Bitcoin Sportsbook Coinbet Going Belly-Up

Bitcoin takes another hit as Coinbet files for bankruptcy under murky circumstances; customer Michael Katz claims site robbed him on deposit money.

Bitcoin-only sportsbook Coinbet opened just this year and is already closing its doors. Over the Easter weekend visitors were met by a notice that the site is “now closed.” Details are murky, but the announcement came shortly after pro poker player Michael Katz claimed that Coinbet stiffed him out of $340 million by refusing to let him withdraw virtual currency.

The online sportsbook in Costa Rica has hired a “liquidation firm” to ensure that all players with outstanding deposits will be paid accordingly. The total number owed is estimated to be roughly $5 million, and many players are doubtful that they will ever get their money back.

Bitcoin remains volatile

The volatile currency is one of the most controversial issues in gambling news, something that is either loved or hated. It gained some legitimacy when online casinos Vera&John, Zynga and Bet365 started accepting it in January.

However, doubt started to grow after Bitcoin exchanges MtGox and Flexcoin filed for bankruptcy in February, and just last week Vera&John announced that they would no longer accept wagers in the virtual currency. Now with the bad news from Coinbet, confidence in Bitcoin couldn’t be lower.