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Bitcoin exchange Mt. Gox steals away in the night

Feb 25, 20143 mins

Where is the Mt. Gox CEO, Mark Karpeles? More importantly, what happened to all of the Bitcoin? Seemingly overnight the much ballyhooed new currency took a major punch right in the coin purse. Mt. Gox was gone.

From Reuters:

Mt. Gox, once the world’s biggest bitcoin exchange, looked to have essentially disappeared on Tuesday, with its website down, its founder unaccounted for and a Tokyo office empty bar a handful of protesters saying they had lost money investing in the virtual currency.


The digital marketplace operator, which began as a venue for trading cards, had surged to the top of the bitcoin world, but critics – from rival exchanges to burned investors – said Mt. Gox had long been lax over its security.

And just like that, they were gone.

So, people put their faith in an unregulated currency and dealt with an exchange that was built to handle…trading cards? Yeah, I can see why this was a good idea. 

I’ve never been a huge fan of Bitcoin. I like the idea but, the implementation has been comical. Bitcoin was trading up well over $1000 back in November 2013 after spiking from just about $150 a month earlier. But, no one seemed to mind. “The point is ladies and gentlemen that greed, for lack of a better word, is good.” ~Gordon Gekko

Here we find ourselves in February 2014 and one of the largest Bitcoin exchanges has vanished in the night. There was talk of a hack. There has been alleged leaked acquisition plans. Over 700,000 bitcoins are now unaccounted for. The company was drowning in red ink. The CEO is in the wind. Connect the dots.

Was this a problem with Bitcoin specifically? No.

Is this now a problem for Bitcoin? Absolutely.

There is damaged trust and a lot of pissed off people who have lost their coins.

From NY Times:

A statement from the chief executives of Bitcoin companies like Coinbase, Circle, and Payward, said that the “tragic violation of the trust of users of Mt. Gox was the result of one company’s abhorrent actions and does not reflect the resilience or value of Bitcoin and the digital currency industry.”

When this boils right down to it I’d hazard that this was just a heist. An inside job. I may very well be wrong. We’ll have to wait and see how this plays out.

[UPDATE]: This was just posted in the last few minutes on the MT. Gox site (10:50 am est) 

Like I said, we’ll have to wait and see.

(Image used under CC from antanacoins)


Dave Lewis has over two decades of industry experience. He has extensive experience in IT security operations and management. Currently, Dave is a Global Security Advocate for Akamai Technologies. He is the founder of the security site Liquidmatrix Security Digest and co-host of the Liquidmatrix podcast

The opinions expressed in this blog are those of Dave Lewis and do not necessarily represent those of IDG Communications, Inc., its parent, subsidiary or affiliated companies.

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