Mt. Gox Bitcoin Exchange Goes Offline as Peers Lash Out at Firm

Bloomberg News

Mt. Gox, the Bitcoin exchange that halted withdrawals this month, went offline as industry peers distanced themselves from the Tokyo-based company in an effort to defend the virtual currency.

Efforts to reach the www.mtgox.com website today directed users to a blank white page, a day after Mt. Gox Chief Executive OfficerMark Karpeles resigned from the Bitcoin Foundation, a key advocacy group for the digital money.

'While we are unable to comment on whether or not Mt. Gox's business operations employed operational best practices and reasonable accounting procedures, we can assure the public that the Bitcoin protocol is functioning properly,' the foundation said in an e-mailed statement.

Mt. Gox, one of the first exchanges, said this month that it identified a bug that enables people to withdraw the same Bitcoins more than once, leaving it vulnerable to hackers. Prices quoted on the exchange plunged on speculation that account holders wouldn't be able to get their coins back.

Mt. Gox spokeswoman Reina Matsushita didn't immediately reply to a phone message and e-mail seeking comment.

Bitcoin prices fell 11 percent to $485.75 at 5:57 a.m. London time, according to the CoinDesk Bitcoin Price Index.

Coinbase Inc., a Bitcoin wallet operator, criticized Mt. Gox today and sought to reassure users of the virtual currency that their funds are safe.

Trust Violation

'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,' Coinbase said in a joint statement on its website with peers Kraken, BitStamp, Circle, and BTC China.

'As with any new industry, there are certain bad actors that need to be weeded out, and that is what we are seeing today,' Coinbase said in the statement.

Bitcoin was introduced in 2008 by a programmer or group of programmers under the name Satoshi Nakamoto and has since gained traction with merchants around the world. The digital money has no central issuing authority, and uses a public ledger to verify transactions while preserving users' anonymity. Since at least 2011, enthusiasts have been trading Bitcoins for dollars and other traditional currencies, and in early 2013 Mt. Gox was one of the biggest exchanges.

To contact the reporters on this story: Pavel Alpeyev in Tokyo at palpeyev@bloomberg.net; Carter Dougherty in Washington at cdougherty6@bloomberg.net

To contact the editor responsible for this story: Chitra Somayaji at csomayaji@bloomberg.net