Bitcoin plummets as Mt Gox exchange suspends trading

Feb 25, 2014

Bitcoin's value falls by a fifth as Mt Gox suspends withdrawals after ‘unusual activity’ on the site

George Frey/Getty Images)

MT GOX, one of the biggest BitCoin exchanges handling many millions of dollars, has halted all customer withdrawals and gone offline, prompting fears for the future of the virtual currency.

The move comes after Mt Gox reported technical issues due to "unusual activity" on the site, the BBC reports.

The Mt Gox website no longer loads, offering instead a blank screen. Some users believe that their deposits, some worth millions of dollars, may have been entirely lost.

Six other major Bitcoin exchanges issued a joint statement distancing themselves from Mt Gox. The statement condemned Mt Gox, but maintained that the Bitcoin industry was still robust.

"As with any new industry, there are certain bad actors that need to be weeded out, and that is what we are seeing today," the statement said. "We are confident, however, that strong Bitcoin companies, led by highly competent teams and backed by credible investors, will continue to thrive, and to fulfill the promise that Bitcoin offers as the future of payment in the internet age."

The developments came after Mt Gox deleted all tweets from its Twitter account and Mark Karpeles, the company's chief executive, stood down from the board of directors, the Financial Times reports.

"It is a good thing that he resigned. It is a bad thing that he needed to resign," said Roger Ver, an 'angel' investor in a string of start-ups who is often referred to as "Bitcoin Jesus".

The price of Bitcoins on the Winklevoss index, which provides a regularly updated figure for the value of the currency, fell about a fifth on Tuesday to $465, the FT says, but later recovered slightly.

Commentators expressed concern for the future of the currency. Writing on Quartz, Heather Timmons says that confidence remains Bitcoin's greatest problem. "Mt Gox is by far the largest in a long string of collapses and thefts that have plagued the upstart currency."

Bitcoin's lack of governance is both its greatest strength, but also its greatest weakness, says BBC Business Editor Robert Peston: "Bitcoin has been set up on the basis of pure caveat emptor. If its participants take any losses in their stride, and learn the lessons, it can go from strength to strength," Peston says.

But if the fledgling currency is to succeed it must introduce some form of regulation: "If they are unable to develop any kind of governance system that provides confidence that Bitcoins are where they are supposed to be, then it will disintegrate into fringe territory for loons and wild-eyed monetary anarchists."

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