The Tokyo Metropolitan Police Department has launched an official investigation into possible illicit activity surrounding the closure of Japan-based bitcoin exchange Mt. Gox.

The news comes roughly five months after the bitcoin exchange reported it lost roughly 744,400 BTC – then about $350m in customer funds, and about one month since Mt. Gox was approved for its Chapter 15 bankruptcy in the US.

A spokesperson for the police department told The Wall Street Journal:

“We decided to launch an investigation as we concluded this case could be connected to criminal activity.”

Tokyo police told the media outlet that they suspect roughly 27,000 BTC were stolen from the website.

Using past figures, however, as many as 544,000 BTC could theoretically be uncovered by the investigation, as Mt. Gox later confirmed that it found 200,000 BTC in an old bitcoin wallet in March, reducing its total estimated number of lost bitcoins.

Investigation ongoing

The news, while vague as to how police will seek to carry out their mandate, is potentially encouraging to former exchange users still waiting for any action that could help recover their lost assets.

Lawyers representing the exchange’s former users and current creditors, for instance, have reported that they have been blocked from conducting any fact-finding into Mt. Gox KK, the company’s Japanese entity, since it was granted initial bankruptcy protection in the US.

Still, in comments to CoinDesk, representatives of the Edelson law firm suggested that they believe that any wrongdoing was perhaps the result of activity at the exchange itself, not necessarily any outside parties. It is unclear whether the new investigation is focusing on the company or on any alleged cybercriminal activity.

Mt. Gox has officially maintained that it lost the customer funds because hackers were able to exploit bitcoin’s transaction malleability – a process by which exchanges between Mt. Gox users were identified, though this claim was widely disputed by the community.

Police activity escalates

The announcement also comes amid an alleged increase in police activity related to digital currency in Japan.

For example, Japan’s Ministry of Economy, Trade and Industry first introduced a plan for how it would monitor illicit trade involving digital currency this May. This initiative would find the government agency working with other peer organisations such as the Financial Services Agency and National Police Agency.

That same month, police forces in Tokyo and Fukuoka carried out what was said to be the country’s first bitcoin-related arrest, when a 38-year-old bitcoin user was arrested for allegedly importing illegal stimulants.

Tokyo skyline via Shutterstock