Standard security procedures involve putting the bulk of a company’s Bitcoins on a computer or hard drive that is not connected to the Internet, an arrangement known as “cold storage.” To draw on them, a company would have to remove data from the computer without bringing it online––using a flash drive, for example––and combine it with the online, or “hot” wallets.
“Cold storage is a combination of technology and operational process,” Antonopoulos said in an e-mail. “They got some part of that wrong.”
2008 Introduction
Bitcoin was introduced in 2008 by a programmer or group of programmers under the name Satoshi Nakamoto and has since gained traction with merchants around the world. The digital currency has no central issuing authority, and uses a public ledger to verify transactions.
Akio Shinomiya, a lawyer for Mt. Gox, said the court will notify creditors identified by the exchange in its bankruptcy filing. Other creditors will have to make a claim themselves, and then the court would decide who gets repaid.
The company also set up a call center to answer customers’ questions about the bankruptcy.
Companies from San Francisco to London as well as the virtual currency’s industry group, the Bitcoin Foundation, have been seeking to assure Bitcoin users that their funds won’t disappear due to theft or mismanagement.
Meanwhile, Mt. Gox was sued by a customer in federal court in Chicago in a proposed class-action case representing all U.S. users who lost money.
“This catastrophic loss has not only revealed the instability of a burgeoning new industry, it has also uncovered a massive scheme to defraud millions of consumers into providing a private company with real, paper money in exchange for virtual currency,” Illinois resident Gregory Greene alleged in a complaint filed yesterday in federal court in Chicago.
Greene is pursuing class-action, or group, status on behalf of all people in the U.S. who paid Mt. Gox to buy, sell or trade in bitcoins as well as a those who had their currency stored with the Japanese entity on Feb. 7. Greene is also seeking imposition of a constructive trust over the business and an accounting.