Japan’s bitcoin community hears Mt. Gox’s final death rattle, releases the Kraken

When Mt. Gox, the former poster child for the wonders of Bitcoin, lost US$460 million worth of bitcoins in a hacking attack, the cryptocurrency world teetered on the brink of failure. Skeptics gained undeniable justification for their derision and public faith in the security of bitcoin exchanges dropped almost as precipitously as the currency’s value. Today, Mt. Gox, chastened and bankrupt, was essentially handed over to bitcoin exchange Kraken, officially turning the page on Bitcoin’s tumultuous first chapter.

The Wall Street Journal is reporting that Kraken, which is operated by the San Francisco-based Payward, Inc., just launched in Japan last month and will oversee Mt. Gox’s payment of debts to its creditors. Kraken will also chip in JPY 30 million (US$250,000).

Though Kraken is deepening its connection to Mt. Gox, it will not be acquiring the bankrupt firm. Rather, this move is best seen in the context of Kraken’s quest to legitimize Bitcoin and restore faith in the cryptocurrency.

Already, Kraken has performed one of the only bitcoin audits to prove that its supply had not been tampered with. It is also teaming up with Fidor Bank to create the world’s first bitcoin bank. Kraken has even taken the step of helping found the self-regulatory Digital Asset Transfer Authority (DATA) in an effort to show that the bitcoin world has some semblance of order.

Since the Mt. Gox disaster, Japan has seen a number of bitcoin players like Coincheck, BMEX, and BitFlyer jockey to gain the upper hand. However, by solving a major headache for Japanese regulators, Kraken may have just taken the lead.

See: After Mt. Gox collapse, these bankers want to build a safer Bitcoin exchange in Japan