Mt Gox finds 200,000 'forgotten' bitcoins

Last updated 17:25, March 21 2014

Mt Gox says it found 200,000 "forgotten" bitcoins on March 7, a week after the Tokyo-based digital currency exchange filed for bankruptcy protection, saying it lost nearly all the 850,000 bitcoins it held, worth some US$500 million at today's prices.

Mt Gox made the announcement on its website. Online sleuths had noticed around 200,000 bitcoins moving through the crypto-currency exchange after the bankruptcy filing.

The exchange, headed by 28-year-old Frenchman Mark Karpeles, said the bitcoins were found in an old-format online wallet which it had thought no longer held any bitcoins, but which it checked again after its bankruptcy filing.

"On March 7, 2014, MtGox Co, Ltd confirmed that an old format wallet which was used prior to June 2011 held a balance of approximately 200,000 BTC," the statement said.

It added that it moved the 200,000 bitcoins from online to offline wallets on March 14-15 "for security reasons." "These bitcoin movements, including the change in the manner in which these coins were stored, had been reported to the court and the supervisor by counsels," it noted.

Many of Mt Gox's 127,000 creditors, who feared they had lost their investments when the exchange filed for bankruptcy, are skeptical about what the exchange has said happened to the bitcoins it had. In its bankruptcy filing, Mt Gox also said US$28 million was "missing" from its Japanese bank accounts.

BITCOIN TRACKING

On Thursday, a US judge in Chicago overseeing a class action against Mt Gox revised a previous order, allowing some of the exchange's bitcoin movements to be tracked.

"Today in court we got relief ... specifically to track the 180,000 bitcoins, which we've been monitoring. Hours later, Mt Gox claimed it "found" these bitcoins ... it appears Mt Gox realised we were close and decided to acknowledge that it owned these 180,000-200,000 bitcoins," Steven L. Woodrow, a partner at law firm Edelson, told Reuters vin emailed comments.

Edelson is representing Illinois resident Gregory Greene, who proposed the class action over what he claims is a massive fraud. Mt Gox blamed the loss of 750,000 bitcoins belonging to its customers and 100,000 of its own on hackers who attacked its software.

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Bitcoin is bought and sold on a peer-to-peer network independent of central control. Its value soared last year, and the total worth of bitcoins is now about US$7 billion.

 - Reuters