Mt. Gox Finds $116m Worth of Bitcoins

The exchange filed for bankruptcy protection stating that 850,000 bitcoins had disappeared

Mt. Gox has said it found 200,000 of the bitcoins it claimed may have disappeared as a result of a software flaw.

In a statement on its website Thursday, the failed exchange said it found 200,000 bitcoins in an old-format digital wallet, reducing the number of bitcoins missing to 650,000.

The finding may be a glimmer of hope for Mt. Gox's customers, although bankruptcy proceedings in Japan and the U.S. are unlikely to result in a speedy determination of which creditors get paid first. The 200,000 bitcoins were worth about US$116 million at market price Friday.

Wallets are software programs for holding and transferring bitcoins, and other payments applications. The wallet in which the bitcoins were found were used in the past and the exchange thought it no longer held any bitcoins, wrote Mark KarpelA"s, Mt. Gox's CEO.

The Tokyo exchange filed on March 9 for bankruptcy protection in the U.S. in the U.S. Bankruptcy Court for the Northern District of Texas, Dallas Division, after filing for bankruptcy in Tokyo District Court on Feb. 28.

The company suspended trading on Feb. 25 and said it had lost around 750,000 Bitcoins owned by customers and around 100,000 belonging to the exchange, valued at US$474 million at the time.

In its filing to the bankruptcy court in Dallas, KarpelA"s said he believed that the theft or disappearance "was caused or related to a defect or 'bug' in the bitcoin software algorithm, which was exploited by one or more persons who had 'hacked' the bitcoin network."

While rescanning the wallets and researching their contents, after the commencement of the court proceedings, Mt. Gox found that an old format wallet used before June 2011 held a balance of about 200,000 bitcoins.

The bitcoins have been transferred to offline wallets between March 14 and 15 after first being transferred to an online wallet for security reasons, the exchange said in its statement. The finding of the bitcoins was reported to the court.

Mt. Gox now holds about 202,000 bitcoins, including the recovered 200,000 and about 2,000 held at time of starting the bankruptcy proceedings.

The reasons for the bitcoins' disappearance and their exact number is still under investigation and the figures may still change depending on the results of the investigation, KarpelA"s said in the statement.

This story, "Mt. Gox Finds $116m Worth of Bitcoins" was originally published by IDG News Service Bangalore Bureau.

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