Mt. Gox CEO Mark Karpeles’ resignation from Bitcoin Foundation signals the bad news isn’t over. Despite the face saving statements from Bitcoin Foundation board members about the coziness of the split, anonymous sources from several major bitcoin exchanges confirmed that the initial loss reports of the hacks that led to Mt’ Gox’s demise are overwhelmingly underestimated in the media. “The actual losses from those hacks are at best 350 million but the truth is that the company just doesn’t know because they cannot decipher the total fraudulent transactions from legitimate one and also that the company doesn’t have a clue how long this cyber attack was going on.”
The resignation was forced to preserve the integrity of the rest of the exchanges and to try and avert a panic run on other major bitcoin exchanges. The thick of it is this, “Every other exchange is vulnerable to this and any number of similar methods of bitcoin exchange exploitation. Given what we know now, the risk is and always was underplayed in the media. All the exchanges are at risk and the possibilities are literally endless. The complexity and effectiveness of the latest cyber attacks attest to the reality that these exchanges will not be able to cope with everything. If you think everything is ok… a major exchange is now offline and rumors are flying internally about bankruptcy, meaning every investor has lost all their money in Mt Gox. That could be the end of the other exchanges as well. We’re all wondering if we’ll be working at our exchange in days or weeks, because no one knows how the market will react when the real reports on Mt. Gox’s losses become public. I’m really worried.”, according to one source.
Bitcoin Foundation and Mark Karpeles did not return calls for comment on this report. How convenient…..