International investors who are currently locked out of their funds at Mt. Gox – for a time the world’s largest Bitcoin volume exchange handler – are now looking for guidance from local authorities as to how they would get their money back. Mt. Gox is based in Tokyo, but so far, the Japanese financial authorities have chosen to distance themselves from Bitcoin issues, leaving these investors with no solutions as to how they will get their money back from Mt. Gox.
Mt. Gox – a company which started out as an exchange for trading gaming cards but was converted to an exchange for crypto-currency unit Bitcoin – had, for a time, accounted for more than 80% of all bitcoin trading volume last year. The Tokyo-based company had recently halted all customer bitcoin withdrawals earlier this month, with the company claiming that there was a bug in the bitcoin software allowed some users to alter transactions, a security flaw that could make it possible for users to make fraudulent withdrawals.
This puts bitcoin investors at huge risk these days, and some of them have travelled from other countries just to protest outside of Mt. Gox’s offices in Tokyo. To exacerbate the investors’ problems, Mt. Gox chief Mark Karpeles on Monday resigned from the board of the Bitcoin Foundation, the virtual currency’s most influential group. Karpeles’ resignation has already caused the trading value of bitcoins to slide. Some of these investors have then contacted Japan’s Financial Services Agency (FSA), the country’s banking watchdog. Some lawyers and other legal experts are of the opinion that a deposit-taking entity such as Mt. Gox should be under the FSA’s jurisdiction. But the FSA has distanced itself from the issue. “Bitcoin isn’t a currency; it works as an alternative to currencies, like gold,” an FSA spokesman said Monday. “The FSA is in charge of currency-based services. Therefore, bitcoin exchanges are not a subject to our regulatory oversight.”
Bank of Japan Gov. Haruhiko Kuroda said in December last year that he was “very interested” in the potential of the virtual currency, promising that the central bank’s research arm was looking into the strengths of the issue, but the Bank of Japan spokesman said on Friday that the bank “is not in a position” to regulate bitcoin and its exchanges. Even Japan’s Ministry of Finance said on Monday that it isn’t its job to supervise bitcoin and related services. This puts the Bitcoin investors of Mt. Gox at a relative loss as to the future of the money they have tied up in the company.
[via Wall Street Journal]