Bitcoin still booming in Japan, despite Mt. Gox collapse
Four years after a well-known Tokyo based bitcoin exchange Mt. Gox was hacked and went bankrupt, the case still casts a shadow over the regulatory administration set up to secure Japan’s booming digital currency market.
Mt. Gox still had around 200,000 bitcoins left in a different storage area after 850,000 vanished in 2014. Those holdings are overseen by court-appointed trustees who have sold 35,000 bitcoins, raising 44 billion yen ($415 million) in cash to repay loses from the exchange’s failure. Given today’s prices, the rest of the bitcoins are worth significantly more than the evaluated $620 million in earlier losses.
The trustee dismisses claims that sale set off a recent slight dip in profoundly unpredictable bitcoin prices.
Mr. Mark Karpeles, the French founder and former CEO of Mt. Gox, says he would like to recover the millions lost by his clients in the theft. That’s now a plausibility, given the rise in bitcoin’s price in recent years.
After Mt. Gox fall, Mark Karpeles was arrested for months before being freed on 10 million-yen ($94,000) bail while anticipating the result of his trial for theft and data manipulation, charges unrelated to the hack.
Mark Karpeles said in an interview:
“What I’m trying to do is to find the best solution. Because I believe it is my responsibility as CEO of Mt. Gox.”
Mt. Gox was a reminder for Japan. However, the comparatively stable regulatory administration set up after the bitcoin dealers have not averted further hacks. Earlier this year the Tokyo-based Coincheck exchange announced a 58 billion yen ($547 million) loss of a digital currency called NEM because of suspected hacking.
Mr. Yuzo Kano Chief Executive for Bit Flyer, one of Japan’s most significant licensed cryptocurrency exchanges, said, “Japan is currently bitcoin’s heart, the nation that is at the focal point of its help,” who helped the government set up its licensing system and other regulations.
Mr. Yuzo Kano stated, about half of the global bitcoin trading is estimated to be in yen, and there are 16 authorized cryptocurrency exchanges in Japan, where there are 2-3 million bitcoin owners. That could grow to 10 million this year.
Kano headed the Japan Blockchain Association and was newly tapped to lead another association to beef up regulations, working with the Financial Services Agency.
Bitcoin has been a legitimate mode of payment in Japan since April 2017, and a few of the significant retailers already acknowledge bitcoin payment.
The government, such as China and South Korea, have embraced more careful approach while others, like Switzerland and Canada, are wooing the “miners” whose powerful computers process the algorithms used to make cryptocurrency tokens. The U.S. falls someplace in the middle.
Mark Karpeles is expecting the capture in July in Greece of a primary suspect in the Mt. Gox robbery, Alexander Vinnick, will help overcome any doubt that he may have stashed the missing bitcoins. A California grand jury has charged Alexander Vinnick, a Russian, on the accusation he utilized funds from the Mt. Gox hack for money-laundering. However, it’s unclear whether he’ll be extradited to the U.S. or Russia.
Mark Karpeles is not too optimistic about finding the missing bitcoins. His lawyers have depicted the young French man as a convenient scapegoat for Japanese officials to find somebody to blame for an embarrassingly large cybercrime.
He compares how digital currencies functions, and the precariousness of their value, to a game of musical chairs — with about 10,000 people around each chair.
Mark Karpeles said:
“As long as everyone is dancing, it’s fine, but if everyone wants to sit at the same time, there won’t be enough chairs.”