Dauntless
100 TW
But does this Knight guy still have all his bitcoins?
Is this the same KnightMB that sold us out?
- Thread starter liveforphysics
- Start date
dnmun
1 PW
Feb. 24, 2014, 2:59 p.m. EST
Regulator to sound alarm on bitcoin
A warning to some users to stop trading in the virtual currency
By Chuck Jaffe, MarketWatch
While plenty of consumers and investors ponder both the value and future of bitcoin, MarketWatch has learned that one state securities regulator is poised to issue a warning about dealing with exchanges that handle trading in the virtual currency.
Joseph Borg, state securities administrator in Alabama and a past president of the North American State Securities Administrators Association, says he plans to issue a consumer alert Tuesday, suggesting that if consumers and investors have trouble redeeming bitcoins or cashing out of their accounts, they stop trading—or adding to their holdings on account—until issues are resolved.
Borg has been involved in a wide range of high-profile cases in his 20 years on the Alabama Securities Commission perhaps most notably pushing for the formation of the multi-state task force that ultimately shut down Stratton Oakmont, the investment firm that was the basis for the recent movie “The Wolf of Wall Street.”
That’s particularly bad news for Mt. Gox, the largest bitcoin exchange, as Borg says his move was prompted by seeing a string of correspondence showing the frustrations some Gox customers have had in trying to get their money out.
After exchanging emails or chatting with about 60 crypto-currency traders (some have already moved away from BTC), it’s clear to me that issues related to making withdrawals from one’s accounts are all too common, with some describing the money being held in “Mt. Gox jail.”
“If it was an investment we were talking about, we’d be moving to shut somebody down or to make them step up and take care of business properly.”
Joseph Borg, state securities administrator in Alabama and a past president of the North American State Securities Administrators Association
Investors describe repeatedly being asked to provide information that any reputable financial company should not have had to request, such as linked bank account numbers, amounts on account with the exchange—both in bitcoins and in dollars—and more. Expedited requests—where customers were willing to pay fees of 5% to have withdrawals processed “manually”—wound up taking weeks and were going unfilled; Borg noted that, in this day and age, any suggestion that “manual processing” is faster is alarming.
Borg says he’ll cite recent reports from a survey from CoinDesk, a leading bitcoin news/information site, showing that nearly two-thirds of Mt. Gox users were still awaiting funds; some had waited as long as three months. He mentioned numerous examples—again, in some cases after looking at emails Mt. Gox users shared with MarketWatch—in saying, “If it was an investment we were talking about, we’d be moving to shut somebody down or to make them step up and take care of business properly.…If it took you a month or two or three to get your money out of a brand-name brokerage firm, you’d be worried that something bad is going on, and that’s with a firm where you really aren’t worried that your money is gone…Their experiences, honestly, look very bad.”
More than a dozen regulators I spoke with for this column said they saw issues exactly in line with Borg’s concerns, but felt that bitcoin exchanges were out of their purview, even if the customers—the theoretical victims if an exchange were to collapse—were in their state or region. It’s largely out of the regulators’ purview because most of the operators are located offshore.
“Dealing with these exchanges should be no different than dealing with your bank or your financial institution,” Borg said, “and we would tell you that you never do business with a bank that does not know you have money on account, or that is asking for your passwords or that doesn’t seem to remember the account links you established when you started the account. Now we are saying that you should never do business with a bitcoin exchange that has the same problems, or that has to ask you how much bitcoin you’ve got.”
Borg noted that the visible issues some investors have had with certain exchanges might have investors wondering if the entire crypto-currency world is a rip-off. But he stopped far short of that kind of warning, and said it’s entirely possible that investors’ experiences could vary entirely based on how they trade bitcoin, the same way stock investors would have different experiences using a respected brokerage firm and a boiler-room shop. Gox is arguably the biggest name, but it’s clear from my discussions with traders that it is also the operation that gets the least respect, particularly among veteran traders. Mt. Gox did not respond to a request for comment.
Borg did say—and suggest that his published warning will say—that the validity of any crypto-currency “is a matter of perception.”
The big issue is not the value of the currency so much as “execution” and “settlement” of transactions.
Because crypto-currencies aren’t backed by any government and operating, in most cases, through offshore exchanges, most regulators have been watching the evolution of these issues into investments without feeling like they have any jurisdiction.
The bitcoin users I’ve spoken to are quick to acknowledge that the bad experiences are mixed in with the good. A number have told me that they believe that Mt. Gox will fail—and must—for bitcoin to move forward and build on its reputation.
Even as bitcoin becomes more mainstream, however, there are questions. A bitcoin automated-teller machine was installed recently in Boston’s South Station, and was quickly overrun with interest; that said, a local television station reported that one issue with using bitcoin was that the $21 they put into the crypto-currency was worth just over $19 when they went to use it a short-time later at Thelonious Monkfish, a Cambridge fusion restaurant that accepts bitcoin for payment. The difference was simply the minute-by-minute fluctuations in the bitcoin exchange rate.
Bitcoin users—in fact users of the nearly 100 less well-known crypto-currencies currently in early trading stages around the globe—seem willing to overlook a lot of issues because the currency is new and emerging, and believe they will be proven right in the end about the profit potential in trading virtual currencies.
It doesn’t matter to them that bitcoin and the other currencies sound a bit like a story from a sci-fi movie script, or that the currency was born less than a decade ago, or that it has no government backing. Those facts, if anything, arouse interest in traders rather than temper it.
That’s why Borg felt he had to become the first regulator to step in.
“If someone wants to give this a try and they know what they are getting into, fine,” he said. “I can’t say this is an investment scam or a scheme. But I can say something here that I think applies to all investments—but especially anything where you really can’t expect to have any legal recourse if things go bad: if you try trading these things and you can’t get your money out, maybe you should stop right there until you can. Sure, it’s a new thing, but that doesn’t mean that the same old warning signs won’t still be a clue that you are headed to trouble if you keep going.”
Regulator to sound alarm on bitcoin
A warning to some users to stop trading in the virtual currency
By Chuck Jaffe, MarketWatch
While plenty of consumers and investors ponder both the value and future of bitcoin, MarketWatch has learned that one state securities regulator is poised to issue a warning about dealing with exchanges that handle trading in the virtual currency.
Joseph Borg, state securities administrator in Alabama and a past president of the North American State Securities Administrators Association, says he plans to issue a consumer alert Tuesday, suggesting that if consumers and investors have trouble redeeming bitcoins or cashing out of their accounts, they stop trading—or adding to their holdings on account—until issues are resolved.
Borg has been involved in a wide range of high-profile cases in his 20 years on the Alabama Securities Commission perhaps most notably pushing for the formation of the multi-state task force that ultimately shut down Stratton Oakmont, the investment firm that was the basis for the recent movie “The Wolf of Wall Street.”
That’s particularly bad news for Mt. Gox, the largest bitcoin exchange, as Borg says his move was prompted by seeing a string of correspondence showing the frustrations some Gox customers have had in trying to get their money out.
After exchanging emails or chatting with about 60 crypto-currency traders (some have already moved away from BTC), it’s clear to me that issues related to making withdrawals from one’s accounts are all too common, with some describing the money being held in “Mt. Gox jail.”
“If it was an investment we were talking about, we’d be moving to shut somebody down or to make them step up and take care of business properly.”
Joseph Borg, state securities administrator in Alabama and a past president of the North American State Securities Administrators Association
Investors describe repeatedly being asked to provide information that any reputable financial company should not have had to request, such as linked bank account numbers, amounts on account with the exchange—both in bitcoins and in dollars—and more. Expedited requests—where customers were willing to pay fees of 5% to have withdrawals processed “manually”—wound up taking weeks and were going unfilled; Borg noted that, in this day and age, any suggestion that “manual processing” is faster is alarming.
Borg says he’ll cite recent reports from a survey from CoinDesk, a leading bitcoin news/information site, showing that nearly two-thirds of Mt. Gox users were still awaiting funds; some had waited as long as three months. He mentioned numerous examples—again, in some cases after looking at emails Mt. Gox users shared with MarketWatch—in saying, “If it was an investment we were talking about, we’d be moving to shut somebody down or to make them step up and take care of business properly.…If it took you a month or two or three to get your money out of a brand-name brokerage firm, you’d be worried that something bad is going on, and that’s with a firm where you really aren’t worried that your money is gone…Their experiences, honestly, look very bad.”
More than a dozen regulators I spoke with for this column said they saw issues exactly in line with Borg’s concerns, but felt that bitcoin exchanges were out of their purview, even if the customers—the theoretical victims if an exchange were to collapse—were in their state or region. It’s largely out of the regulators’ purview because most of the operators are located offshore.
“Dealing with these exchanges should be no different than dealing with your bank or your financial institution,” Borg said, “and we would tell you that you never do business with a bank that does not know you have money on account, or that is asking for your passwords or that doesn’t seem to remember the account links you established when you started the account. Now we are saying that you should never do business with a bitcoin exchange that has the same problems, or that has to ask you how much bitcoin you’ve got.”
Borg noted that the visible issues some investors have had with certain exchanges might have investors wondering if the entire crypto-currency world is a rip-off. But he stopped far short of that kind of warning, and said it’s entirely possible that investors’ experiences could vary entirely based on how they trade bitcoin, the same way stock investors would have different experiences using a respected brokerage firm and a boiler-room shop. Gox is arguably the biggest name, but it’s clear from my discussions with traders that it is also the operation that gets the least respect, particularly among veteran traders. Mt. Gox did not respond to a request for comment.
Borg did say—and suggest that his published warning will say—that the validity of any crypto-currency “is a matter of perception.”
The big issue is not the value of the currency so much as “execution” and “settlement” of transactions.
Because crypto-currencies aren’t backed by any government and operating, in most cases, through offshore exchanges, most regulators have been watching the evolution of these issues into investments without feeling like they have any jurisdiction.
The bitcoin users I’ve spoken to are quick to acknowledge that the bad experiences are mixed in with the good. A number have told me that they believe that Mt. Gox will fail—and must—for bitcoin to move forward and build on its reputation.
