MtGox, once the world’s largest Bitcoin exchange, has gone offline.
Sites tracking trading on the Bitcoin exchange are reporting no trading activity there.
Bitcoin prices were down as much as 14% to $US465, a level not seen since mid-November.
Gox had halted withdrawals for more than two weeks amid what it claimed were software issues with its wallets. But The Bitcoin Foundation has emailed BI a statement about the situation, saying it appears Gox may be insolvent:
“We are shocked to learn about Mt. Gox’s alleged insolvency. While we are unable to comment on whether or not Mt. Gox’s business operations employed operational best practices and reasonable accounting procedures, we can assure the public that the Bitcoin protocol is functioning properly.”
A document unearthed by Bitcoin enthusiast Ryan Selkis that’s been widely circulated estimated at least 744,408 BTC — about 6% of all coins in existence — are now out of circulation. The document asserts the coins have slowly been stolen over the course of several years. In an email to BI, Selkis said he confirmed the authenticity of the document with people close to MtGox. It’s also been cited by the New York Times.
Meanwhile, the leaders of six major Bitcoin organisations have released a statement that points to the end of MtGox as a going concern. They pledge to work together to restore integrity to the Bitocin community. Here is the revised version of an earlier blog item in which they’d characterised Gox as “insolvent.”
The purpose of this document is to summarize a joint statement to the Bitcoin community regarding Mt.Gox.
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. 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.
We are confident, however, that strong Bitcoin companies, led by highly competent teams and backed by credible investors, will continue to thrive, and to fulfil the promise that bitcoin offers as the future of payment in the Internet age.
In order to re-establish the trust squandered by the failings of Mt. Gox, responsible bitcoin exchanges are working together and are committed to the future of bitcoin and the security of all customer funds. As part of the effort to re-assure customers, the following services will be coordinating efforts over the coming days to publicly reassure customers and the general public that all funds continue to be held in a safe and secure manner: Coinbase, Kraken, BitStamp, Circle, and BTC China.
We strongly believe in transparent, thoughtful, and comprehensive consumer protection measures. We pledge to lead the way.
Bitcoin operators, whether they be exchanges, wallet services or payment providers, play a critical custodial role over the bitcoin they hold as assets for their customers. Acting as a custodian should require a high-bar, including appropriate security safeguards that are independently audited and tested on a regular basis, adequate balance sheets and reserves as commercial entities, transparent and accountable customer disclosures, and clear policies to not use customer assets for proprietary trading or for margin loans in leveraged trading.
The following industry leaders stand by this statement:
Fred Ehrsam — Co-founder of Coinbase
Jesse Powell — CEO of Kraken
Nejc Kodrič — CEO of Bitstamp.net
Bobby Lee — CEO of BTC China
Nicolas Cary — CEO of Blockchain.info
Jeremy Allaire — CEO of Circle
This all comes about 36 hours after Gox resigned from the Bitcoin Foundation and deleting all Tweets from their Twitter feed.
Meanwhile, Bitcoin prices are sliding, briefly dipping below $US500 for the first time since mid-November.
Business Insider Emails & Alerts
Site highlights each day to your inbox.