The oldest and at one time largest bitcoin exchange, the Tokyo-based Mt. Gox, has apparently ceased trading amid rumours of a theft of some 744,000 bitcoins from the site.
Mt. Gox has taken its website offline and ceased all media activity, even suspending its Twitter account and deleting all posts to date. CEO Mark Karpeles stepped down on Monday. The company, which was formed in Japan in 2009, has not yet issued any statement but an apparently leaked document – from blogger Ryan Selkis and reported at wired.com - claimed that the exchange had lost 744,408 bitcoins with a value of around $350m at Monday's rates.
There are 12.4 million bitcoins in (virtual) circulation meaning the Mt. Gox heist would amount to six per cent of all bitcoins in existence.
Doubt surrounds the veracity of the Selkis “leak” but the bitcoin community has made it clear that Mt. Gox has "issues.”
In a joint statement released yesterday, six other major bitcoin exchanges - namely Coinbase, Kraken, Bitstamp, BTC China, Blockchain and Circle - sought to distance themselves from Mt. Gox while alluding to the company’s troubles.
The statement read: “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. Mt. Gox has confirmed its issues in private discussions with other members of the bitcoin community.”
It continued: “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.”
The notoriously volatile bitcoin exchange rate however hinted at a lesser degree of confidence in the currency, with the rate dipping by 23 per cent to a low of $418 as the story broke on Monday. By Tuesday afternoon, the rate had recovered to around $490 - still less than half the record high of $1,242 seen in November 2013.
In the absence of any statement from Mt. Gox, on Tuesday afternoon rumours emerged that the exchange might instead be the subject of a takeover. A Washington Post blog pointed to a line of HTML source coding on the (otherwise blank) Mt. Gox website which hinted at an acquisition announcement.
Misdirection, mismanagement or a simple misunderstanding, little is clear at this juncture - but it makes for a compelling narrative.
