Bloomberg – Mt. Gox, which had the largest market share of all digital currency exchanges as recently as April 2013, went offline yesterday, after halting customer withdrawals on Feb. 7. A document posted on the Internet that appeared to be an internal strategy document said Mt. Gox had lost 744,408 Bitcoins — about $390 million — as a result of apparent theft that “went unnoticed for several years.”…
“To win back customer trust and gain broader adoption, Bitcoin community will need to accept regulation, work through well-established banking channels and embrace strong consumer protection rules,” Williams said in an e-mail.
That last quote was taken from Mark Williams, a former regulator and commodities trader, now a teacher at Boston University. I’m sure Mark’s a nice guy, but he’s stone-cold wrong on this one. Bitcoin was created in opposition to traditional banking channels. It stands diametrically opposed to centrally regulated government hand cuffs. I find the thought of the Bitcoin community simply accepting regulation legitimately hilarious – not going to happen.
That being said, the Mt Gox exchange calamity has got to shake the resolve of even the strongest Bitcoin faithful. It’s highlighted one of the many flaws in unregulated online currency markets. I’m not saying regulation is the answer here. I’m not saying it isn’t.
I hate referees and umpires and governing bodies like the NCAA as much as the next guy. But I’ll gladly drop $100 for good seats at Madison Square Garden and I wouldn’t drop a dime to watch free-for-all street-ball schlock. Maybe that’s an apples-to-oranges comparison. But is the flaming anarchy of Bitcoin the only answer we have for overregulated traditional markets?
CentricFringe 