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mtgox-bitcoinA security breach at Mt. Gox, one of the primary bitcoin exchanges, has led the company to announce a halt on all transactions following massive losses – to the tune of 744,000 BTC, roughly $409,200,000.

Because Mt. Gox isn’t a bank, it’s unfortunate, but those affected really don’t have any recourse. A bank would be insured, but those who have lost their accounts are just left with exactly that – a loss.

The transaction closure was announced on the Mt. Gox site itself, and reads simply:

Dear MtGox Customers,

In light of recent news reports and the potential repercussions on MtGox’s operations and the market, a decision was taken to close all transactions for the time being in order to protect the site and our users. We will be closely monitoring the situation and will react accordingly.

Best regards,
MtGox Team

This is horrible news for those who had significant holdings in bitcoin, and a stark reminder that ANY type of financial exchange or institution requires extraordinary security. This is never more true than with new types of exchanges and currencies. It’s easy to fall into a trap of thinking that bitcoin isn’t real money, and doesn’t need the same level of security. It’s increasingly clear that that’s not the case.

(Via Forbes)

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About The Author

Avatar of Gord McLeod
Blogger & Editor at Large
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I'm a writer and game designer with a background covering everything from IT work to programming to the graphic arts. I'm intensely interested in everything game, gadget and science related. Find me at Fiction Improbable, my fiction writing website, at @gordmcleod on Twitter, and at my too.

5 Responses

  1. barth

    I hope the Winklevii didn’t spend all their Facebook money on bitcoin by now.

  2. Mark 'Rizzn' Hopkins

    The problem wasn’t a result of poor security (which Gox did struggle with over the years). The problem was ineptitude in the coding team and piss-poor accounting.

    We covered this in detail last night in detail at SiliconANGLE.
    Catch up on the news here:
    http://siliconangle.com/blog/2014/02/25/mtgox-trading-freeze-and-website-closure-aftermath-continues/
    http://siliconangle.com/blog/2014/02/24/coinbase-blockchain-info-and-other-high-profile-bitcoin-industry-executives-mtgox-is-insolvent/

    • Avatar of Gord McLeod
      Gord McLeod

      You’re absolutely correct, but these days, that is part of the security measures a service like Mt. Gox should have been implementing, and didn’t.

  3. Mike McDonald

    Bitcoin seems to be dying. From this latest theft to the huge rift between bitcoin users and the general public in terms of understanding and using bitcoin, not to mention the difficulty for the average new bitcoin user of securing their wallets, it’s all just too much. I don’t see how this ever works out in the long term. And I’m holding some bitcoin, so I say this knowing full well what I stand to lose if I’m right.

    • Avatar of Gord McLeod
      Gord McLeod

      I think may be too early to say that it’s dying, but it has definitely hit some dark days, and it’s only going to get worse before it gets better.