Posted on 02/28/2014 6:08:07 AM PST by Red in Blue PA
TOKYO (Reuters) - Mt. Gox, once the world's biggest bitcoin exchange, filed for bankruptcy protection in Japan on Friday, saying it may have lost nearly half a billion dollars worth of the virtual coins due to hacking into its faulty computer system.
The collapse caps a tumultuous few weeks in which the company has remained virtually silent after halting trades of the crypto-currency, shaking the nascent but burgeoning bitcoin community.
Wearing a suit instead of his customary T-shirt, Mt. Gox's French CEO Mark Karpeles bowed in contrition and apologised in Japanese at a news conference at the Tokyo District Court, blaming his firm's collapse on a "weakness in our system", but predicting that bitcoin would continue to grow.
(Excerpt) Read more at finance.yahoo.com ...
There was word these coins were protected. Simply wow!
Anyone who invests in bitcoin from here on out needs their head examined.
I’m assuming the deposit into Mt. Gox is part of the Bitcoin “chain” I keep hearing so much about. So anyone that attempts to use a Bitcoin where Mt. Gox is part of the the chain must be a hacker, right?
Digital money. Digial thievery.
Creating money out of thin air means its worth about the same.
might be a good time to get out right now and cash in to buy a million dollars house.
It’s probably a crime to hack the site, but except for that did the hackers steal anything real? Bankruptcy protection for what?
Someone enlighten me. The bitcoins stolen are encrypted and should be worthless to the hackers if they cannot trade them. Have the hackers just stolen bitcoins that are worth millions to the rightful owners, but not to them. But if they can trade them, isn’t there any audit trail or history referencing the previous owners.
I thought the same thing and realized that the paper and coin US currency is very similar. Maybe not immediately stolen but devalued out of existance.
But hey, it is backed by the promise of the federal government and the feds. That makes a difference. /sarc
Buh bye bitcoin?
I have little doubt that this was a well orchestrated clandestine government hack to take down Bit Coin. That said, anyone who invested in this Bit Coin was casino crazy.
> Bankruptcy protection for what?
All the shell companies they setup to facilitate their shemes. They set them up so they can get an FEIN which they can useto setup bank accounts that they use for money laundering purposes. While they’re active they use them as fronts for legal protection as well. They may set up many related or similar named companies to confuse and/or make it difficult for creditors to collect their unpaid promissory notes / commerial loans.
I was explaining my understanding of Bitcoin to others in a similar manner.
There's a chain of custody for every coin back to the "miner" or the entity who discovered the key.
So these coins are easily identified and blocked from future use.
It must be more complicated as these coins may have become anonymous and can be used. Perhaps the depositing process at this institution is flawed and the chain of custody cannot be violated.
If so the whole premise of crypt o-currency is null and void.
Deposit holding implies that the institution (MtGox)is honest and competent.
The problem is that the amounts stolen far exceed conventional currency theft, and the thieves can vanish in places we find hard to access. Pakistan anyone?
It also said there was a discrepancy of 2.8 billion yen ($27.4 million) in its bank accounts when it checked on Monday. Junko Suetomi, a lawyer with Baker & MacKenzie, said she could not comment on the balances of foreign bank accounts held by the company.
Much better article here: Mt. Gox Files for Bankruptcy, Claims $63.6m Debt
Click to be Added / Removed.
Started by people who didn’t understand how currency works.
A major problems begin here:
"That same document also described fiat assets of $32.43m and liabilities of $55m. The assets include $5m “held by CoinLab” and another $5.5m “held by the DHS”. The Department of Homeland Security seized that amount from Mt. Gox’s US accounts in mid 2013, claiming it had not registered properly as a money transmission business."
Their U.S. account lines were also closed.
Not defending Mt. Gox, but let's give credit were credit is due, as well...
Probably true, nevertheless, Bitcoin now appears hackable, probably by anyone with enough computing power.
You sure about that?
There are no Bitcoin “accounts”. There is no identity attached that can be followed backward. It only goes forward because of the way the encryption works.
The transactions are what is kept track of, by everyone. Everyone has a copy of the “ledger”.
It’s not bitcoin that was hacked, it was the site (gox) and their wallet was raided. Wallets are stolen quite frequently just like they are in real life.
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