A week after Mt. Gox collapse, Japan struggles to understand bitcoin

By William Mallard TOKYO (Reuters) - A week after the collapse of Mt. Gox, Japan is still struggling to craft a response to the bitcoin phenomenon, saying the crypto-currency is not legal tender, though it might be taxable and subject to money-laundering controls. The issue took on new prominence in Japan on February 28, when Mt. Gox sought Chapter 11-style bankruptcy protection, saying it had lost bitcoins and cash worth some half a billion dollars due to hacker attacks. Although the government understands that bitcoin is not issued or backed by any government or central bank, "we have not grasped the situation in its entirety." The authorities are monitoring the Mt. Gox bankruptcy process and, if necessary, will consider a response, said Chief Cabinet Secretary Yoshihide Suga. Fewer than 1 percent of Mt. Gox's 127,000 creditors are Japanese, the company has said.

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