Even as bitcoin becomes more mainstream, however, there are questions. A bitcoin automated-teller machine was installed recently in Boston’s South Station, and was quickly overrun with interest; that said, a local television station reported that one issue with using bitcoin was that the $21 they put into the crypto-currency was worth just over $19 when they went to use it a short-time later at Thelonious Monkfish, a Cambridge fusion restaurant that accepts bitcoin for payment. The difference was simply the minute-by-minute fluctuations in the bitcoin exchange rate.
Bitcoin users—in fact users of the nearly 100 less well-known crypto-currencies currently in early trading stages around the globe—seem willing to overlook a lot of issues because the currency is new and emerging, and believe they will be proven right in the end about the profit potential in trading virtual currencies.
It doesn’t matter to them that bitcoin and the other currencies sound a bit like a story from a sci-fi movie script, or that the currency was born less than a decade ago, or that it has no government backing. Those facts, if anything, arouse interest in traders rather than temper it.
That’s why Borg felt he had to become the first regulator to step in.
“If someone wants to give this a try and they know what they are getting into, fine,” he said. “I can’t say this is an investment scam or a scheme. But I can say something here that I think applies to all investments—but especially anything where you really can’t expect to have any legal recourse if things go bad: if you try trading these things and you can’t get your money out, maybe you should stop right there until you can. Sure, it’s a new thing, but that doesn’t mean that the same old warning signs won’t still be a clue that you are headed to trouble if you keep going.”
dnmun
1 PW
Feb. 24, 2014, 5:04 a.m. EST
Mt. Gox CEO resigns from Bitcoin Foundation board
By Robin Sidel
Mark Karpelès, chief executive officer of Mt. Gox, the embattled Toyko-based bitcoin exchange, resigned on Sunday from the board of the Bitcoin Foundation, according to a person familiar with the situation.
The Bitcoin Foundation confirmed in a statement on its website that Mt. Gox had resigned its board seat and thanked Mt. Gox for its efforts in launching the group.
The move comes amid a string of longstanding technical issues that began last summer when Mt. Gox halted customer withdrawals in U.S. dollars.
The problems became more severe earlier this month when Mt. Gox halted all customer withdrawals, saying that a bug in the software for bitcoin allowed some users to alter transactions. The problems prompted CoinDesk to remove Mt. Gox from its bitcoin-pricing index earlier this month. The exchange told customers last week that it was still working on “reinitiating” bitcoin withdrawals.
Mt. Gox is one of several industry representatives on the board of the foundation, a trade organization that advocates for the virtual currency.
Many investors in the bitcoin community had called for the resignation of Karpelès from the board of the Bitcoin Foundation, including a British-based marketing consultant who has posted an online petition calling for Karpelès’s removal.
A phone call to Mt. Gox’s office in Tokyo rang unanswered.
It is the foundation’s second high-profile resignation in the past month. Board member Charles Shrem stepped down in late January after being arrested and charged with money laundering in connection with his bitcoin company. Shrem has pleaded not guilty.
Mt. Gox bitcoins traded at around $191 in midday Monday trading in Tokyo, while the Coindesk index bitcoin traded at around $578.
The “discount at Mt Gox reflects the markets ongoing belief that bankruptcy is a high possibility,” said Mark T. Williams, who teaches finance at Boston University in an email on Friday. “They have a considerable customer base that remains prevented from getting their money out,” said Williams, who has expressed skepticism about bitcoin.
Eric Bosma, a 60-year-old part-time health-care worker from Mission, British Columbia, said he has been trading bitcoins for the past six months to try to earn some extra income, but hasn’t been able to withdraw his about 5.25 bitcoin in Mt. Gox despite repeated attempts. “I have contacted Mt. Gox many, many times in the past two weeks and all I get is what seems to be bot emails,” he said in an email. “All I want is my bitcoin back.”
Mt. Gox CEO resigns from Bitcoin Foundation board
By Robin Sidel
Mark Karpelès, chief executive officer of Mt. Gox, the embattled Toyko-based bitcoin exchange, resigned on Sunday from the board of the Bitcoin Foundation, according to a person familiar with the situation.
The Bitcoin Foundation confirmed in a statement on its website that Mt. Gox had resigned its board seat and thanked Mt. Gox for its efforts in launching the group.
The move comes amid a string of longstanding technical issues that began last summer when Mt. Gox halted customer withdrawals in U.S. dollars.
The problems became more severe earlier this month when Mt. Gox halted all customer withdrawals, saying that a bug in the software for bitcoin allowed some users to alter transactions. The problems prompted CoinDesk to remove Mt. Gox from its bitcoin-pricing index earlier this month. The exchange told customers last week that it was still working on “reinitiating” bitcoin withdrawals.
Mt. Gox is one of several industry representatives on the board of the foundation, a trade organization that advocates for the virtual currency.
Many investors in the bitcoin community had called for the resignation of Karpelès from the board of the Bitcoin Foundation, including a British-based marketing consultant who has posted an online petition calling for Karpelès’s removal.
A phone call to Mt. Gox’s office in Tokyo rang unanswered.
It is the foundation’s second high-profile resignation in the past month. Board member Charles Shrem stepped down in late January after being arrested and charged with money laundering in connection with his bitcoin company. Shrem has pleaded not guilty.
Mt. Gox bitcoins traded at around $191 in midday Monday trading in Tokyo, while the Coindesk index bitcoin traded at around $578.
The “discount at Mt Gox reflects the markets ongoing belief that bankruptcy is a high possibility,” said Mark T. Williams, who teaches finance at Boston University in an email on Friday. “They have a considerable customer base that remains prevented from getting their money out,” said Williams, who has expressed skepticism about bitcoin.
Eric Bosma, a 60-year-old part-time health-care worker from Mission, British Columbia, said he has been trading bitcoins for the past six months to try to earn some extra income, but hasn’t been able to withdraw his about 5.25 bitcoin in Mt. Gox despite repeated attempts. “I have contacted Mt. Gox many, many times in the past two weeks and all I get is what seems to be bot emails,” he said in an email. “All I want is my bitcoin back.”
dnmun
1 PW
Mt. Gox bitcoin site disappears
By Michael Kitchen, MarketWatch
LOS ANGELES (MarketWatch) — The popular bitcoin exchange Mt. Gox went blank Monday evening, with reports saying that trading was halted earlier and that the website may have been deleted.
A Business Insider report Monday cited customers of the Tokyo-based bitcoin platform as saying they received messages saying trading activity was disabled, while two sites monitoring Mt. Gox said there was currently no activity.
A subsequent Wall Street Journal report said the entire site — mtgox.com — appeared to have been deleted, as accessing the site yielded an answer from the site’s server but displayed nothing.
Business Insider reported that the issue could be temporary, given a tech glitch earlier Monday at popular bitcoin wallet service Blockchain.info.
The issues at Mt. Gox followed the surprise resignation of Gox executives from the Bitcoin Foundation, prompting the firm’s bitcoins to trade at a sharp discount to the currency’s rates at other bitcoin dealers.
The disappearance of the Mt. Gox site also came after chief executives of six other large bitcoin exchanges and businesses sought to assure customers that their funds were safe.
A separate Wall Street Journal report said the chief executives of the firms — Blockchain.info, exchanges Bitstamp, BTC China and Kraken, along with broker/payment processor Coinbase, and payment firm Circle Internet Financia — issued a statement touching on concerns of insolvency at 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,” the report cited the statement as saying.
By Michael Kitchen, MarketWatch
LOS ANGELES (MarketWatch) — The popular bitcoin exchange Mt. Gox went blank Monday evening, with reports saying that trading was halted earlier and that the website may have been deleted.
A Business Insider report Monday cited customers of the Tokyo-based bitcoin platform as saying they received messages saying trading activity was disabled, while two sites monitoring Mt. Gox said there was currently no activity.
A subsequent Wall Street Journal report said the entire site — mtgox.com — appeared to have been deleted, as accessing the site yielded an answer from the site’s server but displayed nothing.
Business Insider reported that the issue could be temporary, given a tech glitch earlier Monday at popular bitcoin wallet service Blockchain.info.
The issues at Mt. Gox followed the surprise resignation of Gox executives from the Bitcoin Foundation, prompting the firm’s bitcoins to trade at a sharp discount to the currency’s rates at other bitcoin dealers.
The disappearance of the Mt. Gox site also came after chief executives of six other large bitcoin exchanges and businesses sought to assure customers that their funds were safe.
A separate Wall Street Journal report said the chief executives of the firms — Blockchain.info, exchanges Bitstamp, BTC China and Kraken, along with broker/payment processor Coinbase, and payment firm Circle Internet Financia — issued a statement touching on concerns of insolvency at 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,” the report cited the statement as saying.
dnmun
1 PW
February 25, 2014, 7:23 AM ET
Mt. Gox’s hidden note hints at hopes for acquisition amid tales of bitcoin losses
That’s with good reason, after the Mt. Gox website went blank late Monday, amid rumors of insolvency. There’s also talk of a theft of more than 700,000 bitcoins from the Tokyo-based bitcoin exchange, which halted withdrawals earlier this month. Some raised flags of suspicion after noticing that all tweets had disappeared from Mt. Gox’s Twitter account.
Now Coindesk and others are tweeting out something unusual in the source code for the site – a hidden note in the HTML saying the following: <!– put announce for mtgox acq here –>
On social media, speculation was rife that this line of code meant the company was indeed gearing up for a sale. Bitcoin-focused publication Coindesk reported that a document – “Crisis Strategy Draft” — has surfaced, with items saying the bitcoin exchange will close for a month as part of a re-branding plan, and that Mark Karpeles –who just resigned from the Bitcoin Foundation board — will leave his post as chief executive. MarketWatch has approached Mt. Gox to confirm the plan but hasn’t heard back.
Jeremy Bonney, product manager at Coindesk, said in an email that it didn’t make much sense for Mt. Gox to put that source code in again, but many decisions the company has made in the last year “in retrospect seem very irresponsible.”
