MtGox Deletes Tweets; Bitcoin Exchange CEO Resigns From The Bitcoin Foundation Amid Withdrawal Controversy

   on February 24 2014 12:55 PM
MtGox Feb 20
Bitcoin prices have fallen while MtGox faces technical issues. Courtesy bitcoincharts

Bitcoin investors are sure to be unsettled by the recent actions of the now infamous digital currency exchange MtGox. CEO Mark Karpeles has resigned his elected post on the board of directors at the Bitcoin Foundation. In a seemingly unrelated yet highly coincidental move, MtGox has deleted its entire Twitter feed, leaving more than 28,000 followers in silence. This comes just days after the exchange gave an “update on an update” regarding the technical issues plaguing the exchange site since early February.

Japan-based MtGox has a history of poor communication with its customers, but the move to delete its entire Twitter feed is nearly unprecedented. Last May, Kanye West cleared his Twitter feed, leaving only a single tweet and sending the media into a frenzy to decipher the cryptic meaning behind “June Eighteen.” Prior to that, in February 2013, the Vatican deleted all of Pope Benedict XVI’s tweets after he resigned his papacy. However, the church quickly set up an archive of the former pope’s words. MtGox didn’t do anything of the sort.

The coincidence of Karpeles’ resignation and the empty Twitter nest has caused many to speculate what this might mean for the company. Suggestions on Reddit’s bitcoin subreddit have ranged from the optimistic hope that MtGox is rebranding to reinvigorate consumer trust, to the doomsday prediction that  this is the pre-insolvency of the bitcoin exchange. The lack of communication coming out of the exchange neither confirms nor denies the rumors.

What is known is that Karpeles’ resignation resulted from MtGox's extended withdrawal issues. On Feb. 7, MtGox suspended bitcoin and fiat withdrawals on its exchange, citing transaction malleability, “a bug in the bitcoin software,” as the source of the problem. This move started a chain reaction that has yet stop, which has led to protests and a near total loss of faith in the oldest exchange. However, sources close to the exchange have stated that despite the insecurity, investors' bitcoins are still safe. Whether or not they still have value is another matter.  

Prior to the withdrawal suspension, prices on the exchange topped $900 per bitcoin. Late last week, prices dropped to the lowest they have been since June, bottoming out at $91. Currently, the value on MtGox is swinging between $130 and $200. When, or perhaps if, MtGox resumes withdrawal capabilities as it has stated it will, the question is whether or not they process the pending fiat withdrawals at current value or pre-Feb. 7 prices. Of course, customers needn’t withdraw in fiat but could rather transfer their bitcoins to an external wallet and move them to another exchange such as Bitstamp or BTC-e, where the value is a more stable $570, and sell them there.

Karpeles’ resignation from the Bitcoin Foundation makes this the second board member to resign under questionable circumstances. Charlie Shrem resigned in late January after being arrested under suspicion of money laundering in connection with the Silk Road. Shrem and Karpeles’ board member spots are elected positions. Nominations for the vacant industry seats will be accepted until April 7. 

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