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Shutdown of Mt. Gox Rattles Bitcoin Market

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

Closure Raises Concern About the Future of Unregulated Virtual Currency

By Robin Sidel, Michael J. Casey and Eleanor Warnock. February 25th, 2014 (http://online.wsj.com/)

The virtual currency bitcoin suffered the biggest setback in its five-year history after a major exchange shut down on Tuesday, stoking concern about the future of a digital form of money traded by professional investors and ordinary people, but regulated by no one.

The abrupt closure of Tokyo-based Mt. Gox underscored the risks of a virtual currency that has seen a meteoric rise in the past year. Unlike a U.S. bank failure, in which deposits are insured by the government, there may be little recourse for people whose money is locked up in the shuttered exchange.

Federal prosecutors in Manhattan subpoenaed Mt. Gox this month, asking the bitcoin concern to preserve certain documents, among other things, according to a person familiar with the matter.

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