The Internal Revenue Service has laid down the law when it comes to how it will treat the digital currency, while at the same time Mt. Gox finally got around to calling the police regarding its missing Bitcoins.
The IRS has actually managed to make a confusing situation even more so. The agency declared that Bitcoins are not legal tender and are to be taxed as property, not currency. That is unless a person is being paid in Bitcoins. In which case that person will have to pay taxes on the Bitcoions as if it were real money.
For traders Bitcoins will be treated as any other commodity with people having to pay taxes on any capital gains.
On the Mt. Gox side of the story it decided to seek professional help to find its missing Bitcoins.
Normally when a business believes $500 million in property has been stolen, its first call is to the local police, but digital currency exchange Mt. Gox has reportedly just contacted the Tokyo Metropolitan Police regarding the disappearance of 850,000 Bitcoins.
Mt. Gox said it has asked the local police for advice concerning the missing Bitcoins that the company believes may have been stolen. Mt. Gox did "find" 200,000 coins that it had left in a forgotten "digital wallet."
"Mt. Gox Co. Ltd. consulted with the Metropolitan Police Department with regard to the disappearance of Bitcoins," the company said in a statement issued on its website in Japanese.
"It has submitted necessary electronic records and other related documents," the company stated, adding it "intends to fully cooperate with each competent authority."
The Tokyo police have not publicly stated whether or not it will open an investigation. The thought being that since few of those who lost money when Mt. Gox filed for bankruptcy last month were Japanese citizens that the police might take a hands off approach. This is the manner Japanese security regulators are using to handle the situation.
There has been no indication that the company intends to contact American law enforcement concerning the missing Bitcoins.
In what could be an odd twist, Mt. Gox could find itself under investigation if some people have their way.Hackers have accused the exchange of hiding Bitcoins supposedly stolen.
The company's trip to its local precinct is only the latest story to be played out. Mt. Gox has filed for bankruptcy protection in both Japan and the U.S. under Chapter 15. It has miraculously found $116 million worth of supposedly lost Bitcoins and New York State has implemented a plan that would pull digital currency exchanges under its regulatory umbrella.
Two class actions suits have been filed in the U.S. and Canada by Bitcoin investors who have had their funds frozen. These legal moves have also named Mizuho Bank of Japan for allegedly aiding in a fraud by providing banking services to Mt. Gox.
Perhaps the most bizarre twist involves California resident Dorian Satoshi Nakamoto. In a huge story Newsweek said this quiet engineer was the programming genius behind Bitcoin. Nakamoto has denied any connection with the company and called the Newsweek story a total fabrication. He has recently hired a lawyer.
