On news of long-unnoticed theft, major Bitcoin site Mt. Gox skedaddles

On news of long-unnoticed theft, major Bitcoin site Mt. Gox skedaddles

[Ed. – So much dumber than gold.]

The most prominent Bitcoin exchange appeared to be on the verge of collapse late Monday, raising questions about the future of a volatile marketplace.

On Monday night, a number of leading Bitcoin companies jointly announced that Mt. Gox, the largest exchange for most of Bitcoin’s existence, was planning to file for bankruptcy after months of technological problems and what appeared to have been a major theft. A document circulating widely in the Bitcoin world said the company had lost 744,000 Bitcoins in a theft that had gone unnoticed for years. That would be about 6 percent of the 12.4 million Bitcoins in circulation. …

[P]lans for any new venture will be tested by the collapse of Mt. Gox, which could shake the faith of early Bitcoin adopters. Ryan Galt, a blogger who writes frequently about Bitcoin and was one of the first to circulate the news about Mt. Gox, wrote on Monday: “I do believe that this is one of the existential threats to Bitcoin that many have feared and have personally sold all of my Bitcoin holdings.”

On Monday, Mt. Gox took down all of its previous posts on Twitter, one day after its chief executive, Mark Karpeles, resigned from the board of the Bitcoin Foundation, a nonprofit that advocates for virtual currencies. …

Many leading names in the Bitcoin community were still trying to determine the scope and potential consequences of the troubles at Mt. Gox. A document detailing the purported theft, labeled “Crisis Strategy Draft,” appeared to come from Mt. Gox.

While officials at the Bitcoin Foundation could not verify the origins of the document, they were preparing for the closure of Mt. Gox.

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