Japan is considering implementing Bitcoin taxes

Bitcoin can’t get a breather. First Mt. Gox imploded. Now, Flexcoin has flatlined. The Alberta, Canada-based Bitcoin exchangesays its closing down after cyber thieves made off with about $600,000 worth of the digital currency. Thanks to a “front-end flaw” in Flexcoin’s software code, hackers ripped off all 896 of the small trading post’s modest supply of bitcoins. Flexcoin launched in June 2011 on an invite-only beta basis and officially went live on Aug. 4 later that same year. 

Japan will this week set out rules on how to handle bitcoins, the first sign that the government is taking action on regulating the virtual currency after the collapse last week of Tokyo-based Mt. Gox, once the world’s dominant bitcoin exchange. The cabinet will decide on Friday how to treat bitcoins under existing laws, said people familiar with the matter, adding that banks and securities firms will not be able to handle bitcoin as part of their main business, suggesting the crypto-currency will be treated more as a commodity, like gold. Japan has struggled to define its approach to bitcoin since the collapse of Mt. Gox, which filed for bankruptcy protection in Tokyo on Friday, saying it had lost bitcoins and cash worth some half a billion dollars due to hacker attacks on what it said was its lax computer system security.

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