Speculation about the shutdown of popular virtual money exchange Mt Gox last week has been confirmed by its Chief Executive, Mark Karpeles, at a news conference in Japan, euronews said in a report. Totally out of his casual element, Karpeles spoke to reporters donning a suit and tie as opposed to his signature apparel of t-shirt and jeans.
"First of all, I'm very sorry. The bitcoin industry is healthy and it is growing. It will continue, and reducing the impact is the most important point," Karpeles said. Euronews stated in its report that the exchange lost 850,000 bitcoins due to a weakness in Mt Gox's system, prompting the company to stop withdrawals, shutter the website down and filing for bankruptcy over the course of a few weeks. CNet said tha loss is valued at around $500 million in trading value.
Bitcoin has been touted as a good commodity investment due to its powerful global transaction network, store of value and usefulness as an easy medium of exchange, Quartz said in a report. Euronews stated that the total worth of minted bitcoins is currently at $7 billion. The loss of the bitcoins at Mt Gox has not only earned the ire of its investors, but worry about the capability of the virtual currency to turn into a more reliable form of investment.
American Banker wrote, "While Bitcoin does not have the same credit card chargeback risk, a hypothetical evolution into a widely accepted payment option would expose the payment system to increased risk of transaction fraud, given the inevitability of buyer/seller disputes."
Like setbacks in many investments, Bitcoin supporters claim that the virtual currency is here to stay. Noting a provision in a March 2 notice published on Mt Gox's website, CNet said that the exchange has set up a dedicated call center to address all concerns about Bitcoin, open on Monday through Friday, 10AM to 5PM Japan time.
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