell Sun newspaper, HealthCentral.com, PsychCentral.com and the former U.S. Surgeon General, Dr. C. Everett Coop. Follow her on Twitter at @Lashandrow. You can also follow her on Facebook here

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