Leading Bitcoin Exchange Mt. Gox Files for Bankruptcy; Nearly $500 Million in Bitcoins Lost

Posted on February 28, 2014 4:30 PM by Rob Williams

It’s been quite a month for Bitcoin, and while a lot of news has been good, there’s one story that’s trumped them all: The closing of Mt. Gox. Anyone who’s been following the ongoing saga this past month will no doubt be unsurprised at the exchange’s move to file for bankruptcy, but it’s hard to express in words how unfortunate that things are ending as they are.

Earlier this month, the Tokyo-based exchanged halted all withdrawals, and over the course of the next couple of weeks, excuses were given as to the reason for the delay. Initially, it was stated that the halt was due to the discovery of some technical flaw, but with the move to file for bankruptcy, it’s become clear that the problem is much greater than that. Mt. Gox’s current stance is that a hacking caused all of this to happen, but for users affected by Bitcoin loss, that’s a hard excuse to accept.

Mt Gox Bitcoin Logo

Some have speculated that Mt. Gox’s owners could have lost the keys required to keep the entire operation running, although that seems highly unlikely. When it comes to managing what’s in effect half a billion dollars’ worth of other people’s money, it’d take quite the group of people to be careless with such an important key. At this point, though, Mt. Gox users are demanding answers, and they’re not coming fast enough. Bitcoin evidence simply doesn’t disappear, even with the loss of a key, so information is needed, and needed now.

I’m not a Bitcoin user, so this debacle hasn’t affected me, but I can’t help but feel for those who lost money – and some have lost lots (some users have reportedly lost hundreds of thousands of USD in equivalent Bitcoins). Adding insult to injury, anyone who used their computers for Bitcoin mining and lost out here would have been increasing their power bill costs all that time for nothing. It’s a bad situation all-around.

Cyanide and Happiness - Bitcoin

A lawsuit has already been filed against Mt. Gox, and press conferences have been ongoing. It’s hard to say exactly how things are going to play-out from this point forward, but as an outsider I am very interested in following it along.

  • zacharyt1122

    Not surprised. This is a gamble that people had to know they were taking. I know banks have a bad rep but at least your money is FDIC insured (some of it at least.)

  • ray

    oh gee, i didn’t see this one coming………………….

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