MtGox Files for Bankruptcy After Losing Nearly $500 Million in Bitcoin Currency

It's not as though crytocurrencies like Bitcoin are in need of any more bad publicity, though that being the case, it didn't stop MtGox from giving it to them. MtGox, formerly a popular Bitcoin exchange based in Tokyo, Japan, has filed for bankruptcy protection after admitting to having lost 850,000 Bitcoins worth approximately $477 million.

Most, if not all of the virtual currency was stolen by hackers who took advantage of what MtGox called "weaknesses in the system." Some 750,000 of those Bitcoins belonged to customers, while the remaining 100,000 units were MtGox's prior to the theft.

Bitcoin Magazine
Image Source: Flickr (zcopley)

This doesn't come as a complete shock considering MtGox froze withdrawals earlier in the month due to a bug in the software. Still, the heads up didn't soften the gut punch to customers who may have feared the worst, especially those who might have spent large sums of money investing in computer hardware capable of mining Bitcoins. These days, it's decidedly more difficult to dig up the virtual currency.

Critics of crytpocurrencies are using MtGox's misfortune as support for their arguments that Bitcoins and others like it should be banned, while others feel the industry needs regulation. Those who support the Bitcoin movement, however, are unfazed by this event and claim the virtual currency itself is not the problem, as opposed to MtGox's mishandling of them.


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