Bitcoin Exchange MtGox Releases Statement, All Transactions Halted For Customer Protection

  on February 25 2014 11:18 AM
MtGox Feb 20
Bitcoin prices have fallen while MtGox faces technical issues. Courtesy bitcoincharts

Silence. A negotiating tactic used to make people feel uncomfortable, often coupled with the adage “he who speaks first loses.” And while thousands of people are crying insolvency, bitcoin exchange MtGox is remaining tight lipped. After nearly 12 hours of silence, MtGox has finally come back up with only a two line statement.

In the event 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.

Late Monday night, MtGox’s halted bitcoin trading with nary a word to customers. Half an hour later, the site went blank, leaving nothing behind, not even a holding page. The price of bitcoin began to tumble and has dropped to lows of $400 on some of the larger exchanges. However, there is a shred of hope, at least that’s what MtGox wants you to believe.

Prior to the announcement, the source code of the blank landing page stated, “put announce for mtgox acq here.” Acquisition; someone has bought out MtGox. As hard as that is to believe, GoDaddy confirms a domain sale. And who, might you ask, would be so bold as to purchase a bitcoin exchange that lacks customer trust, a happy clientele, or is successful in the least bit? Mark Karpeles, it seems. The site gox.com has been sold to MtGox’s CEO.

goxwhois_crop Gox.com was sold to Mark Karpeles according to GoDaddy.com  Courtesy GoDaddy

The acquisition is seemingly confirmed by a document that was first reported by Ryan Galt, otherwise known as the Two-Bit Idiot. The document (which can be seen below), titled “Crisis Strategy Draft,” talks about an acquisition and rebranding of MtGox. It lays out a four part plan for rebranding, but hinges on two big steps: have Karpeles step down as CEO and “set up a competent team” to redesign a future exchange. But while the document may confirm the acquisition, it is in direct opposition on Karpeles’ role.

If Karpeles’ stepping down is key to the survival of MtGox, then why would they sell the domain to him in the first place? On top of that, the use of the word “competent” could imply that the author believes MtGox to be run by incompetent people. If this is really an internal document, would such charged language be used to describe employees or fellow teammates? The conflicting condition of Karpeles’ role and rhetorical language used casts doubt on the document’s legitimacy.

The document also says that the exchange has lost the majority of the bitcoins that are traded on the site. “At this point 744,408 BTC are missing due to malleability-related theft which went unnoticed for several years,” the document states. But MtGox has been stating that the bitcoins invested on the site have been safe this whole time. Additionally, the Wall Street Journal reported Monday that “two people briefed on the exchange's operations said the company has enough money to process all the customer withdrawal requests, saying external factors were behind any payment delays.” So it seems that the bitcoins are safe.

That is, until the site disappeared. Along with the blank page, MtGox deleted its entire twitter feed on Sunday, leaving customers in the dark on all fronts. No site, no twitter, no news, just speculation. Which has made everyone involved uncomfortable.

Ultimately, no one really knows what is going on except the team at MtGox. But the consensus is clear: MtGox, whether it rebrands or not, it most likely dead. And the tight lipped, no information announcements are not helping its case. 

 

  MtGox Situation: Crisis Strategy Draft by twobitidiot

 

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