Mt. Gox, the troubled Bitcoin exchange that filed for bankruptcy protection last week, just issued a new statement on its predicament. This latest announcement outlines Mt. Gox’s dire financial situation, and what the company plans to do about it.
Over the past several days, Mt. Gox has been noticeably silent about its internal situation. This statement serves to confirm the veracity of a prior leaked document, a purported situation crisis strategy draft that purported more than $380 million in customers’ bitcoins were lost. The actual number is even more staggering; the company estimated carrying around $500 million in bitcoin.
But despite this serious impediment, the Mt. Gox statement also confirmed CEO Mark Karpeles’ insistence that the company hopes to continue operating even in insolvency:
“In order to increase repayments to our creditors, it is necessary to explore the possibility of having Mt. Gox Co., Ltd. continue its business,” he wrote.
There’s a small possibility the Bitcoin community, aware of the many people who lost everything to Mt. Gox’s failings, will still invest in the company. In order to address people’s obvious questions, the statement outlines Mt. Gox’s plan to open a call center to deal with customer’s questions, like for example, “Where are my bitcoins?”
Mt. Gox may have come clean, but the surprising details of its shortcomings may be the nail in the coffin. The company blames a bug in the Bitcoin software for its enormous bitcoin loss, but an anonymous Mt. Gox employee told the Daily Beast that the company failed to do even basic things to protect customers’ bitcoins, like patching its software bugs.
But it’s not as if Mt. Gox is going to be missed. According to Jerry Brito, senior research fellow at the Mercatus Center at George Mason University and director of its Technology Policy Program, Bitcoin’s true believers are saying good riddance to Mt. Gox, and predicting the Bitcoin community will be stronger in its absence.
“Mt. Gox was negligent, perhaps criminally so,” Brito said. “It’s good that this unprofessional exchange is exiting Bitcoin and leaving a space for more serious services.”