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Screenshot of a breaking news alert e-mail from Q2 2017
Accompanying the new found reputable status which has bestowed itself on Bitcoin over the last few weeks is the continuing undertone of the red faces within Japan’s government departments which are continuing to seek recourse over the demise of MtGox earlier this year.
MtGox’s catastrophic failure was the last event in a line of Bitcoin-related events which portrayed the virtual currency as at best a very risky and speculative investment with no backing, and at worst the preferred unit of currency for nefarious activity which was highlighted by the US government seizure of Silk Road last year, and the arrest of its operator.
In the ultra-conservative financial sector which operates in Japan, dominated by long-established corporate giants who are subject to extremely bureaucratic regulations and pride themselves on customer loyalty, Japan’s criminal justice departments are seemingly not ready to let MtGox disappear quietly along with the funds of investors.
As last week drew to a close, the Tokyo Police Department began its investigation into possible illicit activity surrounding the closure of what had been the largest Bitcoin venue in existance.
“We decided to launch an investigation as we concluded that this case could be connected to criminal activity” was the official statement provided by the Tokyo Police Department to the Wall Street Journal.
Tokyo Police suspects that roughly 27,000 BTC were stolen from the website, which collapsed five months ago causing $350 million in customer losses.
At a time when Bitcoin has garnered tremendous support from regulatory authorities in North America and Switzerland, as well as having become the subject of venture capital investment in order that further technology can be developed and the ecosystem that provides access to the virtual currency can be expanded, Japanese law enforcers are ensuring that the nation preserves its reputation as a financial center rather than being remembered for the MtGox saga which has until now gone unrectified.
Before launching a criminal investigation, Japan’s civil authority, the Ministry of Economy, Trade and Industry first introduced a plan for how it would monitor illicit trade involving digital currency this May. This initiative would find the government agency working with other peer organisations such as the Financial Services Agency and National Police Agency.
Whether any actual evidence will lead to prosecution is yet unknown, as it is entirely open to discussion as to whether any transgression of law came about as a result of users, but as a result of the operation of the exchange itself, and at this point there has been no clarification as to whether the investigation will cover the exchange as an entity, or whether it will also include the conduct of users.
According to CoinDesk, 544,000 BTC could theoretically be uncovered by the investigation, as MtGox later confirmed that it found 200,000 BTC in an old bitcoin wallet in MMarch, reducing its total estimated number of lost bitcoins.
Civil investigations by lawyers representing any creditors of the exchange are likely to be stonewalled due to the company’s Japanese entity, MtGox KK, having been made insolvent, under which circumstance it was granted bankruptcy protection in the United States. Should any criminal activity be unearthed, the circumstances would be considerably different, therefore the ability to bring those at fault to book would be a much easier task.