“I can’t speculate as to who would buy Mt. Gox, but if someone does, they are certainly going to have a tough time turning around its fortunes. Mt. Gox has been dying a slow death for a long time now, but it’s getting closer and closer to the grave.”
The price of a bitcoin has been volatile on the Coindesk index, dropping to as low as $418.76 and currently down 7.2% at $505.87. Over on Fiatleak, which shows the world’s currencies moving into bitcoin in real time, it seems bitcoins are flowing like a river into China.
For investors at Mt. Gox, news of a buyer for the exchange would be better than a continued blank website.
Over at Reddit, there were plenty of battle scars and tales of woe at the ‘Gox horror story thread: How much did you lose?’ One user of the social platform, calling himself goxloser posted this several hours ago: “I am the biggest loser at 4700+BTC, offering up a screenshot of his account a few days ago. “I don’t know how dying feels, but I’m pretty sure that’s how I feel now,” goxloser said to responses estimating he lost over $2 million worth of bitcoin. (MarketWatch can’t verify the stories or identities of the Reddit users.)
Another Reddit user with the handle ebass, said that “144 BTC and 100 were entrusted to me by a friend because he wanted to get into cryptocurrency. I haven’t told him what happened just now though he has been updated all this while. I don’t know how to.”
User mtreme reportedly invested his life savings — $357,000 — in bitcoin via Mt. Gox, to try and build for his son’s education fund, he said, while another also spoke of losing college-tuition money. And lots of others talked about desperate and futile attempts to get their bitcoins out when they started realizing something might be wrong, garnering sympathy, but also plenty of “What were you thinking,” type comments from the Reddit crowd.
Mt. Gox’s hidden note hints at hopes for acquisition amid tales of bitcoin losses
That’s with good reason, after the Mt. Gox website went blank late Monday, amid rumors of insolvency. There’s also talk of a theft of more than 700,000 bitcoins from the Tokyo-based bitcoin exchange, which halted withdrawals earlier this month. Some raised flags of suspicion after noticing that all tweets had disappeared from Mt. Gox’s Twitter account.
Now Coindesk and others are tweeting out something unusual in the source code for the site – a hidden note in the HTML saying the following: <!– put announce for mtgox acq here –>
On social media, speculation was rife that this line of code meant the company was indeed gearing up for a sale. Bitcoin-focused publication Coindesk reported that a document – “Crisis Strategy Draft” — has surfaced, with items saying the bitcoin exchange will close for a month as part of a re-branding plan, and that Mark Karpeles –who just resigned from the Bitcoin Foundation board — will leave his post as chief executive. MarketWatch has approached Mt. Gox to confirm the plan but hasn’t heard back.
Jeremy Bonney, product manager at Coindesk, said in an email that it didn’t make much sense for Mt. Gox to put that source code in again, but many decisions the company has made in the last year “in retrospect seem very irresponsible.”
“I can’t speculate as to who would buy Mt. Gox, but if someone does, they are certainly going to have a tough time turning around its fortunes. Mt. Gox has been dying a slow death for a long time now, but it’s getting closer and closer to the grave.”
The price of a bitcoin has been volatile on the Coindesk index, dropping to as low as $418.76 and currently down 7.2% at $505.87. Over on Fiatleak, which shows the world’s currencies moving into bitcoin in real time, it seems bitcoins are flowing like a river into China.
For investors at Mt. Gox, news of a buyer for the exchange would be better than a continued blank website.
Over at Reddit, there were plenty of battle scars and tales of woe at the ‘Gox horror story thread: How much did you lose?’ One user of the social platform, calling himself goxloser posted this several hours ago: “I am the biggest loser at 4700+BTC, offering up a screenshot of his account a few days ago. “I don’t know how dying feels, but I’m pretty sure that’s how I feel now,” goxloser said to responses estimating he lost over $2 million worth of bitcoin. (MarketWatch can’t verify the stories or identities of the Reddit users.)
Another Reddit user with the handle ebass, said that “144 BTC and 100 were entrusted to me by a friend because he wanted to get into cryptocurrency. I haven’t told him what happened just now though he has been updated all this while. I don’t know how to.”
User mtreme reportedly invested his life savings — $357,000 — in bitcoin via Mt. Gox, to try and build for his son’s education fund, he said, while another also spoke of losing college-tuition money. And lots of others talked about desperate and futile attempts to get their bitcoins out when they started realizing something might be wrong, garnering sympathy, but also plenty of “What were you thinking,” type comments from the Reddit crowd.
dnmun
1 PW
Apparent Theft at Mt. Gox Shakes Bitcoin World
By NATHANIEL POPPER and RACHEL ABRAMS FEB. 25, 2014
The most prominent Bitcoin exchange appeared to be on the verge of collapse late Monday, raising questions about the future of a volatile marketplace.
On Monday night, a number of leading Bitcoin companies jointly announced that Mt. Gox, the largest exchange for most of Bitcoin’s existence, was planning to file for bankruptcy after months of technological problems and what appeared to have been a major theft. A document circulating widely in the Bitcoin world said the company had lost 744,000 Bitcoins in a theft that had gone unnoticed for years. That would be about 6 percent of the 12.4 million Bitcoins in circulation.
While Mt. Gox did not respond to numerous requests for comments, and the companies issuing the statement scrambled to determine the exact situation at Mt. Gox, which is based in Japan, the news helped push the price of a single Bitcoin below $500 for the first time since November, when it began a spike that took it above $1,200.
But at the same time that the news about Mt. Gox was emerging, a New York firm announced plans to create an exchange that could draw the world’s largest banks into the virtual currency market for the first time.
The new exchange is being put together by SecondMarket, which rose to fame a few years ago after creating a platform for buying and selling shares of companies like Twitter and Facebook before they went public.
Without the trouble at Mt. Gox, the SecondMarket plans would have been seen as a major boon for virtual currencies, providing a potential entry point into the Bitcoin market for large banks, which have so far avoided virtual currencies as their price has skyrocketed.
Barry Silbert, SecondMarket’s chief executive, said that he had already talked with several banks and financial companies about joining the new exchange, along with financial regulators, and that he hoped to have it in operation this summer.
But plans for any new venture will be tested by the collapse of Mt. Gox, which could shake the faith of early Bitcoin adopters. Ryan Galt, a blogger who writes frequently about Bitcoin and was one of the first to circulate the news about Mt. Gox, wrote on Monday: “I do believe that this is one of the existential threats to Bitcoin that many have feared and have personally sold all of my Bitcoin holdings.”
On Monday, Mt. Gox took down all of its previous posts on Twitter, one day after its chief executive, Mark Karpeles, resigned from the board of the Bitcoin Foundation, a nonprofit that advocates for virtual currencies.
A statement from the chief executives of Bitcoin companies like Coinbase, Circle, Blockchain.info and Payward, said that the “tragic violation of the trust of users of Mt. Gox was the result of one company’s abhorrent actions and does not reflect the resilience or value of Bitcoin and the digital currency industry.”
The events are in keeping with the stark ups and downs of Bitcoin’s short existence.
Released in 2009 by an anonymous creator known as Satoshi Nakamoto, the Bitcoin program runs on the computers of anyone who joins in, and it is set to release only 21 million coins in regular increments. The coins can be moved between digital wallets using secret passwords.
While Bitcoin fans have said the technology could provide a revolutionary new way of moving money around the world, skeptics have viewed it variously as a Ponzi scheme or an investment susceptible to fraud and theft.
Many leading names in the Bitcoin community were still trying to determine the scope and potential consequences of the troubles at Mt. Gox. A document detailing the purported theft, labeled “Crisis Strategy Draft,” appeared to come from Mt. Gox.
While officials at the Bitcoin Foundation could not verify the origins of the document, they were preparing for the closure of Mt. Gox.
Patrick Murck, the foundation’s general counsel, said that “this incident just demonstrates the need for initiatives by responsible individuals and responsible members of the Bitcoin community like what’s being described” in SecondMarket’s initiative.
Mt. Gox’s difficulties this week are only the latest in a long line of problems at the Tokyo-based exchange. Created in 2010, Mt. Gox quickly became the most popular place to buy and sell Bitcoins. But the firm has suffered several intrusions and technological mishaps, which have led to steep declines in the currency’s price. A few weeks ago the company stopped allowing its customers to withdraw Bitcoins after it said it had discovered a flaw in some of the basic Bitcoin computer code.
While other exchanges were briefly hit by problems, they came back online. Mt. Gox never opened up again, prompting speculation about its future.
Until now, the major Bitcoin exchanges have all allowed anyone from the public to buy and sell virtual currency. SecondMarket’s plan is to create a platform more like the New York Stock Exchange, where only large institutions can join and trade.
Mr. Silbert says he will only open the exchange once they have several regulated financial institutions signed on as members. His hope, he says, is to give them partial ownership so that they have an incentive to trade there.
For much of Bitcoin’s life, banks have viewed the virtual currency with either derision or dismissiveness.
Recently, though, a number of banks have released research reports that have been less negative. A December report from Bank of America said that virtual currencies could become an important new part of the payment system, allowing money to move more cheaply than it does with credit cards and money transmitters like Western Union.
The statement from the Bitcoin companies on Monday night, which was not signed by Mr. Silbert, said that “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.”
By NATHANIEL POPPER and RACHEL ABRAMS FEB. 25, 2014
The most prominent Bitcoin exchange appeared to be on the verge of collapse late Monday, raising questions about the future of a volatile marketplace.
On Monday night, a number of leading Bitcoin companies jointly announced that Mt. Gox, the largest exchange for most of Bitcoin’s existence, was planning to file for bankruptcy after months of technological problems and what appeared to have been a major theft. A document circulating widely in the Bitcoin world said the company had lost 744,000 Bitcoins in a theft that had gone unnoticed for years. That would be about 6 percent of the 12.4 million Bitcoins in circulation.
