Almost Half a Billion Worth of Bitcoins Vanish
Mt. Gox Says It Lost 750,000 of Customers' Bitcoin to Fraud

By
Robin Sidel, Eleanor Warnock and Takashi Mochizuki
Updated Feb. 28, 2014 7:16 p.m. ET

Mt. Gox, once the dominant exchange for bitcoin trading, on Friday said more than $470 million of the virtual currency vanished from its digital coffers, kicking into high gear a search for the missing money by victims and cybersleuths.

Bitcoin exchange Mt. Gox said it was filing for bankruptcy protection and that 750,000 of its customers' bitcoins had been lost. Is the end of the crypto-currency or merely growing pains? Columbia Business School assistant professor Moshe Cohen discusses on MoneyBeat.

Acting alone and in groups, the people stepped up their efforts after Mt. Gox filed for bankruptcy protection in Japan and confirmed rumors it had lost almost 750,000 of its customers' bitcoins, as well as roughly 100,000 of its own.

Mt. Gox Chief Executive Mark Karpelès said technical issues had opened the way for fraudulent withdrawals, though he didn't provide details.
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It wasn't clear whether or how the missing bitcoins would be found. Bitcoin's underlying software code, known in developer circles as "the protocol," is believed to keep track of every transaction using a special marker that can be traced via an online ledger.

Unlike cash, which might be difficult to track if it is stolen from a bank vault and then widely dispersed, bitcoin transactions are logged in the ledger, which essentially can be accessed by anyone with a computer.

Some computing experts believed any hackers might be capable of covering the tracks of a potential computer break-in. But if each bitcoin has a marker, it would make it more difficult for thieves to try to convert a big stash into another currency, in the same way it would be difficult for an art thief to pawn off a pilfered Matisse painting quickly
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