Mt. Gox’s historical reasons for bankruptcy, hit with lawsuit
Is your money safe in GDAX or Coinbase?
A few years back, the world’s largest Bitcoin exchange, Mt. Gox, has just filed for bankruptcy. This has caused a massive decline in the value of Bitcoin, but what actually happened?
As it turns out, sometime near the end of February, Mt. Gox’s faulty security systems had been hacked. The exchange reported an astronomical amount of Bitcoins were lost: 750,000 of its users’ Bitcoins and 100,000 of its own. Since Bitcoins were trading at $565 each, this means close to half a billion dollars was lost. The CEO, Mark Karpeles, has not taken any responsibility for the event aside from apologizing a few times and explaining that it was the fault of lax security.
His irresponsibility has caused many enraged investors — who had all stored their Bitcoins in the exchange — to sue the company. Further investigation shows that the Bitcoin price dropped close to $50 from around $600 dollars during the day of the Mt. Gox bankruptcy. Using a combination of political and human resource frames in combination with Lencioni’s key behaviors, it is possible to better grasp why Mt. Gox failed as well as the investor reactions.
