Mt. Gox, once the dominant exchange for bitcoin trading, on Friday said more than $470 million of the virtual currency vanished from its digital coffers, kicking into high gear a search for the missing money by victims and cybersleuths
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The price swings have hit some investors hard. Fortress Investment Group FIG +1.40%LLC on Friday recorded an unrealized loss of $3.7 million from its purchase of $20 million worth of bitcoins last year. The asset-management firm held $16.3 million worth of bitcoins at the end of 2013, according to a filing with the U.S. Securities and Exchange Commission.
Mt. Gox halted customer withdrawals three weeks ago, saying a "bug in the bitcoin software" allowed some users to alter the ID on transactions and fraudulently claim that bitcoin transfers hadn't been sent. Other exchanges also had problems but were able to provide patches so activity could resume.
Mt. Gox didn't recover, and it shut down operations Tuesday.
The defunct exchange is the target of an investigation by the U.S. attorney's office for the Southern District of New York. The scope of the probe isn't clear, but prosecutors have subpoenaed the company, ordering it to preserve certain documents, according to a person familiar with the matter.
Mt. Gox also faces lawsuits from customers. On Thursday, a customer who claims to have $25,000 worth of bitcoins tied up at Mt. Gox filed a lawsuit seeking class-action status against the exchange. Gregory Greene, who filed the claim with an Illinois District Court, is seeking damages, an injunction, restitution and other remedies.