Several bitcoin exchanges including the now-defunct Mt. Gox received subpoenas from Manhattan federal prosecutors this winter as they look into possible ties between the exchanges and the online drug market Silk Road, the Wall Street Journal reported on Monday, citing people familiar with the matter.
Mark Karpeles
Tokyo, Japan-based Bitcoin exchange Mt Gox will file for liquidation in Tokyo instead of its initial plan of rebuilding the firm under bankruptcy protection after a bug reportedly brought the site down.
Three people told Reuters that employees already approached Chief Executive Officer Mark Karpeles in 2012 about how the bitcoin exchange was protecting the money of its clients.
According to security researchers at Securelist, the data stolen from the computer owned by Mt Gox Chief Operating Officer Mark Karpeles' computer contained malware that pretended to be a back-end app for Mt Gox transactions but actually stole users' Bitcoins.
Tokyo, Japan-based Bitcoin exchange Mt Gox set up a call center to deal with the inquiries of Bitcoin users after it lost $473 million worth of the digital currency and filed for bankruptcy protection.
Manhattan Attorney Preet Bharara has sent subpoenas to Mt. Gox, other bitcoin exchanges, and businesses that deal in bitcoin to seek information on how they handled recent cyber attacks, a source familiar with the probe said on Wednesday.
Mt. Gox Chief Executive Officer Mark Karpelès has resigned as a board member from the Bitcoin Foundation, according to a source interviewed by The WSJ and confirmed by the foundation with a statement on its website.
With Bitcoin encountering a series of problems lately, including withdrawal halting of exchanges, a $2.7 million heist, and a flaw in the Bitcoin protocol, speculations abound that the Bitcoin is coming to an end soon.
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