Tuesday, February 25, 2014

Mt. Gox goes dark; bitcoin wallet service allegedly lost 750,000 BTC

If you ever questioned why something like the FDIC was useful, take a look at the state of affairs in the bitcoin market right now. Mt. Gox, the once dominant trading platform for the virtual currency, appears to be suffering a terminal illness, with a leaked crisis document obtained by GigaOm and published late Monday night stating that Mt. Gox had "lost" about 750,000 BTC worth around $375 million.

The exchange's website has been taken down, and currently displays the following message
:Dear MtGox Customers,

In light of recent news reports and the potential repercussions on MtGox's operations and the market, a decision was taken to close all transactions for the time being in order to protect the site and our users. We will be closely monitoring the situation and will react accordingly.

Best regards,
MtGox Team
While the $375 million figure is, of course, malleable due to the ups-and-downs of BTC value, 750,000 BTC -- or to be precise, 744,408 BTC is about 6 percent of all the bitcoins in circulation.

Though it is unclear what will happen to customers of Mt. Gox, a number of other bitcoin community members said, in a statement, that they would work together to reassure customers and the general public. These include Coinbase, Kraken, BitStamp, Circle, and BTC China.

As nascent a currency as it is, bitcoin investing holds substantial risk. The revelations about Mt. Gox only go to further show just how risky it really is.

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