Bitcoin exchange Mt. Gox goes awol: bitcoin value drops 60%

Wednesday 26 February 2014

Article by Mozo

As the world of virtual currency struggle to gain legitimacy, the industry has suffered a major blow as Japanese bitcoin exchange goes awol.

Bitcoin exchange Mt. Gox goes awol

A coalition of virtual currency companies have announced on Tuesday that Tokyo-based Mt. Gox went under after racking up catastrophic losses. Mt. Gox's website was returning only a blank page on Tuesday.

The disappearance of the site follows the resignation Sunday of Mt. Gox CEO Mark Karpeles from the board of the Bitcoin Foundation, a group seeking legitimacy for the exotic new form of money.

The exchange had imposed a ban on withdrawals earlier this month.

Prominent supporters of bitcoin which included San Francisco-based wallet service - sought to shore up confidence in the currency by saying Mt. Gox's collapse was an isolated case of mismanagement. They argued it had abused users' trust, but did not offer details.

"As with any new industry, there are certain bad actors that need to be weeded out, and that is what we are seeing today," the statement said.

Since its creation in 2009, bitcoin has become popular among tech enthusiasts, libertarians and adventurous investors because it allows people to make one-to-one transactions, buy goods and services and exchange money across borders without involving banks, credit card issuers or other third parties.

For this reason it's difficult to know how many people around the world posses bitcoin or how they will be affected by the collapse of the Japanese exchange. The currency has attracted a large amount of media attention and with an increasing number of large retailers such as Overstock.com begin to accept it.

Speculative investors have jumped into the bitcoin fray, too, sending the currency's value fluctuating wildly in recent months.

In December, the value of a single bitcoin hit an highest high of $1,200. In the aftermath of the Mt. Gox collapse Tuesday, one bitcoin stood at around $470. A devastating drop of 60% for bitcoin investors.

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