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MtGox Files For Bankruptcy Protection

Posted by Soulskill on from the all-about-the-bitjamins dept.

Sockatume writes "The beleaguered MtGox bitcoin exchange has officially filed for bankruptcy protection in Tokyo. According to the Wall Street Journal, Bitcoin held an impromptu press conference that addressed recent rumors. They state that they have over $60m in liabilities against just $30m in assets, and confirm the loss of over $500m worth of Bitcoins, split between customers' balances (750,000 BTC) and company assets (100,000 BTC). Owner Mark Karpeles said, 'There was some weakness in the system, and the bitcoins have disappeared. I apologize for causing trouble.'"

16 of 465 comments (clear)

  1. Ha ha by BasilBrush · · Score: 5, Insightful

    And so the libertarian unregulated money dream dies.

    1. Re:Ha ha by Anonymous Coward · · Score: 5, Funny

      A little too soon son...
      As far as I know, the US dollar hasn't died yet.

    2. Re:Ha ha by Anonymous Coward · · Score: 5, Interesting

      For a start, I doubt you understand what FUD means.

      I also fear you didn't actually read the article, just summary borked by Slashdot "editing".

      I'm uncertain what they meant to say, but I guess they meant either "Bitcoin Foundation" (Karpeles was one of board members there and now resigned) or "Bitcoin exchange" (i.e. MtGox).

    3. Re:Ha ha by BasilBrush · · Score: 5, Funny

      Always a pleasure to say "I told you so" to people with objectionable belief systems.

    4. Re:Ha ha by Opportunist · · Score: 5, Insightful

      And as soon as someone dares to sell oil for anything but USDs, it will become obvious.

      The irony about it all is that it's probably going to be China that props the US up, considering that they have maybe the most to lose (right after the US themselves, of course) if the USD bubble pops.

      --
      We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
    5. Re:Ha ha by stinerman · · Score: 5, Insightful

      My toaster isn't worth as much as it was when I bought it, either.

      Money is supposed to be a medium of exchange, not an investment. If you believe that a zero inflation rate is a good thing, I suggest you take an introductory course in economics.

    6. Re:Ha ha by Dunbal · · Score: 5, Insightful

      And we need growth because? Growth is sustainable forever right? How about you think about things instead of just parroting them? Those who benefit from growth are governments and monopolies, because then they can increase their budgets or offset future losses without having to do anything at all. It's the low hanging fruit and that is all it is. One day, you run out of easy fruit and have to do work. Debauching the entire system in order to fool yourself that there is more easy fruit will soon bring the whole tree down on top of you. We are fast approaching population sizes and technological levels where exponential growth is no longer possible (or even desired). Why should our economics not reflect this?

      --
      Seven puppies were harmed during the making of this post.
  2. Legitimization by mkg · · Score: 5, Funny

    This debacle should only help legitimize bitcoin, as corruption surrounding the currency is now a public matter.

    1. Re:Legitimization by pla · · Score: 5, Informative

      This is like the 4th or 5th exchange that has gone bust, right?

      Actually more like 18, but MtGox counts as the first major exchange to fail. The rest of those amount to you or I throwing up an "exchange" as our CompSci101 project and then vanishing when they lost their shirts.

      The loss of MtGox definitely counts as a blow to Bitcoin, but as others will no doubt point out, it had already started "failing" months ago (when you have a good 20% price spread vs the next highest exchange and you don't see arbitrage occurring on a massive scale, you know you have a problem). Any fools with either USD or BTC left in Gox since the beginning of the year (and even before that) pretty much stopped paying attention and deserve what they got.

      And the effect on the BTC market since then bears that out - The price initially plummeted, but has already stabilized at 2/3rds its previous stable value. If anything, this counted (and still does, IMO) as a great opportunity to get in during a market correction and load up on deeply discounted BTC.

  3. Bitcoin did what? by LordLucless · · Score: 5, Insightful

    According to the Wall Street Journal, Bitcoin held an impromptu press conference that addressed recent rumors.

    Bitcoin held an impromptu press conference? Did the Dollar and the Peso attend as well?

