Exchange collapse puts Bitcoin’s future in doubt

TOKYO » It was supposed to revolutionize international finance. Instead, the Bitcoin virtual currency that had captured the imagination of investors and financiers may be on the verge of disappearing as quickly as it appeared.

In a stunning blow to a novel way to purchase products and services, the world’s largest exchange for trading Bitcoin currency collapsed Tuesday, triggering a massive sell-off and sending many prospective investors away — perhaps for good.

Hours after it stopped trading without warning Monday night, the secretive Bitcoin exchange Mt. Gox said that it would "close all transactions for the time being in order to protect the site and our users." The action and brief statement left users wondering where their money went, amid accusations that as many as 6 percent of the Bitcoins in circulation — worth more than $300 million at current exchange rates — were missing.

Since its creation in 2009, Bitcoin has become popular among tech enthusiasts, libertarians and risk-seeking investors because it allows people to make one-to-one transactions, buy goods and services and exchange money across borders without involving banks, credit card issuers or other third parties. Criminals like Bitcoin for the same reasons.

Speculative investors have jumped into the Bitcoin fray, too, sending the currency’s value fluctuating wildly in recent months. In December the value of a single Bitcoin hit an all-time high of $1,200. In the aftermath of the Mt. Gox collapse Tuesday, one Bitcoin stood at around $470.