Mt. Gox is Mt. Gone

The Bitcoin exchange has filed for bankruptcy protection.

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You can’t say no one didn’t see this coming. It wasn’t a matter of if, it was a matter of when. Mt. Gox has filed for bankruptcy protection in Japan after losing what has been validated at 750K customer owned Bitcoins and 100K Bitcoins of its own. The losses represent approximately $474M based on a Bitcoin price of $558.

Mt. Gox has ¥6.5 billion in outstanding debt. Approximately ¥2.8 billion in cash cannot be accounted for.

“I am deeply sorry,” Mt. Gox CEO Mark Karpeles told reporters in Japanese, offering a ritual bow of apology. “There were weaknesses in the system.” The website, mtgox.com remains off line.

While Gox is apologetic, other investors are seeking justice. One investor, declining to be recognized, said, “This is not just a civil matter. They knew they had lost these coins and continued to operate the exchange and accept deposits. You can’t sell something you don’t have and not be committing fraud.” Other investors are alleging that the bug that was exploited to misappropriate all the funds was something that had been well known in the Bitcoin community for years.

However, the issue appears more clouded and much more complicated than a mere hack. Kenji Saito, an assistant professor at the Graduate School of Media and Governance at Japan’s Keio University indicated that, “the [bug] is too small [of an exploit] to shut down one of the largest Bitcoin exchanges in the world. Rather, it must be that Mt. Gox has [been defrauding] its customers, [well in advance of the] February 2014 [announcement].”

Japanese authorities are conducting an investigation of Mt. Gox, following is closure.

In the US, Gox was subpoenaed by Federal prosecutors in New York. According to an unidentified source for the Wall Street Journal, Gox has been asked to preserve specific documentation. The US Attorney’s office in the Southern District of New York declined commenting, citing the ongoing investigation.

Now… I’ve heard a lot of speculation from a number of people here at the office saying that crypto-currencies are all going to die and this is the end of Bitcoin, Dogecoin, etc. While I’m certain that would make many international governments very happy (Bitcoin is a universal currency, and largely unregulated), I am not entirely certain that it’s going to kill the commodity. However, it certainly hasn’t done Bitcoin any favors; and its likely made its universal acceptance that much more difficult as well as pushed that possibility further out into the future.

What do you think? Did Mt. Gox defraud its investors and customers? Were they aware of the vulnerability in their systems and ignored it; or were they caught off guard? What about the ¥2.8 billion in missing cash? What’s going to happen to crypto and other digital currencies? Please tell me what you think in the discussion area, below. I’d love to hear your opinions on the matter.

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Someone Glammed my Bitcoin Wallet

Mt. Gox gets fleeced and closes its door due to a $350M 5-finger discount…

BitcoinVirtual currencies are very fragile.  Well, I shouldn’t say fragile. I should really say, volatile.  The currency fluctuates so violently its hard to determine what its value will be from one day to the next.  The one thing that’s brought the fledgling currency the most stability has been the largest bitcoin exchange in the world – Mt. Gox.  Unfortunately, Mt. Gox is no more.

Bitcoin’s run may be at an end.

Mt. Gox, apparently now insolvent, lost 744,408 bitcoins worth about $350M at the time of the initial report, which was Monday 2014-02-24.  Mt. Gox, like any other commodity exchange, can go belly-up at any moment. Its simply the nature of commodity trading. Markets can tip bearish or bullish on a whim, and its not easy to figure out which way the wind is blowing. However, this wasn’t the result of a glut in trading or from any other trading action. Mt. Gox was hacked, plain and simple.

Described as the worst run business in history, Gox initially got itself in trouble with US authorities I 2013. They seized $5M in US-based assets as a result of Gox’s failure to obtain the necessary money transferring permits. Since then, the news has been rife with reports of customers waiting months and months to withdrawal bitcoins as US dollars.  Early in February 2014. Mt. Gox suspended all withdrawals, indicating a bitcoin wallet bug as the culprit.

Instead, it appears that the exchange has been the victim of a two year long hack where both its hot (online) and cold (off line) wallets have been emptied.  How does an organization that deals in money transfers and in the trading of any kind of commodity NOT know if its having its coffers fleeced?!

What’s worse is that Charlie Shrem, the CEO of U.S. bitcoin exchange Bitinstant, was arrested on money laundering charges. Both Shrem and Gox CEO Mark Karpeles sat on the board of the Bitcoin Foundation, a lobbying agency and software development organization for bitcoin.  Both men have stepped down from their seats. Unfortunately, with Gox’s closure and the scandal at Bitinstant, its unclear if this digital commodity will be able to recover.

According to the Mt. Gox website, the organization states that Karpeles is still in Japan and is working hard to resolve the issue.  They ask that no one asks the Mt. Gox staff any questions, as they aren’t authorized to speak for the organization.  You can also read the original message which explains that the organization has shuttered its doors. The site instructs users and those interested to check back periodically to insure that they have the latest information, which will be posted on that page.

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Play and manage your music collection with MusicMatch JukeBox

Back in the day, “in the dark time…before the Empire,” I remember using a Diamond Multimedia MP3 player to listen to a new kind of music format, called MP3’s. Armed with a 8MB memory card, I was able to put about eight to ten songs on it before it filled up. I remember using this thing for about 4 or so years before I broke down and bought my first iPod. In the early days, before iTunes, MusicMatch JukeBox was the thing. It’s still around and still a decent MP3 player for your Windows PC.

MusicMatch JukeBox is a digital audio player which features a playlist library, CD ripping, and CD playback.  Its latest versions also touted online radio streaming and an online music store. The application has been around since 1992; and was originally developed by its founding company MusicMatch. Early versions only included simple jukebox features before becoming more advanced in later versions to include the ability to record mp3s from vinyl, cassette or microphone source.

MusicMatch JukeBox is compatible for Windows NT/98/2000/XP.  It is possible to install MusicMatch JukeBox 10.0 on Windows 7; but only if you install the program in XP compatibility mode.  Most users consider any version prior to when Yahoo! acquired MusicMatch JukeBox as a preferred version.  Yahoo! incorporated too many changes leading to the software becoming bloated and confusing. MusicMatch JukeBox was discontinued in 2008.

MusicMatch JukeBox is old and a bit long in the tooth.  However, on older, underpowered systems that run XP or earlier, this is probably the best music player available. Stay away from Yahoo! powered versions of the app, as they are bloated and problematic. Your best bet is to use version 7.5, as it was the best one, prior to the Yahoo! acquisition.

download MusicMatch JukeBox

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