Categories: Bitcoin ExchangeNews

Breaking: MtGox Appears to be Insolvent

A variety of sources are starting to report on the state of MtGox's insolvency. CCN's Caleb Chen started to report…

It turns out the protesters may have had a real reason to camp outside of MtGox.

A variety of sources are starting to report on the state of MtGox's insolvency. CCN's Caleb Chen started to report on today's crisis at MtGox earlier today. Here's what we know so far:

  • It started with this docment leaked by Two Bit Idiot. The document claims to be a contingency plan in the face of MtGox's current outstanding liabilities.
  • Coinbase, Kraken, Circle, and others are releasing a joint statement MtGox's insolvency.
  • Someone has decided to purchase gox.com. It's important to remember that three letter domains do not come cheap.
  • MtGox has halted trading, and the entire website seems to be down.
  • After talking about how MtGox customers may be able to get their money back as recently as yesterday, former BitInstant CEO Charlie Shrem had this to say on Twitter: "If this is true, I stand corrected and have been lied to all along. We've all been lied too all along."

Update: The word "insolvent" has been removed from the joint statement released by BTC China, Kraken, Coinbase, and other exchanges.

Update #2: Bitstamp just dropped below the $500 mark for the first time in months.

So What's Next for Bitcoin?

As Erik Voorhees has already laid out on Reddit, the rest of this week could be a difficult one for the Bitcoin community. Although the problems at MtGox have already affected the price of bitcoins on other exchanges, the reality is that there is still nothing wrong with the underlying Bitcoin protocol. The media will undoubtedly get this story wrong in many different ways, and it may take a few weeks, or even months, for the bitcoin price to recover. Having said that, MtGox needed to finally die if Bitcoin was ever going to become a success. Some MtGox customers have probably lost a ton of money, including Roger Ver, Erik Voorhees, and Charlie Shrem, but the Bitcoin commnity as a whole will become stronger and more stable thanks to MtGox's demise. I don't want to sound overly optimistic in a situation where hundreds of millions of dollars were possibly stolen, but "This is actually good news."

Last modified (UTC): April 20, 2014 6:34 PM

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Kyle Torpey @kyletorpey

Kyle is a freelance Bitcoin writer and the Marketing Director for Bitcloud. His work has been featured on Business Insider, VICE Motherboard, Let's Talk Bitcoin, and RT's Keiser Report . You can follow him on Twitter (@kyletorpey) or send him an email.

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