Embattled Bitcoin exchange Mt. Gox is filing for bankruptcy protection with liabilities of ¥6.5 billion ($63.6 million), according to Japanese media reports.
A lawyer for the exchange, which had suspended bitcoin withdrawals weeks ago, made the announcement at a press conference at the Tokyo District Court.
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The lawyer said roughly ¥2.8 billion in cash was unaccounted for.
"I am deeply sorry," CEO Mark Karpeles told reporters in Japanese, offering a ritual bow of apology. "There were weaknesses in the system."
Mt. Gox said that 750,000 bitcoins belonging to customers, and 100,000 of its own, had been lost, according to media reports. That represents about $474,000,000 at the current bitcoin price of around $558.
Its website went offline this week as U.S. and Japanese authorities began looking into the situation surrounding the Tokyo-based exchange.
"I'm angry and sad," said Aaron G, a Mt. Gox investor who did not want his last name used. With hundreds of bitcoin stuck in Mt. Gox, Aaron and another bitcoin investor, Kolin Burges, held a small protest outside the office of Mt. Gox owner Tibanne in Tokyo.
"A lot of people were hoping for a miracle, though I'd seen enough evidence to not hold out much hope," Aaron said in an email.
"I just want to see justice done now. This is not just a civil matter. They knew they had lost these coins and continued to operate the exchange and accept deposits. You can't sell something you don't have and not be committing fraud."
"I am extremely disappointed with the company but not surprised," Burges said in an email. "I am thoroughly disgusted by the company and the way they have ruined so many people's lives, as well as disgusted by their conduct through this whole situation. I will be doing anything I can to ensure that anyone at the company who was to blame for this faces justice for any crimes they might have committed."
"I will also do anything I can to investigate what was really going on there, but hopefully the courts and police of Japan will do a thorough job here," said Burges, who flew from London to protest at the office of Mt. Gox in Tokyo.
The bankruptcy filing follows online allegations that Mt. Gox had multiple coding vulnerabilities that may have allowed hackers to steal bitcoin. It had suspended bitcoin withdrawals to outside addresses due to what it claimed was a technical issue known as transaction malleability.
It alleged that the bug, which had been known about in the bitcoin community for years, could have allowed for fraudulent abuse of bitcoin transaction records.
Repeated inquiries to the exchange went unanswered. On Thursday, a woman at a virtual office in a Tokyo office tower that was listed as the exchange's last address said that Mt. Gox was no longer there.
"The one thing certain is that it has little to do with the worldwide cyber attack on the Bitcoin network in early February that used transaction malleability," Bitcoin observer Kenji Saito, an assistant professor at the Graduate School of Media and Governance in Keio University, said in an email.
"The issue is too small to shut down one of the largest bitcoin exchanges in the world," Saito added. "Rather, it must be that Mt. Gox has committed something unfaithful to its customers, even before February 2014."
Japanese police and government ministries began gathering information about Mt. Gox following its closure this week.
"I am getting to feel that this whole case might have been well planned so that prosecutions of any kind are made difficult," Saito said.
Mt. Gox received a subpoena this month from U.S. federal prosecutors in New York asking it to preserve certain documents, The Wall Street Journal reported this week, citing an anonymous source familiar with the matter. A spokeswoman at the U.S. Attorney's Office for the Southern District of New York declined to comment.
The fall of Mt. Gox is one of the biggest blows to bitcoin, a digital currency often billed by proponents as being free from government regulation and costing nothing to send and receive.
It follows the theft last November of over $1 million in bitcoin from Bitcoin Internet Payment Services, a Denmark-based exchange that promoted itself as Europe's biggest, as well as a heist involving about $1.4 million from online wallet service Inputs.io, and the disappearance of a Chinese bitcoin exchange with more than $4 million in it.
Bitcoin was trading hands at $556 following the bankruptcy announcement, down slightly from the day's high of $579, according to CoinDesk.com.