The Doom of Mt. Gox – Website Offline, Shunned By Industry Leaders, All Trading Halted

February 25, 2014 04:29 UTC

Update: the Mt. Gox website currently fails to load.

As Mt. Gox have been using Cloudflare since the DDOS attacks which crippled the exchange last year, the most likely explanation is that the site has been taken down by the owners.

It’s no secret that Mt. Gox has been sick for a long time. Last year the exchange had major lag and legal problems, this year withdrawal fiat and then Bitcoin was suspended amid a public relations fiasco. Now the grim prospect of insolvency faces all Gox customers.

It now seems the axe is falling on Gox. A post appearing on the Blockchain.info and Coinbase blogs, signed by senior executives of six major Bitcoin exchanges, declares Gox to be “a bad actor” and effectively exiles them from the Bitcoin community.

As reported in detail elsewhere on this site, the following message declares all trading to halted (at the price of $135) within the locked, burning theater that is all that remains of Mt. Gox:

All trading on Gox is now halted.

The statement reads as follows:

Joint Statement Regarding MtGox

Feb 24th, 2014

The purpose of this document is to summarize a joint statement to the Bitcoin community regarding Mt.Gox.

This tragic violation of the trust of users of Mt.Gox was the result of one company’s actions and does not reflect the resilience or value of bitcoin and the digital currency industry. 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.

We are confident, however, that strong Bitcoin companies, led by highly competent teams and backed by credible investors, will continue to thrive, and to fulfill the promise that bitcoin offers as the future of payment in the Internet age.

In order to re-establish the trust squandered by the failings of Mt. Gox, responsible bitcoin exchanges are working together and are committed to the future of bitcoin and the security of all customer funds. As part of the effort to re-assure customers, the following services will be coordinating efforts over the coming days to publicly reassure customers and the general public that all funds continue to be held in a safe and secure manner: Coinbase, Kraken, BitStamp, Circle, and BTC China.

We strongly believe in transparent, thoughtful, and comprehensive consumer protection measures. We pledge to lead the way.

Bitcoin operators, whether they be exchanges, wallet services or payment providers, play a critical custodial role over the bitcoin they hold as assets for their customers.  Acting as a custodian should require a high-bar, including appropriate security safeguards that are independently audited and tested on a regular basis, adequate balance sheets and reserves as commercial entities, transparent and accountable customer disclosures, and clear policies to not use customer assets for proprietary trading or for margin loans in leveraged trading.  It does not appear to any of us that MtGox followed any these essential requirements as a financial services provider.

The following industry leaders stand by this statement:

Fred Ehrsam — Co-founder of Coinbase

Jesse Powell — CEO of Kraken

Nejc Kodrič — CEO of Bitstamp.net

Bobby Lee — CEO of BTC China

Nicolas Cary — CEO of Blockchain.info

Jeremy Allaire — CEO of Circle

It seems likely the next step will be permanent closure of Mt. Gox.

The market, although anticipating bad news of this kind, has nonetheless falling to $486 on Bitstamp.

Last modified: February 25, 2014 04:58 UTC

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Former swing trader of equities and daytrader of futures, out to make it in this crazy crypto world. I'll be doing some chart-reading aka fortune-telling, plus some interviews with crypto developers and miners. And maybe even some cartoons. If you like the cut of my gib, visit my website (goldrhino.tk) and pick up a Ⓑ keychain or Ⓑ leather mousepad.