Japanese bitcoin exchange Mt. Gox has been facing nothing but problems lately, and now, the issues are getting even worse. The company has taken down its website, leaving visitors with nothing but this message:
Dear MtGox Customers,
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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.
Trading at Mt. Gox halted
It’s been more than two weeks since the bitcoin exchange halted withdrawals, and customers have been protesting outside the company’s headquarters. The company claimed that problems with the bitcoin software itself was creating issues within its digital wallets. However, that might not be the only issue Mt. Gox is facing. Now Business Insider is reporting that customers have said they received messages which said all trading activities on Mt. Gox have been disabled. Mt. Gox even packed up shop and moved to its previous location.
Business Insider received a statement from the Bitcoin Foundation which suggested that Mt. Gox may be insolvent. The organization said it was “shocked to learn about Mt. Gox’s alleged insolvency.” It said although it couldn’t comment on the Japanese exchange’s practices and procedures, it assured the public that the bitcoin protocol itself “is functioning properly.” The statement came after Mt. Gox resigned from the board of the foundation.
Bitcoin prices stabilizing elsewhere
Bitcoin prices have certainly taken a tumble over the last few months, falling from over $1,000 to $550. The value of the digital currency tumbled down to $423 at U.S.-based exchange CoinBase, although it has since recovered to $554. Bitcoins haven’t been valued in the $400 range since November.
However, the digital currency appears to be disappearing from circulation. Bitcoin enthusiast Ryan Selkis discovered a document which suggests that at least 704,408 bitcoins, which is about 6% of those in existence, are no longer in circulation. The document suggests that thieves have been slowly stealing them. According to Selkis, he confirmed with sources close to Mt. Gox that the document is authentic.
U.S. regulator: bitcoin risk “off the charts”
Bitcoin exchanges which have been competing with Mt. Gox have been doing damage control, even issuing a joint statement assuring the public that the digital currency is safe to use and trade. However, one U.S. regulator has also issued a statement—warning the public about the safety of it.
Joseph Borge, who heads up the Alabama Securities Commission, issued a warning about the financial risks of using and trading bitcoin. The regulator said although the digital currency isn’t illegal, there is no protection for consumers, and investors have been having difficulties turning it into actual profits.
“The risk of using Bitcoin may be off the charts!” he said in a statement. “When using Bitcoin for investing, it is difficult to seek any protection or recourse for losses due to fraudulent schemes.”