The collapse of a major bitcoin exchange and the apparent disappearance of several hundred million dollars worth of digital coinage have exposed the virtual currency’s security flaws, damaged its credibility and shaken its supporters to the core.
Tokyo-based Mt. Gox, which helped turn the currency into a tradeable commodity and until recently was the world’s largest bitcoin exchange, has gone dark after halting all trading late Monday. Depositors have not been able to withdraw funds, and many fear they will never see their money again, amid unconfirmed reports that nearly 750,000 bitcoins have been siphoned from client accounts by cyber-thieves. At current prices, that would represent a loss of more than $360-million (U.S.).