MtGox Declares bankruptcy becoming MtGotcha

Image.ashxMark Karpeles the CEO of MtGox  filed for bankruptcy in Japan where MtGox is based.

Originally a site for trading Magic the Gathering (MTG) cards, Karpeles purchased the exchange shortly after it was converted to a Bitcoin trading site. MtGox under the ownership of Karpeles became the largest Bitcoin Exchange in the world handling 70% of Bitcoin trades.

For more than six months there have been complaints of extraordinary delays in cash payment for bitcoin on the exchange. This fueled rumors leading many to believe there were no actual funds available, and that the site was manipulating the price of Bitcoin and taking large speculative positions rather than simply being a exchange fee collector.

On 24 February 2014 MtGox announced it had lost 744 thousand Bitcoins due to previously undetected frauds. This would be worth 372 million dollars, 16 times the value of the company, its unlikely that such a large fraud would go undetected for such a long time in a highly computerized business with only 10 employees. MtGox’s problems have been known internally for some time and exacerbated to damage to the Bitcoin community by trading while insolvent for some time. It seems highly likely this was a deliberate fraud by one or more insiders.

More than 100,000 people have been left with a loss by dealing with MtGox 90% of them outside Japan.

So MtGox is gone and has left a massive dollar hole in the Bitcoin market, which all goes to show centralized control of a currency is the real problem.

http://www.theguardian.com/technology/2014/feb/28/bitcoin-mtgox-bankruptcy-japan

Dogecoins value and trade volume have been unaffected by the controversy reported a Shiba Inu spokesman.

Posted on March 2, 2014, in Bitcoin, Corporations, Economics & Finance, Kapitalism, Legal cases, Monetary system and tagged , , , . Bookmark the permalink. Leave a comment.

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