Bitcoin exchange Mt. Gox goes dark in blow to virtual currency

Tue Feb 25, 2014 4:55pm EST
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Ruairidh Villar, Sophie Knight and Brett Wolf

TOKYO/ST LOUIS (Reuters) - Mt. Gox, once the world's biggest bitcoin exchange, abruptly stopped trading on Tuesday and its chief executive said the business was at "a turning point," sparking concerns about the future of the unregulated virtual currency.

Several other digital currency exchanges and prominent early-stage investors in bitcoin responded with forceful statements in an attempt to reassure investors of both bitcoin's viability and their own security protocols.

The website of Mt. Gox suddenly went dark on Tuesday with no explanation, and the company's Tokyo office was empty - the only activity was outside, where a handful of protesters said they had lost money investing in the virtual currency.

Hours later, Mt. Gox CEO Mark Karpeles told Reuters in an email: "We should have an official announcement ready soon-ish. We are currently at a turning point for the business. I can't tell much more for now as this also involves other parties." He did not elaborate on the details or give his location.

Bitcoin has gained increasing acceptance as a method of payment and has attracted a number of large venture capital investors. At a current price of about $517, the total bitcoins in circulation are worth approximately $6.4 billion.

Investors deposit their bitcoins in digital wallets at specific exchanges, so the Mt. Gox shutdown is similar to a bank closing its doors - people cannot retrieve their funds.

A document circulating on the Internet purporting to be a crisis plan for Mt. Gox, said more than 744,000 bitcoins were "missing due to malleability-related theft", and noted Mt. Gox had $174 million in liabilities against $32.75 million in assets. It was not possible to verify the document or the exchange's financial situation.

If accurate, that would mean approximately 6 percent of the 12.4 million bitcoins minted would be considered missing.   Continued...

 
Mock Bitcoins are displayed on a table in an illustration picture taken in Berlin in this January 7, 2014 file photo. Mt. Gox, once the world's biggest bitcoin exchange, looked to have essentially disappeared on February 25, 2014, with its website down, its founder unaccounted for and a Tokyo office empty bar a handful of protesters saying they had lost money investing in the virtual currency. REUTERS/Pawel Kopczynski/File