The Largest Bitcoin Exchange Was Possibly the Target of a $350 Million Theft

The Largest Bitcoin Exchange Was Possibly the Target of a $350 Million Theft

Mt. Gox, the world's largest Bitcoin trading site, has gone offline as rumors that more than 744,000 bitcoins were stolen from the service during an infiltration that went unnoticed by the service for years. As of Monday, the estimated losses are said to be worth at least $350 million.

According to a leaked document, which has not been verified but is circulating widely among Bitcoin proponents, a bug in the bitcoin wallet software allowed hackers to steal the digital currency, even from offline "cold storage." The 744,000 stolen bitcoins total about 6 percent of the 12.4 million currently in circulation, and about 3.5 percent of the eventual 21 million.

Bitcoin values on Mt. Gox have dropped 40 percent in the past 24 hours, and prices on Bitstamp, the most prominent exchange filling the void left by Gox, is boasting prices $100 higher on its exchange.

From part of the leaked document:

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The likely damage in public perception to this class of technology could put it back 5~10 years, and cause governments to react swiftly and harshly. At the risk of appearing hyperbolic, this could be the end of Bitcoin, at least for most of the public.

Mt. Gox is, as of right now, offline, after suspending withdrawals earlier this month over security concerns. On Sunday, the site's chief executive stepped down from his board position on the Bitcoin foundation.

A joint statement on the collapse of Mt. Gox from a handful of other prominent Bitcoin companies attempted to reassure investors that bitcoin was still a viable currency:

This tragic violation of the trust of users of Mt. Gox was the result of one company’s abhorrent actions and does not reflect the resilience or value of bitcoin and the digital currency industry. There are hundreds of trustworthy and responsible companies involved in bitcoin.

While the document about Mt. Gox's woes could not be confirmed as legitimate, the Bitcoin Foundation is preparing for the exchange's closure anyway. Exactly what will happen to bitcoins held by the service is unclear.

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