Bitcoin’s faltering reputation as a viable currency has been dealt a severe blow, with its biggest exchange filing for bankruptcy in the wake of an apparent $480 million (€347 million) digital robbery.
Tokyo-based MtGox blamed "a weakness in our system" for its collapse, which an expert said could go down in history as one of the world's biggest heists, if it is confirmed the platform was hacked.
The contrite chief executive of MtGox, Mark Karpeles, pledged to lodge a criminal complaint over the site's downfall.
The 28-year-old Frenchman added that bitcoin’s popularity would not be dented by the cyber-heist. “First of all, I’m very sorry,” he said. “The bitcoin industry is healthy and it is growing. It will continue, and reducing the impact is the most important point.”
Angry investors have been seeking answers for what happened to their holdings of cash and bitcoins on the unregulated Tokyo-based exchange. MtGox, which was used overwhelmingly by foreigners, said it had lost 750,000 of its users’ bitcoins and 100,000 of its own. At the current bitcoin price of about $565, that would total some $480m – representing about 7 per cent of the estimated global total of bitcoins.
Bitcoin users are able to buy goods anonymously in online marketplaces that use the virtual currency, while avoiding sales taxes and currency controls. Exchanges like MtGox offer a way to convert official currencies into bitcoins. – (Guardian News and Media 2014)
