Another nail in the coffin for Bitcoin as Mt Gox hacked and looted

Bitcoin, the popular virtual currency saw another nail hammered into the coffin today after news broke that Mt Gox, one of the world’s most popular Bitcoin exchanges had their website hacked and rumours are circulating that $375 million worth of the currency was allegedly stolen.

Mt Gox stopped functioning on Tuesday morning, with visitors to its website finding an empty page. It follows the exchange halting cash withdrawals and its chief executive Mark Karpeles stepping down from the board of the Bitcoin foundation, which oversees the virtual currency.

Mt Gox has been mired in problems ever since 7th February, when it halted withdrawals from its trading accounts. The company’s computer programmers hadn’t accounted for a quirk in the way Bitcoin works, allowing cyber attackers to dupe Mt Gox with a scheme resembling receipt fraud.

When Mt Gox discovered it was under attack, it stopped any investors from pulling their money out of their trading platform, but it has yet to allow them access to their money.

Bitcoin in a Flux
The image of Bitcoin would undoubtedly take a major hit if the situation gets worse for Mt Gox. Having the exchange shut down would rock confidence in the digital currency’s future.

Evan Rose, president of Bitcoin ATM company Genesis, said that the kinds of problems seen at Mt Gox and other exchanges show that Bitcoin is in flux.

“The people running the systems right now are not necessarily business men,” Rose said. “For the most part, they’re people who came into this digital project without grasping the value or risk of it. The ecosystem is maturing, but it’s a little scary for everyone involved.”

Mt Gox not long ago claimed to be the largest of the online Bitcoin exchanges, but began to run into problems in the fall of last year when customers started to report long delays being able to withdraw funds from accounts.

Earlier this month Russia also cracked down on Bitcoin. The Moscow authorities pointed to the risks of money laundering and financing terrorism, declaring that cyber currencies are money substitutes and “cannot be used by individuals or legal entities”.

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Another nail in the coffin for Bitcoin as Mt Gox hacked and looted