While Mt. Gox did not respond to numerous requests for comments, and the companies issuing the statement scrambled to determine the exact situation at Mt. Gox, which is based in Japan, the news helped push the price of a single Bitcoin below $500 for the first time since November, when it began a spike that took it above $1,200.
But at the same time that the news about Mt. Gox was emerging, a New York firm announced plans to create an exchange that could draw the world’s largest banks into the virtual currency market for the first time.
The new exchange is being put together by SecondMarket, which rose to fame a few years ago after creating a platform for buying and selling shares of companies like Twitter and Facebook before they went public.
Without the trouble at Mt. Gox, the SecondMarket plans would have been seen as a major boon for virtual currencies, providing a potential entry point into the Bitcoin market for large banks, which have so far avoided virtual currencies as their price has skyrocketed.
Barry Silbert, SecondMarket’s chief executive, said that he had already talked with several banks and financial companies about joining the new exchange, along with financial regulators, and that he hoped to have it in operation this summer.
But plans for any new venture will be tested by the collapse of Mt. Gox, which could shake the faith of early Bitcoin adopters. Ryan Galt, a blogger who writes frequently about Bitcoin and was one of the first to circulate the news about Mt. Gox, wrote on Monday: “I do believe that this is one of the existential threats to Bitcoin that many have feared and have personally sold all of my Bitcoin holdings.”
On Monday, Mt. Gox took down all of its previous posts on Twitter, one day after its chief executive, Mark Karpeles, resigned from the board of the Bitcoin Foundation, a nonprofit that advocates for virtual currencies.
A statement from the chief executives of Bitcoin companies like Coinbase, Circle, Blockchain.info and Payward, said that the “tragic violation of the trust of users of Mt. Gox was the result of one company’s abhorrent actions and does not reflect the resilience or value of Bitcoin and the digital currency industry.”
The events are in keeping with the stark ups and downs of Bitcoin’s short existence.
Released in 2009 by an anonymous creator known as Satoshi Nakamoto, the Bitcoin program runs on the computers of anyone who joins in, and it is set to release only 21 million coins in regular increments. The coins can be moved between digital wallets using secret passwords.
While Bitcoin fans have said the technology could provide a revolutionary new way of moving money around the world, skeptics have viewed it variously as a Ponzi scheme or an investment susceptible to fraud and theft.
Many leading names in the Bitcoin community were still trying to determine the scope and potential consequences of the troubles at Mt. Gox. A document detailing the purported theft, labeled “Crisis Strategy Draft,” appeared to come from Mt. Gox.
While officials at the Bitcoin Foundation could not verify the origins of the document, they were preparing for the closure of Mt. Gox.
Patrick Murck, the foundation’s general counsel, said that “this incident just demonstrates the need for initiatives by responsible individuals and responsible members of the Bitcoin community like what’s being described” in SecondMarket’s initiative.
Mt. Gox’s difficulties this week are only the latest in a long line of problems at the Tokyo-based exchange. Created in 2010, Mt. Gox quickly became the most popular place to buy and sell Bitcoins. But the firm has suffered several intrusions and technological mishaps, which have led to steep declines in the currency’s price. A few weeks ago the company stopped allowing its customers to withdraw Bitcoins after it said it had discovered a flaw in some of the basic Bitcoin computer code.
While other exchanges were briefly hit by problems, they came back online. Mt. Gox never opened up again, prompting speculation about its future.
Until now, the major Bitcoin exchanges have all allowed anyone from the public to buy and sell virtual currency. SecondMarket’s plan is to create a platform more like the New York Stock Exchange, where only large institutions can join and trade.
Mr. Silbert says he will only open the exchange once they have several regulated financial institutions signed on as members. His hope, he says, is to give them partial ownership so that they have an incentive to trade there.
For much of Bitcoin’s life, banks have viewed the virtual currency with either derision or dismissiveness.
Recently, though, a number of banks have released research reports that have been less negative. A December report from Bank of America said that virtual currencies could become an important new part of the payment system, allowing money to move more cheaply than it does with credit cards and money transmitters like Western Union.
The statement from the Bitcoin companies on Monday night, which was not signed by Mr. Silbert, said that “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.”
dnmun
1 PW
they have a thread on reddit:
http://www.reddit.com/r/Bitcoin/comments/1yv26o/gox_horror_story_thread_how_much_did_you_lose/
http://www.reddit.com/r/Bitcoin/comments/1yv26o/gox_horror_story_thread_how_much_did_you_lose/
Dauntless
100 TW
So will we ever learn how many of the Bitcoins were PAID FOR, or how many created out of thin air? If handfulls of cash paid for a portion at lower valuations at first then the miners were gaining them unpaid for that means there could be less than a penny on the dollar going in and of course no way for there to be any cash to cover its 'Value.' Of course what cash went in is long gone covering costs, anyway.
Imagine being the exchange that sold at the high then covered the sale at less than 1/4th after the fall. 744,000 Bitcoins sold for a billion, then someone stole the 1/4th of that to cover it and they won't pay with the rest?
Government agencies all over the world seeking the chance to blame someone and hang them to pretend they're doing us some good. This will be one hell of a witchhunt. Sure glad I never touched the stuff, too hard to blame me.
Imagine being the exchange that sold at the high then covered the sale at less than 1/4th after the fall. 744,000 Bitcoins sold for a billion, then someone stole the 1/4th of that to cover it and they won't pay with the rest?
Government agencies all over the world seeking the chance to blame someone and hang them to pretend they're doing us some good. This will be one hell of a witchhunt. Sure glad I never touched the stuff, too hard to blame me.
dnmun
1 PW
Mt. Gox collapse riles bitcoin users, spurs policy talk
Prices fall to 3-month lows; Bitcoin CEOs try to shore up sentiment; Japan can’t help
By Saumya Vaishampayan, Barbara Kollmeyer and Michael Kitchen, MarketWatch
NEW YORK (MarketWatch) — The collapse of the bitcoin exchange Mt. Gox triggered shock, outrage, and some I-told-you-sos among users of the digital currency Tuesday as well as renewed calls for regulation.
Response from U.S. authorities stopped short of condemnation, however. Instead, they attributed Mt. Gox’s meltdown, which helped send prices on other exchanges to a three-month low, to a symptom of a young industry.
“As any industry matures, it will face growing pains and there will be individuals who believe they can use the fog of uncertainty to cover up their follies,” said Sen. Tom Carper, head of the Homeland Security and Governmental Affairs Committee, in a statement. Still, he said the Mt. Gox news is “ unacceptable ” and called on U.S. policymakers to provide a clear set of regulations for bitcoin.
Benjamin Lawsky, New York state’s superintendent of financial services, told CNBC he doesn’t think the Mt. Gox scandal will harm bitcoin in the long term. “It may be a significant bump in the road for the development of bitcoin and virtual currencies, but I don’t think it means they’re going away or it’s any kind of death knell,” he told CNBC.
Their statements followed pages of online comments by Mt. Gox users, many of whom were now looking at the possibility that any bitcoin value stored at the exchange was worthless.
Mt. Gox, one of the oldest virtual trading venues and once the largest, told users Tuesday that all trading in the virtual currency on its exchange had been halted. It gave no information about why its website had been wiped clean of information and all transactions had stopped. “A decision was taken to close all transactions for the time being in order to protect the site and our users,” Mt. Gox said in a short statement, its first update to users after trading had been halted for several hours.
Tuesday’s complete trading halt on Mt. Gox was the latest in a series of halts and delays that have plagued the exchange in the past year, along with spotty customer service and a lack of available information for users. Financial authorities in Japan, where Mt. Gox has its physical headquarters, have said that there is nothing they can do for users with bitcoin tied up at Mt. Gox.
That knowledge has been a bitter pill for bitcoin’s early adopters, particularly those who rode the surge in bitcoin prices from about $13 early last year to over $1,000 at the end of the year. Mt. Gox was once the hallmark bitcoin exchange and it continued to attract attention even as it gave up market share. But a new wave of bitcoin entrepreneurs, some of whose firms have attracted funding from high-profile investors, have been quick to dismiss Mt. Gox as a bad actor and emphasize that bitcoin itself remains viable.
“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,” said chief executives of six other bitcoin exchanges and businesses, in a joint statement issued late Monday after Mt. Gox trading appeared to have been halted.
‘I’m over Mt. Gox’
The statement from Tokyo-based Mt. Gox did little to comfort investors with holdings there. Jonathan Waller, 30, told MarketWatch he had more than 200 bitcoins in Mt. Gox, worth more than $27,000 on a price quoted on Mt. Gox 16 hours ago.
“My feeling is [that] they’re never coming back,” said Waller, who is a games developer based in Tokyo and has been involved in the bitcoin space for about three years.
“I’m over Mt. Gox right now. They can promise unicorns...I’m going to ignore them,” he said.
Bitcoin is open-source software code that has been billed as a virtual currency and payments platform. Unlike the dollar or yen, it isn’t created by a central bank; bitcoins are created through a process called mining that pits computers against each other in a race to solve cryptographic problems. The process also verifies transactions on the bitcoin network. Unlike the banking system, it isn’t overseen by regulators.
It has caught the attention of several big-name investors, including Marc Andreessen, a venture capitalist who has said bitcoin offers a huge opportunity in the industry of global remittances, and Tyler and Cameron Winklevoss, who may be best known for their battle with Mark Zuckerberg over who came up with the idea for what became Facebook. But bitcoin also has caught the attention of law enforcement. Last month, the Justice Department announced the arrest of well-known bitcoin entrepreneur Charlie Shrem on charges that included conspiring to commit money laundering.
The end of bitcoin’s Wild West
Bitcoin prices dropped Tuesday across several exchanges in the wake of the Mt. Gox scandal, underscoring the exchange’s weight even as many bitcoin players have denounced the exchange. The CoinDesk bitcoin price index fell to $515.13 in recent trade from $545.32 on Monday. The last price on Mt. Gox was $135, according to bitcoincharts.com. The CoinDesk bitcoin price index has fallen about 40% this month.
