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

    Water Scarcity Could Push Conflict, Migration by 2050

    Warning comes in a new report from the World Bank titled "High and Dry: Climate Change, Water and the Economy"

    What Your First Name Says About Who You Support for President

    Bobby, Betty and Curtis tend to support Donald Trump while people named Juan, Liz or Mohammad are more likely to lean toward Hillary Clinton

    South Pole Diary: In Round-the-clock Darkness, Radiant Moon Shines Like the Sun

    You hear more and see more when the moon first comes out; it’s your senses in overdrive, tuning into a new world.

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Displaced By War, Syrian Artist Finds Inspiration Abroadi
    X
    May 02, 2016 1:36 PM
    Saudi-born Syrian painter Mohammad Zaza is among the millions who fled their home for an uncertain future after Syria's civil war broke out. Since fleeing Syria, Zaza has lived in Lebanon, Egypt, Jordan and now Turkey where his latest exhibition, “Earth is Blue like an Orange,” opened in Istanbul. He spoke with VOA about how being displaced by the Syrian civil war has affected the country's artists.
    Video

    Video Displaced By War, Syrian Artist Finds Inspiration Abroad

    Saudi-born Syrian painter Mohammad Zaza is among the millions who fled their home for an uncertain future after Syria's civil war broke out. Since fleeing Syria, Zaza has lived in Lebanon, Egypt, Jordan and now Turkey where his latest exhibition, “Earth is Blue like an Orange,” opened in Istanbul. He spoke with VOA about how being displaced by the Syrian civil war has affected the country's artists.
    Video

    Video Ethiopia’s Drought Takes Toll on Children

    Ethiopia is dealing with its worst drought in decades, thanks to El Nino weather patterns. An estimated 10 million people urgently need food aid. Six million of them are children, whose development may be compromised without sufficient help, Marthe van der Wolf reports for VOA from the Metahara district.
    Video

    Video Little Havana - a Slice of Cuban Culture in Florida

    Hispanic culture permeates everything in Miami’s Little Havana area: elderly men playing dominoes as they discuss politics, cigar rollers deep at work, or Cuban exiles talking with presidential candidates at a Cuban coffee window. With the recent rapprochement between Cuba and United States, one can only expect stronger ties between South Florida and Cuba.
    Video

    Video California Republicans Weigh Presidential Choices Amid Protests

    Republican presidential candidates have been wooing local party leaders in California, a state that could be decisive in selecting the party's nominee for U.S. president. VOA's Mike O’Sullivan reports delegates to the California party convention have been evaluating choices, while front-runner Donald Trump drew hundreds of raucous protesters Friday.
    Video

    Video Kurdish Football Team Helps War-Torn City Cope

    With the conflict still raging across much of Turkey’s predominantly Kurdish southeast, between the rebel PKK and the Turkish state, many Kurds are trying to escape the turmoil by focusing on the success of their football team Amedspor in Diyarbakir. The club is increasingly becoming a symbol for Kurds, not only in Diyarbakir but beyond. Dorian Jones reports from southeast Turkey.
    Video

    Video ‘The Lights of Africa’ - Through the Eyes of 54 Artists

    An exhibition bringing together the work of 54 African artists, one from each country, is touring the continent after debuting at COP21 in Paris. Called "Lumières d'Afrique," the show centers on access to electricity and, more figuratively, ideas that enlighten. Emilie Iob reports from Abidjan, the exhibition's first stop.
    Video

    Video Pakistani School Helps Slum Kids

    Master Mohammad Ayub runs a makeshift school in a public park in Islamabad. Thousands of poor children have benefited from his services over the years, but, as VOA's Ayesha Tanzeem reports, roughly 25 million school-age youths don't get an education in Pakistan.
    Video

    Video Florida’s Weeki Wachee ‘Mermaids’ Make a Splash

    Since 1947, ‘mermaids’ have fascinated tourists at central Florida’s Weeki Wachee Springs State Park with their fluid movements and synchronized ballet. Performing underwater has its challenges, including cold temperatures and a steady current, as VOA’s Lin Yang and Joseph Mok report.
    Video

    Video Somali, African Union Forces Face Resurgent Al-Shabab

    The Islamic State terror group claimed its first attack in Somalia earlier this week, though the claim has not been verified by forces on the ground. Meanwhile, al-Shabab militants have stepped up their attacks as Somalia prepares for elections later this year. Henry Ridgwell reports there are growing frustrations among Somalia’s Western backers over the country’s slow progress in forming its own armed forces to establish security after 25 years of chaos.
    Video

    Video Documentary Tells Tale of Chernobyl Returnees

    Ukraine this week is marking the 30th anniversary of the world's worst nuclear accident, at the Chernobyl nuclear power plant. Soviet officials at first said little about the accident, but later evacuated a 2,600-square-kilometer "exclusion zone." Some people, though, came back. American directors Holly Morris and Anne Bogart created a documentary about this faithful and brave community. VOA's Tetiana Kharchenko reports from New York on "The Babushkas of Chernobyl." Carol Pearson narrates.
    Video

    Video Nigerians Feel Bite of Buhari Economic Policy

    Despite the global drop in the price of oil, Nigerian President Muhammadu Buhari has refused to allow the country's currency to devalue, leading to a shortage of foreign exchange. Chris Stein reports from Lagos businessmen and consumers are feeling the impact as the country deals with a severe fuel shortage.
    Video

    Video  Return to the Wild

    There’s a growing trend in the United States to let old or underused golf courses revert back to nature. But as Erika Celeste reports from one parcel in Grafton, Ohio, converting 39 hectares of land back to green space is a lot more complicated than just not mowing the fairway.

    Special Report

    Adrift The Invisible African Diaspora

    World Currencies

    EUR
    USD
    0.8700
    JPY
    USD
    106.56
    GBP
    USD
    0.6808
    CAD
    USD
    1.2518
    INR
    USD
    66.404

    Rates may not be current.