Moolah Plans Company Return Despite "Critical Bug" and Locked Bitcoin Exchange

Yesterday, CEO of Moopay Alex Green announced that the company would be filing bankruptcy. They are shutting down the Moolah exchange and already took down the MintPal exchange due to a “critical bug” found in their Version Two migration. By shutting down MintPal without warning, Green has trapped $130,000 worth of cryptocurrency on the exchange.

Users were only met with a message page when trying to access the MintPal exchange stating the following:

“MintPal is currently down for urgent bug fixes, and is additionally moving to new management (away from Moopay LTD). A statement will follow shortly.”

Later, the page was updated with a different text, outlining a planed date for withdraws:

"MintPal is currently down for a number of necessary changes and fixes. A separate method of withdrawing funds will be made available on October 16th, 2014."

In response, users have banded together on a bitcointalk forum page, calculating the trapped funds to take legal action against Green and Moopay. The member running the forum, known as BlockaFett, stated the following on the mission behind gather the information. As said before, approximately $130,000 worth of cryptocurrency is trapped on the exchange until withdraws are opened. At the same time, Moolah was down due to a possible attack on the website.

Responding to the call to keep funds off of an exchange, BlockaFett reminded skeptics that coins need to be left on a cryptocurrency exchange in order to allow users to buy and sell other coins. There would be no liquidity otherwise.

The trapped funds nearly mirror the Mt.Gox collapse last February, leaving many to wonder whether or not they’ll have access to their coins at all. As of right now, all users have to go off is the promise from Green, which may not hold much weight anymore.

Green tweeted earlier, reinstating his word for the future of MintPal.

Green then uploaded a blog to the Moolah website, reinforcing Moopay's control over MintPal. The website is still locked, but supposedly will be up within the next day or so.

"MintPal as an exchange is sticking around, and will be up within the next day or so in order to enable people to withdraw coins ahead of key changes to the platform. At this stage, it is still highly likely that management will be passing to another entity as planned; though the beneficial owners of the exchange have received a number of acquisition offers."

Moolah Making a Return

Riding off the heels of Bitcoin Foundation Director Brock Pierce reaching out to Green through twitter after the bankruptcy announcement, Green tweeted about the possible return of Moopay.

Afterwards, Green uploaded a blog refuting the idea that the company is going bankrupt, and does in fact plan to return:

"While we used the word bankruptcy, I would like to make it clear that our consumer reserves are entirely solvent; and the plan was for a voluntary dissolution and winding up, with a distribution of liquidated assets to company investors (as per normal procedure). We saw no alternative. After making the post, a number of people reached out to us – and some of these people included private angels and well established VC firms. While the resulting process will take a considerable amount of time, it has spurred us to find an alternative to keep afloat while we attempt to secure much needed capital."

"After a number of internal discussions, we have found a way. Our core platform will be sticking around. We will be scaling back the platform and focusing on merchant services (shifting away from consumer), and ceasing development on non-core services."

Screenshot of Alex Green (right) from leaked video conversation.

Though there is no confirmed connection between the possible private conversation with Pierce and this return for the business, there is reasonable suspicion. The Bitcoin Foundation doesn’t want to hurt the cryptocurrency community, and they may be trying to prevent another Mt.Gox scandal.

Green commented on Reddit yesterday after the bankruptcy announcement along with the Pierce tweet, saying that they were “still looking for any and all means of saving the company.” He then tried to reassure customers that they would be able to withdraw funds, but said that Moolah was currently under attack.

“All customer funds held with Moolah are perfectly safe, you should be able to withdraw them as normal. We're currently undergoing a rather large attack at the moment, so if you encounter any issues - please keep trying and it should go through.”

Now, Green looks to be cutting staffing and taking an anonymous way out to save the company.

Moolah Shutting Down Would Not Kill Dogecoin

Upon announcement, a few sources reported this as the “Death of Dogecoin.” The allegation simply is not true. While it may shake investor confidence temporarily, there are enough services supporting Dogecoin at the moment to cushion the blow of Moopay's possible bankruptcy. While Moolah was critical to the first steps of implementation, Dogecoin has furthered beyond the company and onto other mainstream exchanges.

One of those mainstream exchanges was MintPal, where reportedly 4 million trapped DOGE live.

What do you think about the future of Dogecoin? Comment below.

Images from Shutterstock.

Last modified (UTC): October 15, 2014 10:20 PM

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Clay Michael Gillespie @thelivingaspect

Clay Gillespie a writer and reporter for many different platforms across the tech industry. He holds a B.S. in Public Relations from Ball State University, and freelances for different clients in technology and cryptocurrency. For more information, visit his personal website, claygillespie.com.

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