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Bitcoin Company Mt. Gox Files For Bankruptcy Protection

Bitcoin company Mt. Gox had discovered many of its bitcoins were stolen by hackers earlier this month. It has now filed for bankruptcy protection.

Bitcoin Company Mt. Gox Files For Bankruptcy Protection
Bloomberg / Tomohiro Ohsumi
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Mt. Gox — once the largest Bitcoin exchange — has now filed for bankruptcy protection.

About 750,000 bitcoins belonging to customers and an additional 100,000 of the company's own bitcoins disappeared earlier this month. In response, the company ceased all transactions before finally shutting down its website Monday. (Via Fox Business)

The Wall Street Journal reports the company filed for bankruptcy in Japan. At a press conference, a lawyer for Mt. Gox said the company has about $64 million in outstanding debts.

About the missing bitcoins, the company CEO said: "There was some weakness in the system, and the bitcoins have disappeared. I apologize for causing trouble." (Via NTDTV)

The bitcoins were first thought to be missing due to technical difficulties, but the BBC reports they're now presumed stolen.

It adds the lost bitcoins would be worth more than $470 million in the current market, although they were worth much more before the company ceased transactions.

The company's troubles have subsequently affected the public's confidence in virtual currency, which is not regulated by the government.

But in a statement, several CEOs of other bitcoin companies say they're confident in the future of bitcoins and are working to re-establish trust in the industry.

An economic expert tells CNBC people have been reluctant to call for regulation of the industry, but now they say supervision is key in protecting people's money.

Many authorities around the world are calling for cooperation in regulating the bitcoin world to protect users and avoid security flaws. (Via The New York Times)

But according to The Wall Street Journal, U.S. Federal Reserve Chairwomen Janet Yellen said Thursday the bitcoin transactions are not a part of the banking industry and the Federal Reserve "simply does not have authority to supervise or regulate bitcoin in any way."

Details about bitcoin recovery remain unclear, but some experts think those affected might be able to recover little of their funds, if at all.