Mt. Gox Files For Bankruptcy After $473M Of Bitcoins Go Missing
It has now been confirmed that the Bitcoin exchange Mt. Gox that once controlled 80% of the global Bitcoin trades has filed for bankruptcy. After a week of hiding away the 28-year old CEO Mark Karpeles filed for bankruptcy in a Tokyo court on Late Friday. The worst fears have been confirmed as almost the entire 850,000 Bitcoins owned by Mt. Gox has “gone missing”.
To put this in perspective this amounts to 7% of all Bitcoins that have been minted. With the current Bitcoin rates this “misplacing” of these Bitcoins amounts to almost half a billion dollars. The exact events that led to such a cyber-heist are something out of a Hollywood movie. There is speculation which ranges from hackers, DDoS attacks and the more intriguing theory that the entire theft was a once in a lifetime cyber heist which will go down in the history books.
Forget about armed robberies and start thinking cyber pirates who with a touch of a button are able to commit what is a faceless crime. This development is not only significant for Bitcoin in general but puts the focus on the dangers of not having enough measures in place to prevent a hack or a DDoS attack. We all remember Sheldon Adelson’s sites going down mysteriously for over a week. In that case as well the conspiracy theories were wild and you would be a fool to rule out anything when looking at the bigger picture.
The flaws in the Bitcoin structure are not unknown and were pointed out in previous reports. Experts believe that Mt. Gox were simply lax in fixing the loopholes where other Bitcoin exchanges did just that. If Bitcoin was an unknown entity to a lot of people, this latest heist will certainly expose Bitcoin and virtual currencies to the mainstream market. It’s all very well do try and describe exactly how Bitcoin works but the bottom line is when nearly $500 million goes missing there is nothing virtual about these hard dollar bills.
Mt. Gox of course continue to maintain a deafening silence and are sticking to their guns by claiming the theft was due to hackers and a weakness in their system. Whether it be the reported document floating around the internet claiming Mt. Gox had a “malleability-related theft which went unnoticed for several years”or hackers, the burning question is if investors looking to get rich in today’s modern Gold Rush will be deterred from risking their cash?