I never jumped on the Bitcoin bandwagon, and (if only for the state of my electricity bill) I am glad I never did. The number of people jumping around saying smugly "I told you so" must be pretty galling to the people who wasted so much time and real money on this scam. The fact that the REAL money spent on making Bitcoins PER YEAR far exceeds the total possible value of ALL those already minted/mined is very telling. But the story and insightful comments here are VERY apposite: http://www.dailytech.com/The+Death+o...ticle34390.htm

I can't help agreeing with the concensus there that on any rational evaluation, this was a classic pyramid scam set up to benefit those in at the start while paupering those who joined later. You can't really separate out the fraudulent exchange from the (surprise, surprise: secret) source of the currency, either. The potential long-term benefits of government-independent cyber-currency are an interesting twist in this sorry story, and yet to be proven fully, but THIS currency attempt, and this criminal exchange which systematically stole users' funds in what looks VERY suspiciously like an inside job rather than outside hacking, has neatly put that debate back for years.

It's going to be interesting to watch individuals try to sue these people through whatever courts they think will help. Since the entire premise was that this was an UNregulated currency, no government financial authority or regulator is going to touch this unlicensed, unregulated gambling and speculation with a barge pole. And since there is nothing backing the worth of what has been lost (some digital hashes) I'll bet most civil authorities are likely to ask what crime exactly has been committed?