Skip to main content

Mt. Gox goes offline leaving Bitcoin investors livid and worried


Detailed extensively by Reuters today, Bitcoin exchange Mt. Gox has halted all trading and the owners have replaced the site with a splash page. If you are unfamiliar with the concept of Bitcoin exchanges like Mt. Gox, the structure somewhat resembles how a traditional bank operates. People that purchase Bitcoins can deposit the digital currency at exchanges and convert it into the currency of other countries like U.S. dollars for instance. Investors that deposited Bitcoin at Mt. Gox currently have no way of accessing their currency and are extremely unhappy at the moment.

Targeting the message to Mt. Gox customers, the splash page on the now defunct site reads “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.” 

In addition, the company’s Toyko-based office is now empty. Providing an incredibly vague statement to Reuters, Mt. Gox CEO Mark Karpeles said “We are currently at a turning point for the business. I can’t tell much more for now as this also involves other parties.”

These recent events can be attributed to an alleged theft in which Mt. Gox lost approximately 744,000 Bitcoins or approximately $409 million based of the current exchange rate of around $550. Detailed within a crisis management document allegedly leaked by a Mt. Gox insider, Mt. Gox management is attempting to handle the theft starting with reducing liability by pursuing a bailout from other Bitcoin users and exchanges.


Other steps include announcing the departure of CEO Mark Karpeles blaming poor organization and technology for the security issue, moving the exchange to a new country, rebranding the exchange on social networks as Gox rather than MtGox and setup an entirely new management team. The target date for setting up the rebranded exchange is April 1, 2014 or later. When Gox is launched, trade limits will be put in place on both Bitcoin and cash withdrawals.

Picketing outside of Mt. Gox for the last week, bitcoin trader Kolin Burgess has been attempting to get back approximately $320,000 in Bitcoins from the exchange. Speaking with USA Today, Burgess said “I may have lost all of my money. It hasn’t shaken my trust in Bitcoin, but it has shaken my trust in bitcoin exchanges.” 

Interestingly, some Bitcoin investors believe that the fall of Mt. Gox will only lead to a more stable future for the currency. In an interview with Bloomberg, George Mason University technology director Jerry Brito said “It purges the final vestige of the first generation of infrastructure companies, Who’s left? It’s the serious people, who are doing this right.”

Other popular Bitcoin exchanges and businesses, such as San Fransisco based Coinbase, attempted to shore up support for the digital currency with a joint statement released yesterday. A portion of the statement reads “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. There are hundreds of trustworthy and responsible companies involved in bitcoin…As with any new industry, there are certain bad actors that need to be weeded out, and that is what we are seeing today. “

Editors' Recommendations

Mike Flacy
By day, I'm the content and social media manager for High-Def Digest, Steve's Digicams and The CheckOut on Ben's Bargains…
Mt. Gox to enter bankruptcy proceedings as Tokyo court rejects rehab plan
can bitcoin world avoid another mt gox mark karpeles

Troubled Japanese bitcoin exchange Mt. Gox has been placed in administration after a court in Tokyo dismissed its plan for rebuilding its business. The company, which was once the biggest bitcoin exchange in the world, filed for bankruptcy protection back in February after it lost 850,000 bitcoins worth around $436 million in today’s prices. It blamed the disappearance of the bitcoins on “transaction malleability” issues. It later recovered 200,000 bitcoins, which were said to be in a “forgotten” wallet. Shortly before filing for bankruptcy protection, the exchange was hit with a class-action lawsuit, which accused Mt. Gox and its CEO Mark Kapeles of consumer fraud and negligence.
In Mt. Gox's case, being placed in administration means that someone has been called in to sort out its assets and figure out how to compensate its creditors. In a statement published on the Mt. Gox website, provisional administrator Nobuaki Kobayashi said that the company’s plans to stay afloat failed to sway the court into leniency.
“The Tokyo District Court recognized that it would be difficult for the company to carry out the civil rehabilitation proceedings and dismissed the application for the commencement of the civil rehabilitation proceedings,” said Kobayashi. “The future outlook is that, although it is subject to the decision by the Tokyo district court, it is expected that the commencement of bankruptcy proceedings will be ordered.”
In his statement, Kobayashi added that it is also likely that Kapeles will be investigated for his role in exchange’s collapse: "It is expected that, if the bankruptcy proceedings commence, an investigation regarding the liability of the representative director of the company will be conducted as part of the proceedings."    
At its most profitable phase, the company had its hand in over 80 percent of all global dollar trades for bitcoin. It underwent something similar to Chapter 11 bankruptcy, which gave management a chance to reorganize and negotiate with creditors. 