“It’s the end of the Wild West for bitcoin,” said Alex Daley, chief technology investment strategist for Casey Research. “It’s the end of this idea that we’re all going to trade bitcoins, we’re all going to own bitcoins,” he said, adding that “I don’t think bitcoin is going anywhere.” Daley said he had mined bitcoin but stopped when it became really competitive. He still owns a small amount.
Troubles for Mt. Gox kicked up earlier in the month when it suspended bitcoin withdrawals due to an issue in the way its software was written that could allow for duplicate transactions. The issue wasn’t just limited to the Mt. Gox; bitcoin exchanges Bitstamp and BTC-e discovered similar issues when they were hit by hackers . Read more: There’s a major lack of understanding at major exchanges about how bitcoins are sent.
“The moral of the story [is] don’t keep your bitcoins in an exchange,” said Waller.
Monday saw the surprise resignation of Mt. Gox executives from the Bitcoin Foundation, prompting the firm’s bitcoins to trade at a sharp discount to the currency’s rates at other bitcoin dealers.
Media reports also alluded to a document circulating in the bitcoin world that said hackers had stolen 744,000 bitcoins, worth around $350 million at current prices, from Mt. Gox in a theft that allegedly had gone on for years. MarketWatch has not seen the document, nor can it verify its authenticity. But if the reports are accurate, the theft would represent about 6% of the 12.4 million bitcoins in circulation.
The emergence of any recourse for investors so far is an open question at best. Japan’s banking watchdog, the Financial Services Agency, told the Wall Street Journal it did not have authority to oversee bitcoin exchanges.
The drama surrounding Mt. Gox on Tuesday also led some to speculate the company might be up for sale, owing to the appearance of something unusual in its source code.
On Reddit, a social-news website, people claimed to have lost thousands of bitcoins and others reported getting out just in time. (MarketWatch can’t verify the stories or identities of the Reddit users.)
One user, who goes by the mtreme handle, reportedly invested his life savings of $357,000 in bitcoin via Mt. Gox, to build his son’s education fund. Many talked about desperate and futile attempts to get their bitcoins out when they started realizing something might be wrong. These elicited sympathy but also plenty of “what were you thinking,” type comments from the Reddit crowd.
Prices fall to 3-month lows; Bitcoin CEOs try to shore up sentiment; Japan can’t help
By Saumya Vaishampayan, Barbara Kollmeyer and Michael Kitchen, MarketWatch
NEW YORK (MarketWatch) — The collapse of the bitcoin exchange Mt. Gox triggered shock, outrage, and some I-told-you-sos among users of the digital currency Tuesday as well as renewed calls for regulation.
Response from U.S. authorities stopped short of condemnation, however. Instead, they attributed Mt. Gox’s meltdown, which helped send prices on other exchanges to a three-month low, to a symptom of a young industry.
“As any industry matures, it will face growing pains and there will be individuals who believe they can use the fog of uncertainty to cover up their follies,” said Sen. Tom Carper, head of the Homeland Security and Governmental Affairs Committee, in a statement. Still, he said the Mt. Gox news is “ unacceptable ” and called on U.S. policymakers to provide a clear set of regulations for bitcoin.
Benjamin Lawsky, New York state’s superintendent of financial services, told CNBC he doesn’t think the Mt. Gox scandal will harm bitcoin in the long term. “It may be a significant bump in the road for the development of bitcoin and virtual currencies, but I don’t think it means they’re going away or it’s any kind of death knell,” he told CNBC.
Their statements followed pages of online comments by Mt. Gox users, many of whom were now looking at the possibility that any bitcoin value stored at the exchange was worthless.
Mt. Gox, one of the oldest virtual trading venues and once the largest, told users Tuesday that all trading in the virtual currency on its exchange had been halted. It gave no information about why its website had been wiped clean of information and all transactions had stopped. “A decision was taken to close all transactions for the time being in order to protect the site and our users,” Mt. Gox said in a short statement, its first update to users after trading had been halted for several hours.
Tuesday’s complete trading halt on Mt. Gox was the latest in a series of halts and delays that have plagued the exchange in the past year, along with spotty customer service and a lack of available information for users. Financial authorities in Japan, where Mt. Gox has its physical headquarters, have said that there is nothing they can do for users with bitcoin tied up at Mt. Gox.
That knowledge has been a bitter pill for bitcoin’s early adopters, particularly those who rode the surge in bitcoin prices from about $13 early last year to over $1,000 at the end of the year. Mt. Gox was once the hallmark bitcoin exchange and it continued to attract attention even as it gave up market share. But a new wave of bitcoin entrepreneurs, some of whose firms have attracted funding from high-profile investors, have been quick to dismiss Mt. Gox as a bad actor and emphasize that bitcoin itself remains viable.
“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,” said chief executives of six other bitcoin exchanges and businesses, in a joint statement issued late Monday after Mt. Gox trading appeared to have been halted.
‘I’m over Mt. Gox’
The statement from Tokyo-based Mt. Gox did little to comfort investors with holdings there. Jonathan Waller, 30, told MarketWatch he had more than 200 bitcoins in Mt. Gox, worth more than $27,000 on a price quoted on Mt. Gox 16 hours ago.
“My feeling is [that] they’re never coming back,” said Waller, who is a games developer based in Tokyo and has been involved in the bitcoin space for about three years.
“I’m over Mt. Gox right now. They can promise unicorns...I’m going to ignore them,” he said.
Bitcoin is open-source software code that has been billed as a virtual currency and payments platform. Unlike the dollar or yen, it isn’t created by a central bank; bitcoins are created through a process called mining that pits computers against each other in a race to solve cryptographic problems. The process also verifies transactions on the bitcoin network. Unlike the banking system, it isn’t overseen by regulators.
It has caught the attention of several big-name investors, including Marc Andreessen, a venture capitalist who has said bitcoin offers a huge opportunity in the industry of global remittances, and Tyler and Cameron Winklevoss, who may be best known for their battle with Mark Zuckerberg over who came up with the idea for what became Facebook. But bitcoin also has caught the attention of law enforcement. Last month, the Justice Department announced the arrest of well-known bitcoin entrepreneur Charlie Shrem on charges that included conspiring to commit money laundering.
The end of bitcoin’s Wild West
Bitcoin prices dropped Tuesday across several exchanges in the wake of the Mt. Gox scandal, underscoring the exchange’s weight even as many bitcoin players have denounced the exchange. The CoinDesk bitcoin price index fell to $515.13 in recent trade from $545.32 on Monday. The last price on Mt. Gox was $135, according to bitcoincharts.com. The CoinDesk bitcoin price index has fallen about 40% this month.
“It’s the end of the Wild West for bitcoin,” said Alex Daley, chief technology investment strategist for Casey Research. “It’s the end of this idea that we’re all going to trade bitcoins, we’re all going to own bitcoins,” he said, adding that “I don’t think bitcoin is going anywhere.” Daley said he had mined bitcoin but stopped when it became really competitive. He still owns a small amount.
Troubles for Mt. Gox kicked up earlier in the month when it suspended bitcoin withdrawals due to an issue in the way its software was written that could allow for duplicate transactions. The issue wasn’t just limited to the Mt. Gox; bitcoin exchanges Bitstamp and BTC-e discovered similar issues when they were hit by hackers . Read more: There’s a major lack of understanding at major exchanges about how bitcoins are sent.
“The moral of the story [is] don’t keep your bitcoins in an exchange,” said Waller.
Monday saw the surprise resignation of Mt. Gox executives from the Bitcoin Foundation, prompting the firm’s bitcoins to trade at a sharp discount to the currency’s rates at other bitcoin dealers.
Media reports also alluded to a document circulating in the bitcoin world that said hackers had stolen 744,000 bitcoins, worth around $350 million at current prices, from Mt. Gox in a theft that allegedly had gone on for years. MarketWatch has not seen the document, nor can it verify its authenticity. But if the reports are accurate, the theft would represent about 6% of the 12.4 million bitcoins in circulation.
The emergence of any recourse for investors so far is an open question at best. Japan’s banking watchdog, the Financial Services Agency, told the Wall Street Journal it did not have authority to oversee bitcoin exchanges.
The drama surrounding Mt. Gox on Tuesday also led some to speculate the company might be up for sale, owing to the appearance of something unusual in its source code.
On Reddit, a social-news website, people claimed to have lost thousands of bitcoins and others reported getting out just in time. (MarketWatch can’t verify the stories or identities of the Reddit users.)
One user, who goes by the mtreme handle, reportedly invested his life savings of $357,000 in bitcoin via Mt. Gox, to build his son’s education fund. Many talked about desperate and futile attempts to get their bitcoins out when they started realizing something might be wrong. These elicited sympathy but also plenty of “what were you thinking,” type comments from the Reddit crowd.
dnmun
1 PW
Feb. 26, 2014, 7:24 a.m. EST
Bitcoin price climbs as Mt. Gox works for ‘a solution’
Regulators look into the sudden closure of the bitcoin exchange
By Michael Kitchen and Barbara Kollmeyer, MarketWatch
MADRID (MarketWatch) — Bitcoin prices rose on Wednesday, recovering sharply from lows hit Tuesday, as authorities in the U.S. and Japan begin looking into the sudden closure of Tokyo-based exchange Mt. Gox.
Meanwhile, Mt. Gox Chief Executive Mark Karpeles said in a brief notice posted on the exchange’s website that he is “working very hard with the support of different parties to find a solution to our recent issues,” but gave no specifics.
After initially remaining silent on Tuesday’s shuttering of Mt. Gox, a move that shocked the virtual-currency market, Japanese officials said they were looking into the matter.
“At this stage the relevant financial authorities — the police, the Finance Ministry and others — are gathering information on the case,” Chief Cabinet Secretary Yoshihide Suga said at a regular news conference Wednesday, according to a Reuters translation of his remarks. Suga declined to comment further.
Late Tuesday, The Wall Street Journal reported that federal prosecutors based in New York had served Mt. Gox with a subpoena earlier this month. The report, citing an unnamed person familiar with the matter, said the subpoena included an order for Mt. Gox to preserve certain documents.
