Mtgox Bankruptcy Press Conference
Applying for bankruptcy on Friday, beleaguered Bitcoin Exchange , MtGox, posted an update today of its court filing. According to the document, MtGox entered what is a called a Procedure of Civil Rehabilitation. During this process, company funds and its operations are more or less frozen, giving investigators time to assess its future and investigate financial options. According to the filing, MtGox reported liabilities of around $635 million versus assets of only about $375 million. The shortfall was blamed on missing bitcoins due to a “a bug in the bitcoin system."
However, while issues with bitcoins have been known since the beginning of February, MtGox also stated in the bankruptcy filing that approximately $275 million in customer funds were missing in accounts at financial institutions. The report of a shortfall in customer cash marked the first time that MtGox has publicly stated that client missing funds included both bitcoins and fiat currency. While MtGox has blamed ‘bugs’ in the bitcoin technology leading to possible theft of the digital currency, without the firm issuing a reason behind the disappearance of the fiat cash, it implies foul play was conducted by insiders at exchange. (More on the case)
Beyond Bitcoins, one of the bigger stories among digital currencies has been the rise of auroracoin. Trading currently near $40, and sporting an overall market cap of over $400 million, auroracoin has displaced litecoin as the number two digital currency in terms of overall value behind bitcoin. Auroracoin was created as the ‘digital currency’ for Iceland and a replacement for the country’s krona which has experienced continued devaluation over the last fifty years. As such, its creator will make available 31.8 auroracoins (currently valued over $1000) to 330,000 Icelanders on March 25th in what is being termed the ‘Airdrop’. In anticipation of the airdrop as well as tight supply, prices of auroracoin have been surging upward, having risen 10X since last Wednesday. (More on auroracoin)
Elsewhere, despite the problems at MtGox, prices of bitcoins have remained steady, finding steady support above $500. In addition, bitcoin firms continue to report steady growth for their products as market bellwether, Coinbase, announced it has surpassed one million consumer wallets being created. As a result of the uptake in usage, bitcoins have become a possible refuge of funds in the Ukraine as citizens have been reported to be withdrawing the local hryvna (UAH) from their accounts due to growing conflict between them and Russia (more on the UAH to BTC)