    Oh, you mean Mt. Gox held an impromptu press conference. Yeah, well, whoever trusted an online card trading portal as if it were a bank deserves whatever they got, IMO.

    --
    Just because you're paranoid doesn't mean there isn't an invisible demon about to eat your face
    1. Re:Bitcoin did what? by Sockatume · · Score: 5, Informative

      This one's on me and not the editors, somehow I went from "the exchange's owner so-and-so" to "the exchange" to "Bitcoin" in the space of about half a cup of coffee. Although the image of the bitcoin network showing up in person is an amusing one.

      I'm annoyed with myself because the misconception that this is a Bitcoin issue and not a MtGox issue is one I try to dispel.

      --
      No kidding!!! What do you say at this point?
  4. Falkvinge et all investigaton suggests inside job by davecb · · Score: 5, Interesting

    The Gox Crater: Crowd Detectives Reveal Billion-Dollar Heist As Inside Job
    Thousands of volunteering and self-organizing detectives have been meticulously laying a puzzle that reveals the Gox billion-dollar heist as an inside job. As smoke clears on the implosion of the Empty Gox bitcoin exchange, thousands of people in the community committed to revealing the truth behind the stonewalling exchange. What was claimed first to be a technical problem, then an outside theft, has been conclusively determined that the MtGox management knew too much, too long ago, to have this be an ordinary case of theft.

    --
    davecb@spamcop.net
  5. This is actually good news by xiando · · Score: 5, Insightful

    Failed exchanges are supposed to die. This is how a free market is supposed to work. I have been warning against using MtGox since April 2013 and you can all go check my Bitcointalk posts to see that this is true. If you request a withdraw from an exchange and it suddenly takes two weeks instead of a few days before you get your money then it is time to get out. If the delay increases to four weeks then six then months then it's clearly time to not only get out but also warn others about this exchange. A whole lot of extremely stupid people ignored all the red flags and alarmbells and they lost money when this exchange went bankrupt. This is very good. A small percentage of the people who lost money at MtGox will learn from this and be more careful and picky as to where they place their money in the future. If you do not have control of the private keys of a Bitcoin then you don't have the Bitcoin, you have an IOU with someone who may or may not hold Bitcoin for you. The demise of MtGox will sadly make many of the idiots who lost money there cry for more government, more regulation and more fascism. Fascism is not a good solution, more personal responsibility is the solution. As I said, there were dozens of red flags yet people kept using this clowncar exchange. "but but but I can arbitrage because the price is 25% higher there" said a lot of people who ended up loosing their money. Well duh, why do you think that 25% premium was there in the first place, stupid? In short: Fools and their money are usually separated. If you can't bother to do five minutes of basic research of the place where you plan to place thousands or millions of dollars then you get what you deserve. This is, in my opinion, a good thing.

    --
    9/11: Never forget it was a false-flag operation
    1. Re:This is actually good news by BitZtream · · Score: 5, Insightful

      So what you're saying is that everyone is supposed to magically learn from this how to defend against the next exchange which does a better job of handling its theft so no one gets any red flags until its too late and they've take ALL of the money rather than just half of it? Is that what you're saying?

      This job was sloppy. The next one will be bigger (assuming a collapse doesn't occur this time, which I don't think it will, probably 1 or 2 more first) and probably not show any signs that its happening in advance.

      --
      Persistent Volume manager for Kubernetes - https://github.com/dwimsey/openshift-pvmanager
  6. Interesting attack on Bitcoin by wiredog · · Score: 5, Interesting

    From the AP Story

    a weakness in the exchange's systems was behind a massive loss of the virtual currency involving 750,000 bitcoins from users and 100,000 of the company's own bitcoins. That would amount to about $425 million at recent prices.

    The reactions of the various Japanese government officials are interesting. Essentially, there was no "theft" because Bitcoin is not a "real" currency. Which is an interesting attack. Anyone can steal your bitcoins and you have no recourse to the law because it isn't actually theft.

    --

    Best Slashdot Co
  7. Re:gambling by BasilBrush · · Score: 5, Insightful

    Real Bitcoin users don't keep their bitcoins in an exchange but on their device.

    No True Scotsman lost money on Bitcoin.