It’s unclear how much money was tied up on Mt. Gox, once the dominant exchange for bitcoin. Its collapse has triggered calls for regulation of the virtual currency and the exchanges tied to it, even as supporters have said bitcoin, which advocates have touted as a long-term alternative to government-issued currencies, remains viable.
The virtual currency has attracted the attention — and cash — of venture capitalists such as Marc Andreessen, who has called it transformational technology, Tyler and Cameron Winklevoss, who may be best known for their against Mark Zuckerberg over the origins of Facebook, and Fred Wilson, whose Union Square Ventures counts Coinbase as a portfolio company.
For its own part, Mt. Gox has offered little explanation for its closure. In a terse statement on its website Tuesday, it cited “recent news reports and the potential repercussions on Mt. Gox’s operations and the market” as the reason for halting transactions “for the time being.”
In the second statemement, posted Wednesday and signed by Karpeles, the exchange addressed speculation about Mt. Gox and its future.
“I would like to use this opportunity to reassure everyone that I am still in Japan, and working very hard with the support of different parties to find a solution to our recent issues,” the statement said. “Furthermore I would like to kindly ask that people refrain from asking questions to our staff: they have been instructed not to give any response or information. Please visit this page for further announcements and updates.”
Tuesday’s complete trading halt on Mt. Gox was the latest in a series of halts and delays that have plagued the exchange in the past year.
Reports about the latest problems have cited market rumors that Mt. Gox suffered a hacking theft of some 750,000 bitcoins, which The Wall Street Journal said would represent about 6% of all bitcoins in existence, a value of roughly $400 million.
Reuters said Wednesday that Karpeles had told the news agency in an email: “We should have an official announcement ready soon-ish. We are currently at a turning point for the business. I can’t tell much more for now as this also involves other parties.”
However, Karpeles didn’t offer further details or disclose his location at the time.
News that Mt. Gox had closed hit bitcoin prices hard on Tuesday, sending the virtual currency to a three-month low of $515.13, down from $545.32 on Monday.
However, the bitcoin price rebounded on Wednesday, rising almost 8% to $575.13, according to CoinDesk. The price represented that of CoinDesk’s own index, and Mt. Gox’s bitcoins have traded at a sharp discount to those at other exchanges for some time ahead of its shutdown.
Bitcoin prices had surged last year about $13 early in the year to over $1,000.
Bitcoin price climbs as Mt. Gox works for ‘a solution’
Regulators look into the sudden closure of the bitcoin exchange
By Michael Kitchen and Barbara Kollmeyer, MarketWatch
MADRID (MarketWatch) — Bitcoin prices rose on Wednesday, recovering sharply from lows hit Tuesday, as authorities in the U.S. and Japan begin looking into the sudden closure of Tokyo-based exchange Mt. Gox.
Meanwhile, Mt. Gox Chief Executive Mark Karpeles said in a brief notice posted on the exchange’s website that he is “working very hard with the support of different parties to find a solution to our recent issues,” but gave no specifics.
After initially remaining silent on Tuesday’s shuttering of Mt. Gox, a move that shocked the virtual-currency market, Japanese officials said they were looking into the matter.
“At this stage the relevant financial authorities — the police, the Finance Ministry and others — are gathering information on the case,” Chief Cabinet Secretary Yoshihide Suga said at a regular news conference Wednesday, according to a Reuters translation of his remarks. Suga declined to comment further.
Late Tuesday, The Wall Street Journal reported that federal prosecutors based in New York had served Mt. Gox with a subpoena earlier this month. The report, citing an unnamed person familiar with the matter, said the subpoena included an order for Mt. Gox to preserve certain documents.
It’s unclear how much money was tied up on Mt. Gox, once the dominant exchange for bitcoin. Its collapse has triggered calls for regulation of the virtual currency and the exchanges tied to it, even as supporters have said bitcoin, which advocates have touted as a long-term alternative to government-issued currencies, remains viable.
The virtual currency has attracted the attention — and cash — of venture capitalists such as Marc Andreessen, who has called it transformational technology, Tyler and Cameron Winklevoss, who may be best known for their against Mark Zuckerberg over the origins of Facebook, and Fred Wilson, whose Union Square Ventures counts Coinbase as a portfolio company.
For its own part, Mt. Gox has offered little explanation for its closure. In a terse statement on its website Tuesday, it cited “recent news reports and the potential repercussions on Mt. Gox’s operations and the market” as the reason for halting transactions “for the time being.”
In the second statemement, posted Wednesday and signed by Karpeles, the exchange addressed speculation about Mt. Gox and its future.
“I would like to use this opportunity to reassure everyone that I am still in Japan, and working very hard with the support of different parties to find a solution to our recent issues,” the statement said. “Furthermore I would like to kindly ask that people refrain from asking questions to our staff: they have been instructed not to give any response or information. Please visit this page for further announcements and updates.”
Tuesday’s complete trading halt on Mt. Gox was the latest in a series of halts and delays that have plagued the exchange in the past year.
Reports about the latest problems have cited market rumors that Mt. Gox suffered a hacking theft of some 750,000 bitcoins, which The Wall Street Journal said would represent about 6% of all bitcoins in existence, a value of roughly $400 million.
Reuters said Wednesday that Karpeles had told the news agency in an email: “We should have an official announcement ready soon-ish. We are currently at a turning point for the business. I can’t tell much more for now as this also involves other parties.”
However, Karpeles didn’t offer further details or disclose his location at the time.
News that Mt. Gox had closed hit bitcoin prices hard on Tuesday, sending the virtual currency to a three-month low of $515.13, down from $545.32 on Monday.
However, the bitcoin price rebounded on Wednesday, rising almost 8% to $575.13, according to CoinDesk. The price represented that of CoinDesk’s own index, and Mt. Gox’s bitcoins have traded at a sharp discount to those at other exchanges for some time ahead of its shutdown.
Bitcoin prices had surged last year about $13 early in the year to over $1,000.
Dauntless
100 TW
Well darn, maybe all these people should go bury their bitcoins in the yard, or stick them in a naughthole in a tree, then decades from now someone can find them and they'd be valuable collectors items.
Oh, wait, there IS no actual coin. Too bad.
http://www.aol.com/article/2014/02/25/california-couple-finds-10-million-in-rare-gold-coins-while-wal/20838130/?icid=maing-grid7%7Cmain5%7Cdl12%7Csec1_lnk3%26pLid%3D447878
Oh, wait, there IS no actual coin. Too bad.
http://www.aol.com/article/2014/02/25/california-couple-finds-10-million-in-rare-gold-coins-while-wal/20838130/?icid=maing-grid7%7Cmain5%7Cdl12%7Csec1_lnk3%26pLid%3D447878
Dauntless
100 TW
http://www.cnn.com/2014/02/26/tech/innovation/dogecoin-cryptocurrency-tech-irpt/index.html?hpt=hp_bn1
dnmun
1 PW
TOKYO — Mt. Gox, the troubled exchange for the virtual currency Bitcoin, filed for bankruptcy protection on Friday and said that it might have lost 750,000 of its customers’ coins, essentially all of them, in a hacking attack.
The Tokyo-based exchange, which warned this month of a software flaw that may have allowed hackers to defraud it of Bitcoins, had halted all trading this week.
Mark Karpeles, the company’s chief executive, wearing a suit instead of his usual T-shirt, bowed in contrition and apologized in Japanese at a press conference in Tokyo.
“There were weaknesses in the system,” he said. “I’m truly sorry to have caused inconvenience.”
He said that the exchange had most likely lost 750,000 of its customers’ Bitcoin holdings and more than 100,000 of its own coins, or more than $450 million worth.
Mt. Gox had said on its website on Wednesday that it was still “working very hard” toward a resolution.
Investors in the exchange had said they did not expect to recover their money stashed on the Mt. Gox platform, which once accounted for four-fifths of the world’s Bitcoin trading.
But Mt. Gox’s bankruptcy, filed with the Tokyo District Court under Japan’s Civil Rehabilitation Law, which is similar to Chapter 11 in the United States, will mean that a bankruptcy supervisor is set to develop a restructuring plan, and will also be responsible for handling any payment of claim distributions to its creditors. That process could take form several months to several years.
The exchange has liabilities of 6.5 billion yen, or $64 million, compared with total assets of 3.84 billion yen, the company said. It has 127,000 creditors.
The demise of Mt. Gox did not come as a surprise for many — and has fanned skepticism in some quarters over the virtual currency’s future in Japan.
“I didn’t think something like this would last for long. I thought it would collapse at some point,” Taro Aso, the Japanese finance minister, told reporters earlier Friday, according to the Nikkei website.
He also suggested that Japan might move to regulate Bitcoin.
“Not everybody accepts it as a legitimate currency. And it’s unclear who should supervise it,” Mr. Aso said. “Japan must do something about it.”
Many Bitcoin advocates, however, have put Mt. Gox’s woes down to managerial and security incompetence and say that the technology underlying Bitcoins remains sound.
“It’s a simple case of gross mismanagement and neglect. But we’re seeing a lot of stronger Bitcoin companies now with better systems and proper staff,” said James MacWhyte, an early Bitcoin adopter and occasional Mt. Gox customer who is working to set up an association of Bitcoin users in Japan.
“Competition is great. Mt. Gox had no competition for a long time, and that’s how it got to where it got,” he said this week. “Now it’s time to raise the standard.”
The Tokyo-based exchange, which warned this month of a software flaw that may have allowed hackers to defraud it of Bitcoins, had halted all trading this week.
Mark Karpeles, the company’s chief executive, wearing a suit instead of his usual T-shirt, bowed in contrition and apologized in Japanese at a press conference in Tokyo.
“There were weaknesses in the system,” he said. “I’m truly sorry to have caused inconvenience.”
He said that the exchange had most likely lost 750,000 of its customers’ Bitcoin holdings and more than 100,000 of its own coins, or more than $450 million worth.
Mt. Gox had said on its website on Wednesday that it was still “working very hard” toward a resolution.
