Never a Dull Moment for Bitcoin !

These days I seem to come across news about Bitcoin every time I go on the web, and this week has been no exception. Here’s a quick round up of what’s been happening over the past few days.

Mark Karpeles Has Web Accounts Hacked

It hasn’t been a good week for Mark Karpeles – the CEO of collapsed bitcoin exchange MtGox – as it emerged that he has had some of his web accounts hacked.

Mark Karpeles - MtGox CEO

Mark Karpeles – MtGox CEO

Following the closure of MtGox in February, there has been growing frustration from people who have lost money due to MtGox’s collapse, over the recent actions (or lack of) of the company. Some people have claimed that Mr Karpeles lied about the number of bitcoins MtGox had before it filed for bankruptcy. As a result, hackers have stolen account transaction information belonging to Mr Karpeles.

It is claimed that the stolen information shows a ledger balance of 951,116 bitcoins, which is over 100,000 more than Mr Karpeles claimed was stolen from his exchange when he filed for bankruptcy protection in Japan on 28 February.

Many have called on MtGox to release more information about what has happened to the lost bitcoins as there has been no activity in the blockchain (the central list of buying and selling that underpins the entire Bitcoin network) suggesting they have been traded.

MtGox Wins Temporary Bankruptcy Protection in the US

Following the recent collapse of the MtGox bitcoin exchange and its subsequent filing for bankruptcy, a US judge has given the firm temporary bankruptcy protection. What this means is that the firm’s assets are protected and two US lawsuits have been halted while bankruptcy proceedings take place in Japan.

MtGox is expected to return to court at the beginning of April to extend this protection. The filing asks the US bankruptcy court to recognize Mt Gox’s bankruptcy in Japan and protect its US assets. The protection gives MtGox a temporary reprieve against two US lawsuits: one a class-action suit in Chicago filed by an Illinois resident, and another a $75m breach-of-contract case filed in Seattle by Coinlab Inc.

New York Regulator Plans ‘Regulated’ Bitcoin Exchanges

One of the aspects of bitcoin that is appealing is the fact that it is unregulated and is outside of the jurisdiction of any governments or authorities. Of course, at the same time, this is one of the worst aspects of bitcoin, and its lack of regulation means that if an exchange such as MTGox goes bankrupt, there is no authority that people can go to for help.

Of course, in the long run and in order to survive, bitcoin will need to be regulated to some extent. In response to this requirement, New York’s financial regulator has called on firms to submit proposals to set up “regulated” exchanges for bitcoin and other digital currencies.

The result should be better consumer protection as well as the prevention of money laundering, which is a stigma that has bugged bitcoin since its inception.

Benjamin Lawsky, New York’s superintendent of financial services, had this to say:

“The fact is that virtual currencies are unlikely to disappear entirely. The recent problems at MtGox and other firms further demonstrate the urgent need for stronger oversight of virtual currency exchanges”

“As such, turning a blind eye and failing to put in place guardrails for virtual currency firms while consumers use that product is simply not a tenable strategy for regulators.”

This, I think, is what bitcoin needs if it is ever to become a truly mainstream currency in which people have confidence. This is progress.

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