Mt.Gox CEO: 'I'm still in Japan, don't bother staff'

Mark Karpeles, the CEO of embattled bitcoin exchange Mt.Gox, has tried to dampen speculation regarding the company, confirming that he has not left Japan - where the exchange is based - amid reports that regulators are investigating the exchange.

In an update on Mt.Gox's website - which went offline on Monday evening - Karpeles said he was still working hard with the support of different parties to find a solution to the exchange's recent issues.

"I would like to use this opportunity to reassure everyone that I am still in Japan," he said. "Furthermore I would like to kindly ask that people refrain from asking questions to our staff: they have been instructed not to give any response or information."

Mt.Gox, once the world's biggest bitcoin exchange, abruptly stopped trading on Tuesday and its chief executive said the business was at "a turning point," sparking concerns about the future of the unregulated virtual currency. A report Wednesday by the Wall Street Journal, citing a person familiar with the matter, said the bitcoin exchange had received a subpoena from federal prosecutors in New York.

(Read more: Mt.Gox: All transactions closed 'for the time being' )

The subpoena was sent this month and asked Mt.Gox to preserve certain documents among other things, the Journal said. Meanwhile, Japanese authorities are looking into the abrupt closure of Mt.Gox, the top government spokesman said on Wednesday in Tokyo's first official reaction to the turmoil at the company.

"At this stage the relevant financial authorities, the police, the Finance Ministry and others are gathering information on the case," Chief Cabinet Secretary Yoshihide Suga told a regular news conference when asked about Tuesday's shutdown of the Tokyo-based exchange.

(Read more: Mt.Gox CEO says bitcoin exchange at 'turning point' )

Mt.Gox - which once claimed it handled around 80 percent of all global dollar trades for bitcoin - is an online marketplace where people can buy or sell bitcoins using different currencies. However, its customers have been unable to withdraw their bitcoins and convert them into U.S. dollars since the beginning of February. The exchange blamed the problem on a critical loophole-known as "transaction malleability"-in the cryptocurrency that it said leaves all exchanges open to hacking.

The issues at Mt.Gox caused anger in the bitcoin community with some customers taking to social media to express their dissatisfaction amid rumors that the company could be concealing financial difficulties. An unverified document circulating online claims that Mt.Gox has lost 744,408 bitcoins (worth around $350 million) due to theft related to the trading fault.

The company said that it would update customers via announcements on its website. The price of bitcoin hovered around $560 on Wednesday, according to CoinDesk which tracks the price on various major exchanges.

Some high-profile advocates were defiantly defending the virtual currency on Wednesday, as well as calling for tighter regulation.

Bobby Lee, the CEO of BTC China, told CNBC he had been calling for greater regulation for a while, saying that problems like those at Mt. Gox would persist otherwise.

Meanwhile, tech investor Marc Andreessen took to Twitter to say that Mt.Gox's decline was an example of financial markets working fairly. U.S broadcaster Max Keiser, another advocate of the cryptocurrency, declared it was bitcoin's "finest hour".

Max Keiser tweet

image: © lloydm

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