Mt. Gox issues statement: Oldest bitcoin exchange offline amid rumours of £250m theft

The supposed demise of the Japan-based exchange has rocked the bitcoin community

Mt. Gox, the oldest bitcoin exchange, appears to be on the verge of collapse following a series of allegations that the company is insolvent. The news has rocked the online cryptocurrency community, drawing comparisons with the bankruptcy of investment bank Bear Stearns in 2008.

Mt. Gox’s website was taken offline following a joint statement issued by six other major exchanges denouncing the company. Prior to this the Twitter feed operating by the exchange was deleted and its CEO, Mark Karpeles, quit the board of industry body Bitcoin Foundation.

“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,” reads the joint statement, which was edited following its publication to remove any reference to insolvency. “As with any new industry, there are certain bad actors that need to be weeded out, and that is what we are seeing today.”

Mt. Gox has since issued a statement on their website saying: "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."

The first sign of troubles for Mt Gox emerged earlier this month year after the exchange suspended all bitcoin pay-outs. This was in reaction to the discovery of a flaw in how the site’s protocols for handling exchanges of the currency. This vulnerability, known as “transaction malleability”, has affected several sites and is thought to have been the method by which thieves stole more than 4,000 bitcoins (at the time worth £1.6 million) from Silk Road 2, a website that offered services similar to the notorious drug marketplace Silk Road.

The crypto-currency community has been shaken by the news with many Mt. Gox customers fearing that their assets have been lost for good. A widely circulated document that is supposedly a leaked internal memo reports that that the company has suffered a theft of 744,000 BTC (£230 million, or 6 per cent of all coins in existence) that has gone “unnoticed for several years”.

The same document proposes a four step plan to save the exchange, including taking down the website temporarily, re-branding the site, and appointing a new CEO. Since the document was leaked online bitcoin owners have uncovered the existence of a new website URL for the site, suggesting that a re-launch of the exchange is planned.

Rehabilitation seems unlikely however, with members of the bitcoin community expressing a grim satisfaction in the demise of a site they see as demeaning the currency. Those who had bitocins stored the exchange have been more equivocal in their celebration.

Speaking to The Independent about the exchange’s difficulties Emily Spaven, Managing Editor of bitcoin news site CoinDesk, described the events “another nail in the coffin for Mt. Gox”, adding that she did not think the events would affect “bitcoin as a whole.”

“The news about Mt. Gox has already caused the price of bitcoin to drop, but we've seen bitcoin recover from bigger price decreases in the past,” said Miss Spaven. “Bitcoin has proved its resilience time and time again and I believe it won't be long before we see the price rebound once more.”

“It's just a shame that people with such inexperience are behind Mt. Gox. If managed correctly, the company could have taken bitcoin awareness and acceptance to the next level, but as it stands, they've done the ecosystem a massive disservice.”

Voices
Homeless Veterans charity auction: Cook with Angela Hartnett and Neil Borthwick at Merchants Tavern
charity appeal
Sport
Amir Khan is engaged in a broader battle than attempting to win a fight with Floyd Mayweather
boxing Exclusive: Amir Khan reveals plans to travel to Pakistan
Arts and Entertainment
Strictly finalists Simon Webbe, Caroline Flack, Mark Wright and Frankie Bridge
tvLive: Simon Webbe, Caroline Flack, Mark Wright and Frankie Bridge face-off in the final
Sport
Ched Evans in action for Sheffield United in 2012
footballRonnie Moore says 'he's served his time and the boy wants to play football'
PROMOTED VIDEO
Life and Style
ebookNow available in paperback
Life and Style
ebooksA superb mix of recipes serving up the freshest of local produce in a delicious range of styles
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Gadgets & Tech

    Ashdown Group: (PHP / Python) - Global Media firm

    £50000 per annum + 26 days holiday,pension: Ashdown Group: A highly successful...

    Ashdown Group: Part time Network Support Analyst / Windows Systems Administrat

    £30 per hour: Ashdown Group: An industry leading and well established business...

    Ashdown Group: Trainee / Graduate Helpdesk Analyst

    £20000 per annum: Ashdown Group: A highly reputable business is looking to rec...

    Ashdown Group: Application Support Engineer with SQL skills

    £28000 per annum: Ashdown Group: A highly reputable business is looking to rec...

    Day In a Page

    Amir Khan: 'The Taliban can threaten me but I must speak out... innocent kids, killed over nothing. It’s sick in the mind'

    Amir Khan attacks the Taliban

    'They can threaten me but I must speak out... innocent kids, killed over nothing. It’s sick in the mind'
    Homeless Veterans appeal: 'You look for someone who's an inspiration and try to be like them'

    Homeless Veterans appeal

    In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
    Could cannabis oil reverse the effects of cancer?

    Could cannabis oil reverse effects of cancer?

    As a film following six patients receiving the controversial treatment is released, Kate Hilpern uncovers a very slippery issue
    The Interview movie review: You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here

    The Interview movie review

    You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here
    Serial mania has propelled podcasts into the cultural mainstream

    How podcasts became mainstream

    People have consumed gripping armchair investigation Serial with a relish typically reserved for box-set binges
    Jesus Christ has become an unlikely pin-up for hipster marketing companies

    Jesus Christ has become an unlikely pin-up

    Kevin Lee Light, aka "Jesus", is the newest client of creative agency Mother while rival agency Anomaly has launched Sexy Jesus, depicting the Messiah in a series of Athena-style poses
    Rosetta space mission voted most important scientific breakthrough of 2014

    A memorable year for science – if not for mice

    The most important scientific breakthroughs of 2014
    Christmas cocktails to make you merry: From eggnog to Brown Betty and Rum Bumpo

    Christmas cocktails to make you merry

    Mulled wine is an essential seasonal treat. But now drinkers are rediscovering other traditional festive tipples. Angela Clutton raises a glass to Christmas cocktails
    5 best activity trackers

    Fitness technology: 5 best activity trackers

    Up the ante in your regimen and change the habits of a lifetime with this wearable tech
    Paul Scholes column: It's a little-known fact, but I have played one of the seven dwarves

    Paul Scholes column

    It's a little-known fact, but I have played one of the seven dwarves
    Fifa's travelling circus once again steals limelight from real stars

    Fifa's travelling circus once again steals limelight from real stars

    Club World Cup kicked into the long grass by the continued farce surrounding Blatter, Garcia, Russia and Qatar
    Frank Warren column: 2014 – boxing is back and winning new fans

    Frank Warren: Boxing is back and winning new fans

    2014 proves it's now one of sport's biggest hitters again
    Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

    Jeb Bush vs Hillary Clinton

    Karen Tumulty explores the power dynamics of the two first families
    Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

    Stockholm is rivalling Silicon Valley

    The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
    Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

    Crucified Santa: Urban myth refuses to die

    The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture