News / Economy

Investors Worried After Largest Bitcoin Exchange Goes Dark

FILE - Mike Caldwell, a 35-year-old software engineer, holds a 25 Bitcoin token at his shop in Sandy, Utah.
FILE - Mike Caldwell, a 35-year-old software engineer, holds a 25 Bitcoin token at his shop in Sandy, Utah.
David Byrd
Japanese officials are studying ways to regulate the virtual currency Bitcoin after a prominent Tokyo-based trading house shut down suddenly on Tuesday. The unexpected closure of the Mt. Gox exchange is the latest setback in the currency’s attempts to gain worldwide acceptance.
 
In a packed news conference, Japan’s Chief Cabinet Secretary Yoshihide Suga said authorities - including the Japanese Financial Services Agency, Finance Ministry and the police - are looking into Bitcoin trading in Japan.
 
“Regarding the concerned issue, I am aware that the related ministries, such as the Financial Services Agency, the Economic Ministry and the Finance Ministry, are gathering information. If necessary, I believe they will act on this once they have the grasp of the situation. But at this point, they are still gathering more facts and information,” said Suga.
 
The sudden disappearance of Mt. Gox - once one of the largest Bitcoin exchanges - has dealt a blow to the credibility of the virtual currency.  Earlier this month, Mt. Gox imposed a ban on withdrawals. On Sunday, CEO Mark Karpeles resigned from the board of the Bitcoin Foundation, which seeks wider acceptance of the currency.  Tuesday, the Mt. Gox website was blank, with only a brief statement to investors.
 
Reports emerged that the company had lost more than 750,000 Bitcoins due to what was called transaction malleability. Hackers were able to discover that they could track Mt. Gox’s software by creating a Bitcoin transaction and then changing its identifying codes. Funds were taken from Mt. Gox, but because its computers were looking for the old identifying code, the losses went unnoticed.
 
Several other Bitcoin exchanges issued statements Tuesday that said they are working to reestablish the currency’s credibility. 
 
Nonetheless, Bitcoin’s future remains questionable.  Emily Spaven, the Managing Editor of Coin Desk, told the Associated Press that Mt. Gox’s failure will probably lead to more government oversight of the virtual currency.
 
“I think what we’ll see from this is that governments will try and enforce some kind of regulation because, as we’ve discovered, there’s around $350 million worth of bitcoins that have been stolen.  So that’s a lot of money to go missing, so I’m pretty sure that governments will try and step in to protect their citizens from suffering something like this again,” said Spaven.
 
Moshe Cohen, an Assistant Professor of Finance and Economics at the Columbia Business School, told AP that this incident could have one of two results for Bitcoin.
 
“One of two things will happen: either the Bitcoin community will convince us that it is a one off, and a new form of maybe partially regulated exchange can solve these problems and take the good and get rid of the bad, or people will start losing faith,” said Cohen.
 
Several large firms- including Overstock.com, Zynga, the online retailer TigerDirect and the National Basketball Association’s Sacramento King’s team - have announced they will accept Bitcoins. Billionaire Richard Branson has announced his Virgin Galactic will accept Bitcoin for space flights.
 
As of this writing, Bitcoin’s value was nearly back to where it was when the Mt. Gox crisis began. It may be that Mt. Gox’s will help Bitcoin in the long run by eliminating an unsound player from the virtual currency game.

You May Like

Pundits Split Over Long-Term US Role in Afghanistan

Security pact remains condition for American presence beyond 2014; deadline criticized More

US Eyes Islamic State Threat

Officials warn that IS could pose a threat to US homeland More

Video Ukraine: Captured Troops Proof of Russian Role in Separatist Fight

Moscow says Russian troops crossed into Ukrainian territory by mistake More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Scientists Unlock Mystery of Bird Flocksi
X
George Putic
August 25, 2014 4:00 PM
How can flocks of birds, schools of fish or herds of antelope suddenly change direction -- all the individuals adjusting their movement in concert, at seemingly the same time? British researchers now have some insights into this behavior, which has puzzled scientists for a long time. VOA's George Putic has more.
Video

Video Scientists Unlock Mystery of Bird Flocks

How can flocks of birds, schools of fish or herds of antelope suddenly change direction -- all the individuals adjusting their movement in concert, at seemingly the same time? British researchers now have some insights into this behavior, which has puzzled scientists for a long time. VOA's George Putic has more.
Video

Video Ukraine: Captured Troops Proof of Russian Role in Separatist Fight

Ukrainian officials say they have captured Russian soldiers on Ukrainian territory -- the latest accusation of Moscow's involvement in the conflict in eastern Ukraine. VOA's Gabe Joselow reports from the Ukrainian side of the battle, where soldiers are convinced of Russia's role.
Video

Video Rubber May Soon Come From Dandelions

Synthetic rubber has been around for more than a century, but quality tires for cars, trucks and aircraft still need up to 40 percent or more natural rubber content. As the source of natural rubber, the rubber tree, is prone to disease and can be affected by bad weather. So scientists are looking for replacements. And as VOA’s George Putic reports, they may have found one in a ubiquitous weed.
Video

Video Jewish Life in Argentina Reflected in Yiddish Tango

Jewish people from across Europe and Russia have been immigrating to Argentina for hundreds of years. They brought with them dance music that were eventually mixed with Argentine tango. The result is Yiddish tango -- a fusion of melodies and cultural experiences that is still evolving today. Elizabeth Lee reports from the Skirball Cultural Center in Los Angeles, where one band is bringing Yiddish tango to an American audience.
Video

Video Peace Returns to Ferguson as Community Tries to Heal

Thousands of people nationwide are expected to attend funeral services Monday in the U.S. Midwestern city of St. Louis, Missouri, for Michael Brown, the unarmed African-American teenager who was fatally shot by a white police officer August 9 in the St. Louis suburb of Ferguson. The shooting touched off days of violent demonstrations there, resulting in more than 100 arrests. VOA's Chris Simkins reports from Ferguson where the community is trying to move on after weeks of racial tension.
Video

Video Meeting in Minsk May Hinge on Putin Story

The presidents of Russia and Ukraine are expected to meet face-to-face Tuesday in Minsk, along with European leaders, for talks on the situation in Ukraine. Political analysts say the much welcomed dialogue could help bring an end to months of deadly clashes between pro-Russia separatists and Ukrainian forces in the country's southeast. But much depends on the actions of one man, Russian President Vladimir Putin. VOA's Daniel Schearf reports from Moscow.
Video

Video Artists Shun Russia's Profanity Law

Russia in July enacted a law threatening fines for publicly displayed profanity in media, films, literature, music and theater. The restriction, the toughest since the Soviet era, aims to protect the Russian language and culture and has been welcomed by those who say cursing is getting out of control. But many artists reject the move as a patronizing and ineffective act of censorship in line with a string of conservative morality laws. VOA's Daniel Schearf reports from Moscow.
Video

Video British Fighters on Frontline of ISIS Information War

Security services are racing to identify the Islamic State militant who beheaded U.S. journalist James Foley in Syria. The murderer spoke English on camera with a British accent. It’s estimated that several hundred British citizens are fighting for the Islamic State, also called ISIL or ISIS, alongside thousands of other foreign jihadists. Henry Ridgwell reports for VOA from the center of the investigation in London.

AppleAndroid

World Currencies

EUR
USD
0.7537
JPY
USD
103.79
GBP
USD
0.6032
CAD
USD
1.0957
INR
USD
60.522

Rates may not be current.