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c0lo [soylentnews.org] writes:

MountGox, the bitcoin exchange, just posted [scribd.com] a document admitting insolvancy and detailing a draft of strategy for the crisis.

From the document:

For several weeks MtGox customers have been affected by bitcoin withdrawal issues that compounded on themselves. Publicly, MtGox declared that "transaction malleability" caused the system to be subject to theft, and that something needed to be done by the core devs to fix it. Gox’s own workaround solution was criticized, and eventually a fix was provided by Blockchain.info.

...

At this point 744,408 BTC are missing due to malleability-related theft which went unnoticed for several years.

The reality is that MtGox can go bankrupt at any moment, and certainly deserves to as a company. However, with Bitcoin/crypto just recently gaining acceptance in the public eye, the likely damage in public perception to this class of technology could put it back 5~10 years, and cause governments to react swiftly and harshly.



The likely consequences will be larger than this localized financial damage, and we believe that the benefits of keeping MtGox stable and running outweigh the risks. This isn't about saving MtGox anymore.

Does their strategy goes along the line of "too big to fail"? Read and comment.

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Original Submission