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How Mt.Gox went down

February 26, 2014 in Bitcoin, Investing, News, Virtual currency

By Jose Pagliery  @Jose_Pagliery February 26, 2014 (http://money.cnn.com/)

NEW YORK (CNNMoney)

Bitcoin skeptics say the digital currency is doomed. They’re wrong. But the failure of Mt.Gox shows the agony of an evolving industry without any government oversight and led by tech entrepreneurs with zero financial experience.

The shutdown of Mt.Gox — one of the world’s largest bitcoin exchanges — and the potential loss of more than $350 million worth of bitcoins is the result of abysmal mismanagement at the company.

By its own account, Mt.Gox collected only $380,450 in revenue during most of 2012. The next year, U.S. government agents seized $5 million from its accounts. Such a massive loss would cripple any business, but Mt.Gox remained open in Tokyo, taking people’s cash for bitcoins.

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