Failure of Mt Gox bitcoin exchange hurts virtual currency’s prospects
Collapse of Tokyo-based Mt Gox could be fatal to virtual money's quest to gain wider acceptance
The sudden disappearance of one of the largest bitcoin exchanges adds to the mystery and mistrust surrounding the virtual currency, which was beginning to gain legitimacy beyond the technology enthusiasts and adventurous investors who created it.
Prominent bitcoin supporters said the apparent collapse of the Tokyo-based Mt Gox exchange was an isolated case of mismanagement that would weed out "bad actors". But the setback raised questions about bitcoin's tenuous status and even more tenuous future. At least one supporter said the blow could be fatal to bitcoin's quest for acceptance by the public.
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A coalition of virtual currency companies said Mt Gox went under after secretly racking up catastrophic losses. The exchange had imposed a ban on withdrawals earlier this month.
By Tuesday, its website returned only a blank page. Yesterday, it displayed a notice to customers that said all transactions were closed "for the time being" to protect the site and customers. The collapse followed the resignation on Sunday of CEO Mark Karpeles from the board of the Bitcoin Foundation, a group seeking wider use of the digital currency.