Feb 26, 2014 02:53 PM EST
Prosecutors Open Investigation Into Bitcoin Businesses

A Manhattan U.S. attorney has sent subpoenas to Mt. Gox, businesses that deal in Bitcoin, and other bitcoin exchanges, to find out information on how they dealt with recent cyber-attacks, according to a report by Reuters.

Hackers overwhelmed bitcoin exchanges recently by sending thousands of "phantom transactions."

Approximately three exchanges had to stop withdrawals of bitcoins back on February 7, including Tokyo-based Mt. Gox, due to the attacks, technically referred to as "distributed denial of service attacks."

The exchange failed to resume service before going dormant on Feb. 25. Most customers were unable to recover their funds beforehand, according to Reuters.

Company CEO Mark Karpeles said this week that he is working with "others" to handle the company's issues.  

"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 a statement posted on the company website.

A spokesman for Bharara has yet to comment.

Bitcoin is a form of electronic money which investors can deposit into digital wallets at specific exchanges. So the Mt. Gox shutdown is similar to a bank closing its doors, meaning people are not able to receive their money.

Over the last year or so, Bitcoin has gained acceptance as another method of payment, attracting venture capital investors from around the world.

The price of bitcoin was at approximately $573 on U.K.-based Bitstamp, which is the second-most active exchange in the last 30 days by volume.

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