Major bitcoin exchange apparently goes bust, delivers blow to emerging virtual currency

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Associated Press

Posted on February 25, 2014 at 3:04 PM

Updated Tuesday, Feb 25 at 3:04 PM

TOKYO (AP) — One of the world's largest bitcoin exchanges appears to have collapsed.

A coalition of virtual currency companies says Tokyo-based Mt. Gox went under after secretly racking up catastrophic losses.

Mt. Gox's website wasn't functioning today. That follows the resignation Sunday of its CEO from the board of the Bitcoin Foundation, a group seeking legitimacy for the new form of money. The exchange had imposed a ban on withdrawals earlier this month.

Prominent supporters of bitcoin are seeking to shore up confidence in the currency by labeling Mt. Gox's collapse an isolated case of mismanagement.

Bitcoin has become popular among tech enthusiasts, libertarians and investors because it allows people to make transactions and exchange money across borders without involving banks, credit card issuers or other third parties. Criminals like bitcoin for the same reasons.

A number of large retailers such as Overstock.com have begun to accept it.

While it's hard to know just how many people around the world own bitcoins, speculative investors have sent the currency's value fluctuating wildly in recent months.

%@AP Links

129-a-15-(Kolin Burgess, British user of Mt. Gox, in AP interview)-"has been OK"-Kolin Burgess, who uses Mt. Gox, fears he's lost money tied up in Bitcoins and he accuses the online currency exchange of misleading clients. (25 Feb 2014)

<<CUT *129 (02/25/14)££ 00:15 "has been OK"

128-c-22-(Charles de Ledesma, correspondent)-"from government controls"-Correspondent Charles de Ledesma reports that the website of major Bitcoin exchange Mt. Gox is offline amid reports of a debilitating theft. (25 Feb 2014)

<<CUT *128 (02/25/14)££ 00:22 "from government controls"

127-v-34-(Charles de Ledesma, correspondent)--The website of the major bitcoin exchange Mt. Gox is offline amid reports it suffered a debilitating theft. It's a new setback for efforts to gain legitimacy for the virtual currency. Correspondent Charles de Ledesma reports. (25 Feb 2014)

<<CUT *127 (02/25/14)££ 00:34

APPHOTO NY114: FILE - This April 3, 2013 file photo shows bitcoin tokens in Sandy, Utah. The website of major bitcoin exchange Mt. Gox is offline Tuesday, Feb. 25, 2014, amid reports it suffered a debilitating theft, a new setback for efforts to gain legitimacy for the virtual currency. (AP Photo/Rick Bowmer, File) (3 Apr 2013)

<<APPHOTO NY114 (04/03/13)££

APPHOTO TOK102: Bitcoin trader Kolin Burges, right, of London and American Aaron (only his first name was given) hold protest signs as they conduct a sit-in in front of the office tower housing Mt. Gox in Tokyo Tuesday, Feb. 25, 2014. The website of major Bitcoin exchange Mt. Gox is offline Tuesday amid reports it suffered a debilitating theft, a new setback for efforts to gain legitimacy for the virtual currency. The URL of Tokyo-based Mt. Gox was returning a blank page. The disappearance of the site follows the resignation Sunday of Mt. Gox CEO Mark Karpeles from the board of the Bitcoin Foundation, a group seeking legitimacy for the currency. Burgess said he had picketed the building since Feb. 14 after flying in from London, hoping to get back $320,000 he has tied up with Mt Gox. (AP Photo/Kaori Hitomi) (25 Feb 2014)

<<APPHOTO TOK102 (02/25/14)££

APPHOTO NY110: FILE - In this Feb. 12, 2014 file photo, attendees of the Inside Bitcoins conference in Berlin examine Bitcoin buttons. The website of major Bitcoin exchange Mt. Gox is offline amid reports it suffered a debilitating theft of the virtual currency, and the URL of the Tokyo-based outfit returns a blank page on Tuesday, Feb. 25, 2014. (AP Photo/Frank Jordans, File) (12 Feb 2014)

<<APPHOTO NY110 (02/12/14)££

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