Investors in the exchange had said they did not expect to recover their money stashed on the Mt. Gox platform, which once accounted for four-fifths of the world’s Bitcoin trading.
But Mt. Gox’s bankruptcy, filed with the Tokyo District Court under Japan’s Civil Rehabilitation Law, which is similar to Chapter 11 in the United States, will mean that a bankruptcy supervisor is set to develop a restructuring plan, and will also be responsible for handling any payment of claim distributions to its creditors. That process could take form several months to several years.
The exchange has liabilities of 6.5 billion yen, or $64 million, compared with total assets of 3.84 billion yen, the company said. It has 127,000 creditors.
The demise of Mt. Gox did not come as a surprise for many — and has fanned skepticism in some quarters over the virtual currency’s future in Japan.
“I didn’t think something like this would last for long. I thought it would collapse at some point,” Taro Aso, the Japanese finance minister, told reporters earlier Friday, according to the Nikkei website.
He also suggested that Japan might move to regulate Bitcoin.
“Not everybody accepts it as a legitimate currency. And it’s unclear who should supervise it,” Mr. Aso said. “Japan must do something about it.”
Many Bitcoin advocates, however, have put Mt. Gox’s woes down to managerial and security incompetence and say that the technology underlying Bitcoins remains sound.
“It’s a simple case of gross mismanagement and neglect. But we’re seeing a lot of stronger Bitcoin companies now with better systems and proper staff,” said James MacWhyte, an early Bitcoin adopter and occasional Mt. Gox customer who is working to set up an association of Bitcoin users in Japan.
“Competition is great. Mt. Gox had no competition for a long time, and that’s how it got to where it got,” he said this week. “Now it’s time to raise the standard.”
TylerDurden
100 GW
The Inside Story of Mt. Gox, Bitcoin’s $460 Million Disaster
BY ROBERT MCMILLAN
03.03.146:30 AM
"Its collapse into bankruptcy last week — and the disappearance of $460 million, apparently stolen by hackers, and another $27.4 million missing from its bank accounts — came as little surprise to people who had knowledge of the Tokyo-based company’s inner workings. The company, these insiders say, was largely a reflection of its CEO and majority stake holder, Mark Karpeles, a man who was more of a computer coder than a chief executive and yet was sometimes distracted even from his technical duties when they were most needed. “Mark liked the idea of being CEO, but the day-to-day reality bored him,” says one Mt. Gox insider, who spoke on condition of anonymity."
http://www.wired.com/wiredenterprise/2014/03/bitcoin-exchange/
BY ROBERT MCMILLAN
03.03.146:30 AM
"Its collapse into bankruptcy last week — and the disappearance of $460 million, apparently stolen by hackers, and another $27.4 million missing from its bank accounts — came as little surprise to people who had knowledge of the Tokyo-based company’s inner workings. The company, these insiders say, was largely a reflection of its CEO and majority stake holder, Mark Karpeles, a man who was more of a computer coder than a chief executive and yet was sometimes distracted even from his technical duties when they were most needed. “Mark liked the idea of being CEO, but the day-to-day reality bored him,” says one Mt. Gox insider, who spoke on condition of anonymity."
http://www.wired.com/wiredenterprise/2014/03/bitcoin-exchange/
dnmun
1 PW
By MATTHEW GOLDSTEIN
A staff member in the electrical engineering department of a liberal arts college in eastern Pennsylvania played a small role in the investigation that resulted in the shutdown last fall of Silk Road, the online marketplace where drugs and weapons could be bought with Bitcoin.
The employee, Christopher Nadovich, director of laboratories in at the electrical and computer engineering department at Lafayette College, owned a company that provided Silk Road with a backup server for its website, according to a previously undisclosed court filing in the two-year investigation.
On Sept. 9, three weeks before the United States authorities shut down Silk Road and arrested Ross William Ulbricht, the man they say founded the site, an F.B.I. agent served a search warrant on Mr. Nadovich’s company, JTAN.com. The warrant sought to preserve records of any transactions involving Silk Road’s customers and any private communications between sellers and buyers of drugs on the website.
Search warrant application and affidavit
The search warrant on JTAN and the company’s involvement in the Silk Road case had remained a secret until a few weeks ago. On Feb. 18, federal prosecutors asked a United States magistrate in federal court in Philadelphia to unseal the matter so authorities could begin providing Mr. Ulbricht’s lawyer with information to begin planning a legal defense.
Silk Road’s website ran on an encrypted Internet network called Tor, which allowed it to remain hidden from general viewing. The website, which authorities have called an eBay for illegal drugs, ran off a server in a foreign country and a backup server provided by JTAN.
The search warrant illustrates the appeal a company like JTAN has for any online business that desires anonymity and uses a digital currency like Bitcoin to preserve the privacy of its customers’ activities. In the search warrant, the federal authorities said that JTAN specialized in allowing “customers to lease servers through its service with complete anonymity.” The filing also said that JTAN never asked customers to verify their identities and permitted them “to pay anonymously through the use of Bitcoins.”
Mr. Nadovich is not named in the warrant, but other public records identify him as the owner of JTAN, which lists an address in Easton, Pa., where Lafayette College is based. In the warrant, the company is listed as having an address in Sellersville, Pa., about 33 miles from Easton.
Mr. Nadovich has not been charged with any wrongdoing. In an emailed response, he said, “I’m afraid that I don’t feel inclined to comment about Silk Road or any business decisions made by JTAN.”
Just days after the F.B.I. served the search warrant on JTAN, Mr. Nadovich began taking steps to close parts of his business. In a Sept. 14 online notice to JTAN customers that still appears on the company’s website, Mr. Nadovich said he was terminating the firm’s “dedicated server” business. Mr. Nadovich gave no explanation but said “the business situation we find ourselves in does not allow continuing this service.” On Oct. 30, he posted another notice, telling JTAN customers the company was struggling financially and could file for bankruptcy protection in 2014.
Mr. Nadovich said on Tuesday that JTAN was still in business.
James Margolin, a spokesman for Preet Bharara, the United States attorney in Manhattan, whose office is prosecuting Mr. Ulbricht, declined to comment. The name of the F.B.I. agent who signed the search warrant application was redacted by authorities to protect his identity.
The search warrant reveals that JTAN potentially provided the authorities with a wealth of information about Silk Road and Mr. Ulbricht. The authorities said that Silk Road’s primary server would purge information every 60 days or so, but data on the backup server at JTAN was not regularly deleted or destroyed.
“I believe that this backup data will reflect the details of numerous narcotics transactions conducted through the Silk Road website and the use of Bitcoins to launder the proceeds from these transactions,” the unidentified F.B.I. agent said in the search warrant application.
Federal prosecutors contend that in a little more than two years, Mr. Ulbricht, who is 29, built Silk Road into the go-to place in the dark corners of the Internet for buying drugs like cocaine, ecstasy and heroin and stolen credit card numbers. Authorities contend the website handled $1.2 billion in transactions, all in Bitcoin.
Mr. Ulbricht pleaded not guilty on Feb. 7 to money-laundering and drug-trafficking charges in Federal District Court in Manhattan. Federal prosecutors said they obtained roughly 10 terabytes of data from the servers they seized in addition to the laptop Mr. Ulbricht had with him when he was arrested by authorities on Oct. 1 at a public library in San Francisco.
The government’s crackdown on Silk Road and the arrest of Mr. Ulbricht began a series of embarrassing episodes for Bitcoin and digital currency enthusiasts, who see it as an alternative to traditional currencies because it is not backed by any government and not subject to political control.
Bitcoin proponents suffered another black eye last week when Mt. Gox, once the biggest exchange for converting dollars and other currencies into Bitcoin, filed for bankruptcy in Japan. The company collapsed after its owner, Mark Karpeles, said it had lost more than $450 million worth of Bitcoins, possibly as the result of an attack by computer hackers. But days later, it’s still not clear what happened to the roughly 750,000 of its customers’ Bitcoins.
In late January, another Bitcoin proponent, Charlie Shrem, was arrested by federal authorities and charged with helping a Florida man sell Bitcoin to people looking to buy drugs on Silk Road.
A staff member in the electrical engineering department of a liberal arts college in eastern Pennsylvania played a small role in the investigation that resulted in the shutdown last fall of Silk Road, the online marketplace where drugs and weapons could be bought with Bitcoin.
The employee, Christopher Nadovich, director of laboratories in at the electrical and computer engineering department at Lafayette College, owned a company that provided Silk Road with a backup server for its website, according to a previously undisclosed court filing in the two-year investigation.
On Sept. 9, three weeks before the United States authorities shut down Silk Road and arrested Ross William Ulbricht, the man they say founded the site, an F.B.I. agent served a search warrant on Mr. Nadovich’s company, JTAN.com. The warrant sought to preserve records of any transactions involving Silk Road’s customers and any private communications between sellers and buyers of drugs on the website.
Search warrant application and affidavit
The search warrant on JTAN and the company’s involvement in the Silk Road case had remained a secret until a few weeks ago. On Feb. 18, federal prosecutors asked a United States magistrate in federal court in Philadelphia to unseal the matter so authorities could begin providing Mr. Ulbricht’s lawyer with information to begin planning a legal defense.
Silk Road’s website ran on an encrypted Internet network called Tor, which allowed it to remain hidden from general viewing. The website, which authorities have called an eBay for illegal drugs, ran off a server in a foreign country and a backup server provided by JTAN.
The search warrant illustrates the appeal a company like JTAN has for any online business that desires anonymity and uses a digital currency like Bitcoin to preserve the privacy of its customers’ activities. In the search warrant, the federal authorities said that JTAN specialized in allowing “customers to lease servers through its service with complete anonymity.” The filing also said that JTAN never asked customers to verify their identities and permitted them “to pay anonymously through the use of Bitcoins.”
Mr. Nadovich is not named in the warrant, but other public records identify him as the owner of JTAN, which lists an address in Easton, Pa., where Lafayette College is based. In the warrant, the company is listed as having an address in Sellersville, Pa., about 33 miles from Easton.
