• 25 Feb 2014 at 5:01 PM

The Bitcoin Bugle: Beginning Of The End? Edition

Once upon a time—like, a few weeks ago—Mt. Gox was one of the largest bitcoin exchanges in the world. Maybe the largest; who really knows anything for sure in matters cryptocurrent? Then this happened. And now, today, Mt. Gox doesn’t actually appear to exist anymore. Which makes it a perfect analog for all of those bitcoins that have gone “missing.”

The website of Mt. Gox suddenly went dark on Tuesday with no explanation, and the only activity at the company’s Tokyo office 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 give any other details….

Bitcoin investors deposit their holdings 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.

Luckily for those in need of more information, be they a regulator, a person locked out of their instawallet or someone who makes cheap jokes, “soon-ish” has come. Unfortunately, this is what it looks like, for the time being, anyway.

“In light of recent news reports and the potential repercussions on MtGox’s operations and the market, a decision was taken to close all transactions for the time being in order to protect the site and our users. We will be closely monitoring the situation and will react accordingly.”

So, yea, things are not looking great for our favorite punchline, but rest assured, bitcoin enthusiasts: Nothing is fucked. The plane has not crashed into the goddamned mountain.

In statements released on their various corporate websites, the CEOs of the firms—exchanges Bitstamp, BTC China and Kraken, as well as broker and payment processor Coinbase, wallet provider Blockchain.info and payment firm Circle Internet Financia—sought to separate concern about Mt. Gox, where an ongoing freeze on bitcoin withdrawals has stoked fears of bankruptcy, from those in the broader bitcoin community.

“This tragic violation of the trust of users of Mt. Gox was the result of one company’s actions and does not reflect the resilience or value of bitcoin and the digital currency industry,” the statement said. “There are hundreds of trustworthy and responsible companies involved in bitcoin. These companies will continue to build the future of money by making bitcoin more secure and easy to use for consumers and merchants. As with any new industry, there are certain bad actors that need to be weeded out, and that is what we are seeing today.”

Bitcoin exchange Mt. Gox goes dark in blow to virtual currency [Reuters]
Mt. Gox says all transactions closed ‘for time being’ [MarketWatch]
Six Bitcoin Exchanges Work to Reassure Customers [WSJ]

5 comments (hidden to protect delicate sensibilities)
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Comments (5)

  1. Posted by Pant Bugle | February 25, 2014 at 5:23 PM

    Nants ingonyama bagithi Baba I want to do Shazars sister in the bum.

  2. Posted by klhoughton | February 25, 2014 at 5:46 PM

    " As with any new industry, there are certain bad actors that need to be weeded out, and that is what we are seeing today."

    There are not more lies than words in that sentence, but it's damned close, especially for something with so many words that combine to be semantically null.

  3. Posted by Guest | February 25, 2014 at 5:50 PM

    what's "malleability-related theft?" is that the same kind of theft Bernie Madoff committed?

  4. Posted by Sally Snyder | February 25, 2014 at 7:14 PM

    As shown in this article, a classic head and shoulders analysis suggests that the value of a Bitcoin could still fall substantially:
    http://viableopposition.blogspot.ca/2014/02/bitco

    While Mt. Gox may not be the death knell, those who purchased Bitcoins near the peak may find that over the long-term, their assets are worth far less than they paid for them.

  5. Posted by WTF? | February 25, 2014 at 7:27 PM

    a woman who is using technical analysis…not sure if this is a joke or really the beginning of the end..

    -UBS Fallacy Quant