WHERE IS OUR MONEY: $473 Million In Bitcoins Vaporized As Mt. Gox Exchange Files Bankruptcy

“If you don’t hold it in your hand, there is always the possibility of counter party risk, as is clearly the case with the Mt. Gox Bitcoin debacle.”

By Mac Slavo at SHTF Plan –

Due to inherent problems within the exchange mechanism used to trade the Bitcoin crypto-currency, the Mt. Gox exchange has closed up shop and filed for bankruptcy. Some $473,000,000 worth of BTC has simply vanished in what could be one of the largest digital heists in history. Investigators in Japan are inquiring into the unregulated exchange and the U.S. Federal government is also looking into it, but because of the nature of Bitcoin itself the money is, for all intents and purposes, gone. The operator of the exchange Mark Karpelès, who may or may not be involved in the disappearance of user funds has apologized for “causing trouble.”

If you don’t hold it in your hand, there is always the possibility of counter party risk, as is clearly the case with the Mt. Gox Bitcoin debacle.

For a case study of a blistering rise and an absolutely epic fall of an exchange that i) was named after Magic: the Gathering and ii) transacted in a digital currency which many have speculated was conceived by the NSA nearly two decades ago and was used as a honeypot to trap the gullible, look no further than Mt.Gox which after halting withdrawals for the second (and final time) has finally done the honorable thing, and filed for bankruptcy. As the WSJ reports, “Bitcoin exchange Mt. Gox said Friday it was filing for bankruptcy protection after losing almost 750,000 of its customers’ bitcoins, marking the collapse of a marketplace that once dominated trading in the virtual currency. The company said it also lost around 100,000 of its own bitcoins. Together, the lost bitcoins would be worth approximately $473 million at market prices charted by the CoinDesk bitcoin index, although the price of Mt. Gox bitcoin had fallen well below that index after it stopped bitcoin withdrawals in early February.”

The punchline: speaking to reporters at Tokyo District Court Friday after the bankruptcy filing, Mt. Gox owner Mark Karpelès said technical issues had opened the way for fraudulent withdrawals, and he apologized to customers.

“There was some weakness in the system, and the bitcoins have disappeared. I apologize for causing trouble”

So $473 million Bitcoins disappear just like that? But you heard the man – he is sorry. So all is well – and why not: it works for the TBTF banks every day.

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