Mt. Gox Files For BankruptcyFri, Feb 28, 2014 - 7:27 PM
Recently we wrote about how the massive bitcoin provider Mt. Gox had recently come under some serious problems, well now it seems that those issues have come to fruition with Mt. Gox officially filing for bankruptcy. The move comes several days after Mt. Gox had been taken offline. Additionally on Tuesday the head of the exchange had said he was working hard to find a solution to the problems plaguing the provider. Well it seems that his solution was a bankruptcy filing.
This move is also coming on the heels of a US subpoena by regulators, as well as the disclosure that Mt. Gox was operating with a debt of 6.5 billion Yen ($63.7 million).
Few details have emerged regarding what exactly happened with the company, but some reports have suggested that the site closure was associated with the theft of almost 750,000 bitcoins ($351 million) because of a problem with its security. Not much is known at the time what will happen to the people who still have currency with Mt. Gox.
However, the effects of the failure of Mt. Gox have much wider implications than just one beleaguered Japanese company. The entire bitcoin market has been widely affected, with the price of the digital currency dropping to $561 per coin, down from their peak of over $1000 in November 2013. In addition to the devaluation of currency, Vietnam has banned its banks from accumulating digital currency because they do not view it as legal tender and also assert that bitcoins have too high of a risk associated with them.
While the impact of the withdrawal of Vietnamese money will probably be minor, the implication that the currency may be banned is probably disconcerting for many bitcoin users.