Mt. Gox Goes Bankrupt

For anyone who read my series on the Silk Road, you know that I used to use Mt. Gox. Thankfully, I haven’t for quite a while, so all of my funds are safe. But if a giant like Mt. Gox goes bankrupt, what does that mean for the many other bitcoin converters. In my opinion, nothing. Mt. Gox was a poorly owned organization that let themselves get scammed. When you make a bitcoin transaction, like requesting bitcoins to be released, you get a unique ID, but in the interest of protecting the identity of the bitcoin user, there is no record of that transaction. So when dozens of people (more probably) starting claiming that their money never made it back to their bank account, Mt. Gox took “The customer is always right” approach. In the interest of customer service, the replaced their funds with no proof that the customer’s claim was accurate. They simply kept releasing funds until they supposed made it to the customer’s bank account. Once someone is keen to the lax policy, who is to say they won’t try it again and again. Which, apparently is what they did. Management could have prevented all of this. Once someone recognized that they were receiving an inappropriate number of complaints about failed transactions that should have been an enormous warning flag. But instead of being smart and ordering an internal audit, and questioned the requests. Instead, they continued to blindly make up for the “errors” and kept paying the grifters off, eventually leading to their demise. This poor lack of management infuriates me, especially scine it was so easily preventable. Hopefully other bitcoin companies take these lessons to heart and don’t suffer the same fate as Mt. Gox! To read more on the bankruptcy of bitcoin, click on the link below!

Mt. GoxBitcoin News


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