Less than a year ago when we took a long look at Bitcoin, exchange Mt. Gox reportedly handled some 80 percent of global traffic in the digital currency. Tonight however, the exchange's website is offline, all tweets have been deleted from its account, and customers are unsure what will happen to fiat currency (cash) or Bitcoin that it holds. There were signs of trouble before this however, as Mt. Gox hasn't been the leading Bitcoin exchange since late last year, and it halted customer withdrawals on February 7th. The Bitcoin Foundation, which advocates for the digital currency, announced that Mt. Gox CEO Mark Karpeles resigned on Sunday. A price index from digital currency tracker CoinDesk currently shows the value of Bitcoin has dropped $100 in 12 hours to $463, while Coinbase lists a buy price of $448.
Prices for Bitcoin on Mt. Gox had fallen as low as $135, as the exchange issued a statement on the 17th that it had halted withdrawals while dealing with security issues. Rumors have flown about what's going on, and Reddit poster relliMmoT, who posted the screenshot above, reports trading halted at 8:59PM ET before the site went offline. Several other companies involved in digital currency including Coinbase, Blockchain.info, Circle, Kraken, Bitstamp.net and BTC China have issued a joint statement in response, decrying Mt. Gox's "tragic violation" of user trust. They're also promising to reassure customers and the public about their security, and to "lead the way" in consumer protection measures. Curiously, the statement originally referred to the exchange as insolvent (and still does on Circle), but that reference has been removed. According to Re/code a spokesman for the group stated that the troubled exchange has informed others that it will file for bankruptcy, but that can't be confirmed at this time.
Update: Several Twitter users have noticed a change in Mt. Gox's previously DOA website. Instead of simply failing to load, as of 4AM ET or so, it has switched to a blank page with HTML indicating "put announce for mtgox acq here." Is someone about to step in and clean up the mess? If and when we hear something definitive, we will let you know.
Update 2 (9AM ET): Coindesk says domain investor Andy Booth has confirmed the sale of the Gox.com domain to Mt. Gox CEO Mark Karpeles. This is particularly notable, because it lends credibility to an alleged pitch document originally posted by "two bit idiot" with an appeal to potential investors for relaunching Mt. Gox. According to the document (here and embedded after the break), the exchange has significantly more liabilities than assets while suffering from "massive robbery and poor Bitcoin accounting." Other than planning for a replacement CEO, it closes by pushing for a transition to "Gox," and offering limited withdrawals as it generates revenue to pay back stakeholders.
Update 3 (11AM ET): Mt. Gox has released an official statement saying that it has closed all transactions as a precaution to protect the site and its users. Unfortunately, it's not entirely clear what the team is protecting users from. Perhaps its the volatility introduced by the domain changing hands or an impeding bankruptcy proceeding. Or, maybe, it's somehow related to the more advanced version of the Pony botnet that's been making the rounds -- but that seems unlikely. The entire statement is below.
Dear MtGox Customers,
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.