Mt. Gox is in turmoil. Its remaining customers are disheartened, confused, baffled and host of other more angry sounding adjectives. Mt. Gox, had halted withdrawals earlier this month due to a technical glitch in its system (Transaction Malleability DDOS). and we witnessed a quick plummeting of the after Mt. Gox announced it has halted all withdrawals (fiat/btc) to address security concerns in its system. The company followed up with other updates that were each more and more baffling to the community, pointing fingers, false hope…it was all there.

Last night after some roiling events unfolded The Bitcoin price is now lingering around the $500 range now after reaching a low of $400. Remember, it was hovering around the $900 mark, less than a month back. The Bitcoin price at Mt. Gox(no jokingly referred to as illegitimate “gox coins”) even slipped below $100 briefly, before recovering to approximately $135. Amidst the security concerns and the withdrawal seizing, many are assuming that Mt. Gox is in its final days. They had the right idea but the wrong time frame. It all went down over a 3 hour period last night where the following happened:(taken from reddit)

1.)MtGox allegedly lose 750,000 Bitcoins, according to an ALLEGED leaked document by MtGox, titled "Crisis Strategy Draft". TwoBitIdiot, who leaked the document, is a known person within the Bitcoin community.

2.) He then decides to leak the document to the public 1 - 2 hours later confirming this number, and within the document it says they are to rebrand as http://gox.com and lie their way out of this mess.

3.) After the document is leaked to everyone, MtGox halts trades immediately (Around 5 minutes after the leak)

4.) At this point, http://gox.com is still a parked domain, and not long after starts to redirect to http://mtgox.com (EDIT: More information on the domain situation from chris45215, which basically confirms that MtGox were indeed planning to relaunch as Gox.com as explained in the leaked document. Further info on Domain Investing.)

5.) After around 30 minutes, Coinbase, Blockchain, Circle and Kraken simultaneously release identical articles titled "Joint Statement Regarding the Insolvency of Mt.Gox" (EDIT: Since then, some of the articles have removed the word "insolvency", but not all of them.)

6.) A further 5 minutes later, http://mtgox.com is taken completely offline.

7.) And now we are here, with not a single word from MtGox.

Leading up to the climax of events last night, Mark Karpeles, the CEO of Mt.Gox resigned(let’s be Frank he was asked to resign surely) from the board of a key advocacy group for the virtual currency, the Bitcoin foundation. While this move in itself didn’t definitively signal problems at Mt. Gox. It was long overdue as the community saw the public handling of their issues a complete lack of professionalism and respect for the community. On February 20, 2014, Mt. Gox in a statement said that it is still working on re-initiating Bitcoin withdrawals, while dealing with some security issues as well. The rumors of insolvency of the Bitcoin withdrawals issue are making rounds. This created a large group of protesters around the Mt. Gox office, which lead the officials to shift their office to another location, due to security concerns.

Adding to these problems, Ryan Selkis, a Bitcoin entrepreneur leaked an ALLEGED internal Mt.Gox document that states that "At this point 744,408 BTC are missing due to malleability-related theft which went unnoticed for several years. The cold storage has been wiped out due to a leak in the hot wallet.” Our personal opinions are this document was a fake, it was written unprofessionally and created more questions than it answered. If there is any truth to the leake document it would mean Mt.Gox is in fact bankrupt, as they had $174 million in liabilities against $32.75 million in assets. The stolen Bitcoins amount to $360 million, going with the present rate. They also represent about 6% of the 12.4 million Bitcoins in circulation. Shorly after all trading was halted and this document surfaced the Mt.Gox website went completely offline by showing a blank white page on its website following up on the deletion of its twitter feed the day before.

Earlier today (February 25, 2014) the silence was broken by Karpeles issuing a statement to Reuters said Mt. Gox was “at a turning point”

"We should have an official announcement ready soon-ish. We are currently at a turning point for the business I can't tell much more for now as this also involves other parties."

The website showed life this morning with the following:

"Dear MtGox Customers,

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.

Best regards, MtGox Team"

So we can say the Gox saga continues….for now

Buy your first bitcoins securely and safely in minutes! Your first $5 is on us!coinbase.gif

Posted
AuthorTeam Bitcoin