Does anybody know what happens to funds on mtgox in case they go bust? Is there some kind of deposit insurance? I sold all my bitcoins but I've still got quite a lot of fiat on that account (USD) and losing it would really piss me off.
I'm going to assume this question is being asked in good faith.
Mt. Gox is not covered by the formal or informal guarantees to make creditors whole which the Japanese government customarily extends to regulated depository institutions. Mt. Gox has been, let me be delicate, cagey about their extent of involvement with Japanese regulators.
Should Mt. Gox abscond with your money, you will certainly have civil torts available. You can pursue them in any court of competent jurisdiction in Tokyo. This will take 3 to 5 years and cost you several hundred thousand dollars. I'll save your competent legal representative some time and cut to the chase: vindication in court will not enable you to recoup a single yen.
