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I Sense a disturbance in Bitcoin-land

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  • I Sense a disturbance in Bitcoin-land

    Has crashed from a high of ~$900 to as low as $75 (currently at ~$130).

    The largest exchange (handling 90%+ of trades), Mt. GOX, is under investigation for fraud and ties to the drug trade. Suspends trading. Suspends withdrawals (even of USD). Has moved its "corporate office". CEO has bailed. Media information being deleted (virtual paper shredding party!).

    Basically, looks like Mt.Gox has stolen all the money and bitcoins that it stored, or is perhaps just completely incompetent. Can't really tell which.*ed-1529946212

    And all the kiddies realizing how badly they are screwed:

    I know I am immensely surprised that a site that was originally a Magic: The Gathering game card trading website is not a shining example of trustworthiness and competence!.

  • #2


    • #3
      Looks like incompetency:

      "Mt. Gox, once the world’s largest bitcoin exchange, has gone offline, apparently after losing hundreds of millions of dollars due to a years-long hacking effort that went unnoticed by the company.

      The hacking attack is detailed in a leaked “crisis strategy draft” plan, apparently created by Gox and published Monday by Ryan Selkis, a bitcoin entrepreneur and blogger (see below). According to the document, the exchange is insolvent after losing 744,408 bitcoins — worth about $350 million at Monday’s trading prices. The plan paints a bleak picture of the exchange’s finances and outlines an arbitrage scheme to restore the exchange to solvency. “The reality is that Mt. Gox can go bankrupt at any moment, and certainly deserves to as a company,” the document states."

      "Now, according to the alleged leaked document, it looks like hackers had been exploiting that bug for two years, and even removing bitcoins from supposedly secure “cold” wallets that the company had stored offline. Typically, cold wallets are disconnected from the internet and cannot be emptied by online attackers. However, the “cold storage has been wiped out due to a leak in the hot wallet,” the document states."
      Last edited by Fedaykin; 02-25-2014, 02:04 AM.