Japan's finance minister says to further study bitcoin market

Japan's Finance Minister Taro Aso said Friday the government will try to increase its understanding of the virtual bitcoin market as it probes the recent turmoil surrounding the Tokyo-based Mt. Gox bit coin exchange.

"We do not clearly know what bitcoins are, so we have to start studying it," Aso told a news conference.

"We are not sure whether there was a theft involved or if the operator has just run away with it," the minister said.

He added that the government here does not consider bitcoins to be a regular currency and as such the exchange has not been subject to direct oversight by the finance ministry since the virtual currency sprang to popularity in 2009.

Aso said that within the ruling Liberal Democratic Party of Japan, a group has been set up to probe the bitcoin market and Mt. Gox incident.

"Something will have to be done about this in Japan," said Aso, adding that the government would work hard to come up with a response.

Mt. Gox was once the world's biggest exchange for bitcoins, but the market suddenly shut down on Tuesday following weeks of turmoil, observers said.

Withdrawals were suspended by the exchange on Feb. 7 after a number of cyber attacks and customers have been unable to recover their funds.

Reports have stated that an estimated 744,000 bitcoins (worth around 350 million U.S. dollars) may have been stolen over several few years due to a security loophole, with as many as 1 million account holders possibly being affected.

Mt. Gox, while its company offices in Tokyo remain empty this week and its CEO Mark Karpeles remains absent, has received a subpoena from federal prosecutors in New York, leading other bitcoin exchanges around the world to issue a joint statement distancing themselves from the troubled Mt. Gox.

Karpeles issued a statement however denying that he had fled from the scandal and confirming that he was still in Japan trying to fix the exchange's string of problems.

"As there is a lot of speculation regarding Mt. Gox and its future, I would like to use this opportunity to reassure everyone that I am still in Japan, and working very hard with the support of different parties to find a solution to our recent issues," Karpeles said in the statement.