Last Thursday, the Global Bitcoin Stock Exchange, the first and by far the largest securities exchange in the Bitcoin economy, unexpectedly shut down. The principal cause of the shutdown appears to be legal problems. As Nefario wrote in IRC chat[1], “my problem actually is: 1) AML, 2) tax, 3) regulations, in that order.” The shutdown has already had an impact on the Bitcoin price, dropping it from about $12.9 to a low of $10.65 before a partial recovery[2], and will have a significant impact on the Bitcoin economy over the next few weeks as the businesses listed on the exchange adjust to the loss of their main platform for attracting and interacting with investors.

The GLBSE was first launched by its founder James McCarthy, more commonly known by his forum handle Nefario, in May 2011. The site had a rocky start; the first IPO that was made through the exchange was Ubitex, a service which intended to help Bitcoin buyers and sellers avoid the banking system and trade bitcoins