As Mt.Gox Site Disappears, Future of Bitcoin Virtual Currency in Doubt

As Mt.Gox Site Disappears, Future of Bitcoin Virtual Currency in Doubt

331
0
SHARE

As Mt.Gox Site Disappears Future of Bitcoin Virtual Currency in DoubtLate Monday night, the Japanese Bitcoin-trading website Mt.Gox was taken offline. Once the largest trading platform for Bitcoins in the world, millions of dollars placed there by investors who gambled on the currency is at risk.

On Sunday, Mt.Gox CEO Mark Karpeles resigned from his position with the Bitcoin Foundation and the exchange deleted all of its tweets on Twitter.

Sponsored Links

Bitcoin investors have been left frightened, and the price has dropped as well. After trading at more than $1,000 last year, Bitcoins dropped to $500. After Mt.Gox went down, the price dropped to $130 at the website, while it was still trading at four times that amount on other exchanges.

For most of last year, Mt.Gox struggled as its accounts were seized by government regulators. This made it increasingly difficult for customers to get their money. Earlier this month, the website restricted withdrawals, citing technical issues.

On Monday, Ryan Galt, a Bitcoin blogger, posted a document online apparently outlining a crisis strategy from the company. In the document, the company claimed to have lost track of 744,000 Bitcoins, which were apparently stolen over several weeks as the exchange dealt with security issues. Soon after, the site was taken down.

On his blog, Galt wrote, “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 through Coinbase.”

Many Bitcoin backers are celebrating this developing, calling it the end of the amateurs in the crypto-currency. Several prominent Bitcoin companies have added their names to a statement to increase credibility in the currency, including Coinbase, Kraken, Circle, and Bitstamp.net.

While Mt.Gox’s shutdown was a surprise, its mounting troubles were not a secret.

“The people running the systems right now are not necessarily business men,” said Evan Rose, president of Bitcoin ATM company Genesis. “For the most part, they’re people who came into this digital project without grasping the value or risk of it. The ecosystem is maturing, but it’s a little scary for everyone involved.”

The failure of the major exchange is also bolstering the case for more regulation of Bitcoin, although it’s unclear if any regulators will step in to prevent these disasters in the future.

More News

While mortgage rates remain fairly flat as the week begins, they have been declining for more than one month despite the Federal Reserve raising interest rates in December. Continued market volatility and rising home prices are keeping mortgage rates...
Home prices rose in 20 cities at a faster pace at the end of 2015, continuing a hot growth streak that some economists warn may hurt affordability. The Standard & Poor's/Case-Shiller 20-city home price index increased 5.8% in November from...
The frenzied demand for lower mortgage rates has definitely slowed after reaching a peak in 2012. Mortgage rates have remained consistently below 4% for some time, and it would be easy to assume that almost everyone who could have...
Samsung has officially confirmed that the Galaxy S7 flagship will be announced at the Unpacked 2016 event on February 21. While specs wise, the company is yet to confirm anything, one can expect at least two different versions of...
Yesterday, Samsung officially revealed the launch date of the much anticipated Samsung Galaxy S7 lineup. The company officially announced via a teaser video that the Galaxy Unpacked event of 2016 will be held on February 21. This means that...