Investing.com - Bitcoin prices rebounded more than 10% on Wednesday, on reports that authorities in both the U.S. and Japan have begun looking into the collapse of Tokyo-based Bitcoin exchange Mt. Gox.
According to the CoinDesk Bitcoin Price Index, which averages prices from the major exchanges, prices of the crypto-currency jumped 9.9% to trade at $587.60.
The price of a Bitcoin last traded at $595.95 on Slovenia-based BitStamp, up 13.7%, while prices on BTC-e rallied 12.5% to trade at $582.00.
BitStamp is now the world’s largest Bitcoin exchange by volume, while Bulgaria-based BTC-e is the second-biggest.
The Wall Street Journal reported Tuesday that federal prosecutors based in New York had served Mt. Gox with a subpoena earlier this month. The report said the subpoena included an order for Mt. Gox to preserve certain documents.
Japanese officials also said they were looking into the matter. “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 said at a news conference earlier Wednesday.
The website of the Tokyo-based Mt. Gox Bitcoin Exchange went blank on Tuesday, in the latest development to roil the virtual currency market.
Mt. Gox issued a terse statement saying, ““We should have an official announcement ready soon-ish. We are currently at a turning point for the business.”
The news comes amid rumors that the exchange had become "insolvent" after losing 744,408 Bitcoins, worth around $350 million at current prices, due to a years-long hacking effort that went unnoticed by the company.
Mt. Gox’s troubles started on February 7, when it was forced to halt all Bitcoin withdrawals, citing technical issues.
Prices on Mt. Gox plunged to $91.50 on February 21 as investors were disappointed with a lack of concrete details regarding progress made on resuming withdrawals on the struggling exchange.
Mark Karpeles, chief executive officer of Mt. Gox, resigned from the board of the Bitcoin Foundation on February 23. The exchange was a founding member and one of three elected industry representatives on the board of the Bitcoin Foundation.
Mt. Gox was once the world's largest Bitcoin trading exchange, with volume topping 1 million trades a day at its peak.
Bitcoin is digital cash for the internet and it is not backed by a government or central bank to regulate or issue it. It can be used to purchase goods and services from stores and online retailers.