Read more
Bitcoin goes nuts, jumps over $1,000 per Bitcoin
PayPal won't let you buy Bitcoins

If you don’t own any Bitcoins, you’re going to be wishing you did today. The world’s most popular digital currency has jumped to over $1,000 per Bitcoin repeatedly over the past 24 hours. At the time of this writing, Bitcoins are currently trading at about $1,050 on Bitcoin exchange Mt. Gox.
The jump above $1,000 is more than just a symbolic benchmark for Bitcoin, which has only been in existence since 2009 – it’s making a lot of early adopters very, very rich. As of January of this year, a single Bitcoin could be purchased for just $13. The currency hit a high water mark in April, when it rose to $238 before falling back to between $84 and $100. Since the beginning of November, however, the price of Bitcoin has risen steadily from just under $200 to its high point today.

The meteoric rise of Bitcon’s value follows positive reception to the digital currency from the U.S. government, which debated how to deal with regulating the online money at a Senate hearing earlier this month. Regulators’ willingness to allow Bitcoin to operate within the U.S., and a surge of investors in China, are seen as a major reasons for the most recent surge.
Unlike normal banks, Bitcoin wallets – used to store the digital currency – are public, and the amounts within them are known to all. This allows anyone to get a sense of just how much money the wealthiest Bitcoin users have. At the time of this writing, the richest Bitcoin wallet currently contains more than 100,000 Bitcoins worth more than $100 million. 
There are currently just over 12 million Bitcoins in existence, putting the total current value of all Bitcoins at more than $12 billion – a lot of money for a currency based on an open-source algorithm and a dream, but nothing compared to what's in the vaults of even a single major U.S. bank. The Bitcoin algorithm is designed to eventually stop creating Bitcoins entirely – making it more akin to a finite resource like gold than printed dollars – meaning there will only ever be about 21 million Bitcoins in existence.
Despite the current success of Bitcoin – in fact, because of it – some believe the digital currency, which is controlled by no single entity as other currencies are, will fail. As Reuters economics editor Edward Hadas recently wrote for, the reason Bitcoin is successful is because no governments have figured out a way to control it. Once they do, he argues, it will all come crashing down. Bitcoin believers, on the other hand, see the currency as the most important system to come along since the Internet. Who’s right? Only time will tell. But for today, anyone with even a single Bitcoin is surely patting themselves on the back.
To learn more about Bitcoin, check out our guide here.

Read more
One of HP’s best student laptops is $230 off today
hp pavilion pro 14 review plus front angled

Parents and students who are searching for laptop deals with amazing value should take a look at HP's discount for the HP Pavilion 15.6-inch laptop. From its original price of $600, it's down to $370 for $230 in savings. It's not going to challenge the best laptops in terms of performance, but it's easily within the realm of the best budget laptops. You'll need to push through with your purchase as soon as possible though, because the laptop's stocks probably won't last long.

Why you should buy the HP Pavilion 15T-EG300 laptop
The HP Pavilion is a great laptop for students looking to get a head start on savings and studies over the summer. It’s up there with several of the best laptops for college, and it has a large, 15.6-inch Full HD display that’s great for both taking notes in class and watching movies on the weekend. Dual speakers by Bang & Olufsen chip in for the show as well. Because this is a larger-sized laptop, it can house a larger battery. In most cases you’ll get a full day of use with this laptop, and fast charging technology will get you to a 50% charge in just 45 minutes. HP is among our best laptop brands as well, so you know you’re getting a computer that can last.

Read more