Japan Says Bitcoin Can't Be Owned

After Tokyo-based bitcoin exchange Mt. Gox collapsed, users lost millions of dollars worth of bitcoins overnight. It remains a mystery as to whether fraud, mismanagement, cybercrime or a combination of the three caused the exchange to fail, but the incident has damaged the cryptocurrency's reputation and made many wary of using it. Those who were affected by the Mt. Gox closing have been searching for ways to recover some of their funds, but a

this week is likely to make that process much more difficult.

An unnamed plaintiff, who lost around $128,144 worth of bitcoins when Mt. Gox went under, brought a lawsuit against the bankrupt company demanding he be repaid the 458 bitcoins that were in his account at the time. However, Judge Masumi Kurachi denied the man, saying that bitcoin is "not subject to ownership."

Kurachi's ruling was based on the fact that bitcoin is intangible and relies on third parties in order to function. For that reason, Kurachi said, the cryptocurrency is not covered under Japanese law.

The ruling could make it even more difficult for the thousands of other creditors who are owed by Mt. Gox to get their money back. The firm filed for bankruptcy following its collapse, and the process to divide up the its remaining assets is expected to be a lengthy one. Most expect that they will only receive a tiny fraction of what they are owed based on estimations of the firm's value.