Mt. Gox Exchange Goes Dark, Investors Scramble as Transactions Halted - The Jewish Voice
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Thursday, November 30, 2023

Mt. Gox Exchange Goes Dark, Investors Scramble as Transactions Halted

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Bitcoin traders protest outside of Mt. Goxs Tokyo offices.
Bitcoin traders protest outside of Mt. Goxs Tokyo offices.
Bitcoin is taking yet another beating as the website of Mt. Gox, the trading platform for the virtual currency, was essentially offline and shut down by th evening of Monday, February 24, the Wall Street Journal reported. Mt. Gox accounted for more than 80% of all Bitcoin trading last year.

A brief statement was posted on the website of the Tokyo-based exchange by Tuesday, explaining that it has stopped all transactions “for the time being in order to protect the site and our users.” Investors have been unable to withdraw funds from Mt. Gox since the beginning of this month, according to the WSJ.

The chief executives of six major Bitcoin exchanges pledged in a joint statement to coordinate efforts to assure customers of the security of their funds. In doing so, the broader Bitcoin industry is taking steps distance itself from Mt. Gox as well as to offer reassurance about the future of the virtual currency.

Mt. Gox has cited a software flaw that can lead to the altering of transaction records, which can potentially make fraudulent withdrawals a possibility, the WSJ reported. While no allegations of wrongdoing by the exchange have been made, the potential for theft exists and led to concern as to whether the exchange can meet its obligations.

The WSJ cited “a report widely circulated online since Monday in the U.S.” as saying that “Mt. Gox had lost almost 750,000 Bitcoin to long-running theft. Though the value of the alleged loss is difficult to quantify because of Bitcoin price fluctuations, that amount would represent around 6% of Bitcoin in existence and a value of around $365 million at Monday’s prices.”

Mt. Gox’s website “appeared to have been deleted” by midday Tuesday in Tokyo, the WSJ said. Furthermore, “attempts to reach the Mt. Gox home page yielded a response from the server handling the page but no data were displayed, indicating the server was functioning properly but the site had no content.”

By the end of the same day, minimal activity was detected on the site. The main page still appeared empty, but the WSJ reported that the html coding contained the phrase “put announce for mtgox acq here.” The meaning of that phrase was .

BY the end of the night in Tokyo, the Web page was finally updated with content that showed a statement from “MtGox team” indicating that transactions had been halted “in the event of recent news reports and potential repercussions on MtGox’s operations and the market.”

Karl-Friedrich Lenz, a professor of law at Aoyama Gakuin University in Tokyo, told the WSJ that some of problems Mt. Gox investors are facing are due to the lack of guidelines on how to regulate Bitcoin trading in Japan.

“This shows that it is necessary if you take deposits to have a license,” he said. According to the WSJ, Japan’s central bank, finance ministry and banking watchdog, the Financial Services Authority, have all declined to take responsibility for regulating Bitcoin.

A Bank of Japan spokesman told the WSJ that the bank “isn’t in a position” to regulate Bitcoin and its exchanges, while the Ministry of Finance said it isn’t its job to supervise Bitcoin and related services either.

The shutdown of Mt. Gox on Tuesday came just one day after Mt. Gox deleted all of its Twitter posts, and Chief Executive Mark Karpeles resigned from the board of the Bitcoin Foundation, a trade group advocating for the virtual currency.

Until Tuesday, the Mt. Gox website continued to update the Bitcoin price, which was an indication that trading was indeed occurring, but data from Bitcoin Charts, a provider of Bitcoin-trading data, showed that all Bitcoin trading had ceased by 11 a.m. on Tuesday in Tokyo.

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