Two years before Mt. Gox filed for bankruptcy, a half dozen employees at the Tokyo-based bitcoin exchange challenged CEO Mark Karpeles over whether client money was being used to cover costs, according to three people who participated in the discussion, Reuters reported. The question of how Mt. Gox handled other people's money - the issue raised by staff in the showdown with Karpeles in early 2012 - remains crucial to unraveling a multi-million dollar mystery under examination by authorities in Japan.

Mt. Gox said on Friday it found 200,000 "forgotten" bitcoins on March 7, a week after the Tokyo-based digital currency exchange filed for bankruptcy protection, saying it lost nearly all the 850,000 bitcoins it held, worth some $500 million at today's prices, Reuters reported. Mt. Gox made the announcement on its website. Online sleuths had noticed around 200,000 bitcoins moving through the crypto-currency exchange after the bankruptcy filing.

A U.S. judge who froze assets belonging to the American affiliate of bankrupt Bitcoin exchange Mt. Gox Co. loosened that restraint to see where some of the digital currency flows, Bloomberg News reported. U.S. District Judge Gary Feinerman in Chicago today revised his temporary order issued March 11 to allow movement -- and possibly tracking -- of small amounts of Bitcoin. Jay Edelson, a lawyer for Mt. Gox depositor Gregory Greene, told the judge today that he was “trying to find a pot of crypto-gold.” Greene sued the exchange and and its principal, Mark Karpeles, for fraud last month.

One of the Bank of Japan's more outspoken policy board members warned on Wednesday that too much monetary stimulus could cause problems for the economy in the future, even as the head of the bank said that it should stand ready to act again if needed, The Wall Street Journal reported. Board member Takahide Kiuchi, a former Nomura Securities economist, has been skeptical over the BOJ's ability to attain its 2% inflation target in two years and is wary of maintaining an ultra-easing monetary policy for an extended period.

Mizuho Financial Group is set to bring Japan's first overseas new-style bank capital instrument, testing investors' stance on the country's unique interpretation of loss-absorption rules, Reuters reported. Unlike other jurisdictions, where regulators prioritise investor bail-ins before injecting public money into a bank, Japan has legal provisions that could reduce the possibility of bondholder losses in the event an institution gets into trouble.

Two months before Mt. Gox filed for bankruptcy it was sued by a customer seeking the return of funds in a case that highlights some of the red flags raised in the run-up to the collapse of what was once the world's biggest bitcoin exchange, Reuters reported. New York resident Marko Simovic filed a civil action at the Tokyo District Court on Dec. 24, seeking to recover $105,000 he had on deposit at Mt. Gox and about $14,000 in interest, court filings show. Simovic, who described himself as a software developer who previously managed the bitcoin operations for a hedge fund, said Mt.

A federal judge in Chicago froze the U.S. assets of the chief executive of Tokyo-based Mt. Gox as part of a customer lawsuit against the defunct bitcoin trading exchange, The Wall Street Journal reported. Separately, regulators took steps to gain greater control of the fledgling virtual currency and protect consumers from bitcoin scammers.

Japan’s government said Bitcoin isn’t a currency amid calls for its regulation a week after the bankruptcy of Mt. Gox, the Tokyo-based exchange that was once the world’s biggest. There is no law to define Bitcoin and relevant ministries are gathering information on it, Prime Minister Shinzo Abe’s cabinet said in a statement in response to questions from an opposition party lawmaker. Bitcoin transactions can be taxed, according to the statement obtained by Bloomberg News. Japan isn’t the only country grappling with the regulation of Bitcoin.

The Mt. Gox bitcoin exchange in Tokyo filed for bankruptcy protection Friday and its chief executive said 850,000 bitcoins, worth several hundred million dollars, are unaccounted for, The Washington Post reported. The exchange’s CEO Mark Karpeles appeared before Japanese TV news cameras, bowing deeply. He said a weakness in the exchange’s systems was behind a massive loss of the virtual currency involving 750,000 bitcoins from users and 100,000 of the company’s own bitcoins. That would amount to about $425 million at recent prices.

Sony is now looking to sell its former headquarters and surrounding buildings in central Tokyo in its continuing struggle to stem losses from its consumer electronics business, according to a person familiar with the plan, The Wall Street Journal Japan Real Time blog reported. The sale would follow a frenzied unloading of properties in 2013, the most iconic being the $1.1 billion sale of Sony’s U.S. headquarters at 550 Madison Avenue.