Mr. Nadovich has not been charged with any wrongdoing. In an emailed response, he said, “I’m afraid that I don’t feel inclined to comment about Silk Road or any business decisions made by JTAN.”
Just days after the F.B.I. served the search warrant on JTAN, Mr. Nadovich began taking steps to close parts of his business. In a Sept. 14 online notice to JTAN customers that still appears on the company’s website, Mr. Nadovich said he was terminating the firm’s “dedicated server” business. Mr. Nadovich gave no explanation but said “the business situation we find ourselves in does not allow continuing this service.” On Oct. 30, he posted another notice, telling JTAN customers the company was struggling financially and could file for bankruptcy protection in 2014.
Mr. Nadovich said on Tuesday that JTAN was still in business.
James Margolin, a spokesman for Preet Bharara, the United States attorney in Manhattan, whose office is prosecuting Mr. Ulbricht, declined to comment. The name of the F.B.I. agent who signed the search warrant application was redacted by authorities to protect his identity.
The search warrant reveals that JTAN potentially provided the authorities with a wealth of information about Silk Road and Mr. Ulbricht. The authorities said that Silk Road’s primary server would purge information every 60 days or so, but data on the backup server at JTAN was not regularly deleted or destroyed.
“I believe that this backup data will reflect the details of numerous narcotics transactions conducted through the Silk Road website and the use of Bitcoins to launder the proceeds from these transactions,” the unidentified F.B.I. agent said in the search warrant application.
Federal prosecutors contend that in a little more than two years, Mr. Ulbricht, who is 29, built Silk Road into the go-to place in the dark corners of the Internet for buying drugs like cocaine, ecstasy and heroin and stolen credit card numbers. Authorities contend the website handled $1.2 billion in transactions, all in Bitcoin.
Mr. Ulbricht pleaded not guilty on Feb. 7 to money-laundering and drug-trafficking charges in Federal District Court in Manhattan. Federal prosecutors said they obtained roughly 10 terabytes of data from the servers they seized in addition to the laptop Mr. Ulbricht had with him when he was arrested by authorities on Oct. 1 at a public library in San Francisco.
The government’s crackdown on Silk Road and the arrest of Mr. Ulbricht began a series of embarrassing episodes for Bitcoin and digital currency enthusiasts, who see it as an alternative to traditional currencies because it is not backed by any government and not subject to political control.
Bitcoin proponents suffered another black eye last week when Mt. Gox, once the biggest exchange for converting dollars and other currencies into Bitcoin, filed for bankruptcy in Japan. The company collapsed after its owner, Mark Karpeles, said it had lost more than $450 million worth of Bitcoins, possibly as the result of an attack by computer hackers. But days later, it’s still not clear what happened to the roughly 750,000 of its customers’ Bitcoins.
In late January, another Bitcoin proponent, Charlie Shrem, was arrested by federal authorities and charged with helping a Florida man sell Bitcoin to people looking to buy drugs on Silk Road.
dnmun
1 PW
In the wake of Mt. Gox, a six-figure bitcoin heist has resulted in another shuttered service. This time, the service is Flexcoin, a wallet and banking service that lost 896 bitcoins to attackers, and has announced it will be unable to continue functioning after the loss. The attack emptied the service's hot wallet, where funds were kept for easy access, but the attack did not reach into the offline storage, and Flexcoin has promised to return those funds to customers as soon as possible.
While not as central to the Bitcoin economy as Mt. Gox, the Flexcoin shutdown is another blow to an ecosystem that's facing growing doubts from would-be regulators in government. According to a Flexcoin statement, the company "will attempt to work with law enforcement to trace the source of the hack," but judging by the preemptive shutdown, they do not seem optimistic about recovering the funds. Already, the news has attracted Bitcoin skeptics; as one security researcher put it, "BTC is just too easy to steal to be usable."
While not as central to the Bitcoin economy as Mt. Gox, the Flexcoin shutdown is another blow to an ecosystem that's facing growing doubts from would-be regulators in government. According to a Flexcoin statement, the company "will attempt to work with law enforcement to trace the source of the hack," but judging by the preemptive shutdown, they do not seem optimistic about recovering the funds. Already, the news has attracted Bitcoin skeptics; as one security researcher put it, "BTC is just too easy to steal to be usable."
dnmun
1 PW
Plaintiffs in Suit Seek to Freeze Mt. Gox’s U.S. Assets
By RACHEL ABRAMS
Customers of Mt. Gox are trying to freeze assets in the United States of the bankrupt Bitcoin exchange and its chief executive, Mark Karpeles.
There’s just one problem: They don’t know where those assets are.
Plaintiffs in a class-action lawsuit filed a motion on Tuesday seeking a temporary injunction to keep Mr. Karpeles or his company from moving any money outside of the United States. They also want a full accounting of any assets Mt. Gox has left.
Mr. Gox, a Japan-based virtual currency marketplace, filed for bankruptcy on Friday, and Mr. Karpeles said it had lost all 750,000 customer Bitcoins, as well as 100,000 of its own — or more than $450 million worth. Although the company has a subsidiary incorporated in Delaware, it’s unclear what accounts, if any, the company held in the United States.
“There were weaknesses in the system,” Mr. Karpeles said during a news conference in Tokyo on Friday to discuss the bankruptcy. “I’m truly sorry to have caused inconvenience.”
Mr. Karpeles has blamed the loss on hackers, but it’s not yet clear what happened to the money.
Gregory Greene, an Illinois man who claims to have eventually acquired more than $25,000 worth of Bitcoins on Mt. Gox, filed his class-action lawsuit on Thursday, three days after the company’s website went offline, charging “systematic misuse and misappropriation of its users’ property.”
Mt. Gox halted all customer withdrawals in early February after months of technical glitches. Users had long complained that they could deposit money into their accounts, but often had trouble taking money out.
In a company crisis strategy document that leaked online last week, Mt. Gox said that its customer deposits had been stolen over years and “went unnoticed.”
But lawyers for Mr. Greene say that Mt. Gox knew it was in trouble long before it went offline, and deliberately misled customers about what it was doing to fix its problems.
A representative for Mt. Gox could not be reached for comment.
In court documents, lawyers for the plaintiffs argue that Mt. Gox misled customers by promising quick and secure trading, and for giving the impression that it was busy trying to solve any glitches in the system.
“Defendants in this case have engaged in a series of deceptive and unfair practices designed to lull consumers into depositing and keeping their money on the exchange while Mt. Gox KK readied itself for bankruptcy,” the suit claims, referring to the Japanese entity.
Bitcoin, a virtual currency that isn’t backed by any central bank, first appeared in 2009. It appealed to technology buffs and anti-establishment libertarians, many of whom had grown frustrated with a global banking system that had crippled many of the world’s biggest economies.
Users can buy or “unlock” Bitcoins by solving mathematical riddles. But Bitcoin is not regulated, leaving users few options when things go sour.
Mt. Gox was at one point the dominant online marketplace for buying, selling and storing Bitcoins, and its shuttering last week sent many users scrambling to figure out what could be done to recover their money.
“The idea that they have no money is not credible,” said Jay Edelson, a lawyer for the plaintiffs. “They were taking deposits up until the day before they shut down.”
By RACHEL ABRAMS
Customers of Mt. Gox are trying to freeze assets in the United States of the bankrupt Bitcoin exchange and its chief executive, Mark Karpeles.
There’s just one problem: They don’t know where those assets are.
Plaintiffs in a class-action lawsuit filed a motion on Tuesday seeking a temporary injunction to keep Mr. Karpeles or his company from moving any money outside of the United States. They also want a full accounting of any assets Mt. Gox has left.
Mr. Gox, a Japan-based virtual currency marketplace, filed for bankruptcy on Friday, and Mr. Karpeles said it had lost all 750,000 customer Bitcoins, as well as 100,000 of its own — or more than $450 million worth. Although the company has a subsidiary incorporated in Delaware, it’s unclear what accounts, if any, the company held in the United States.
“There were weaknesses in the system,” Mr. Karpeles said during a news conference in Tokyo on Friday to discuss the bankruptcy. “I’m truly sorry to have caused inconvenience.”
Mr. Karpeles has blamed the loss on hackers, but it’s not yet clear what happened to the money.
Gregory Greene, an Illinois man who claims to have eventually acquired more than $25,000 worth of Bitcoins on Mt. Gox, filed his class-action lawsuit on Thursday, three days after the company’s website went offline, charging “systematic misuse and misappropriation of its users’ property.”
Mt. Gox halted all customer withdrawals in early February after months of technical glitches. Users had long complained that they could deposit money into their accounts, but often had trouble taking money out.
In a company crisis strategy document that leaked online last week, Mt. Gox said that its customer deposits had been stolen over years and “went unnoticed.”
But lawyers for Mr. Greene say that Mt. Gox knew it was in trouble long before it went offline, and deliberately misled customers about what it was doing to fix its problems.
A representative for Mt. Gox could not be reached for comment.
In court documents, lawyers for the plaintiffs argue that Mt. Gox misled customers by promising quick and secure trading, and for giving the impression that it was busy trying to solve any glitches in the system.
“Defendants in this case have engaged in a series of deceptive and unfair practices designed to lull consumers into depositing and keeping their money on the exchange while Mt. Gox KK readied itself for bankruptcy,” the suit claims, referring to the Japanese entity.
Bitcoin, a virtual currency that isn’t backed by any central bank, first appeared in 2009. It appealed to technology buffs and anti-establishment libertarians, many of whom had grown frustrated with a global banking system that had crippled many of the world’s biggest economies.
Users can buy or “unlock” Bitcoins by solving mathematical riddles. But Bitcoin is not regulated, leaving users few options when things go sour.
Mt. Gox was at one point the dominant online marketplace for buying, selling and storing Bitcoins, and its shuttering last week sent many users scrambling to figure out what could be done to recover their money.
“The idea that they have no money is not credible,” said Jay Edelson, a lawyer for the plaintiffs. “They were taking deposits up until the day before they shut down.”
TylerDurden
100 GW
Bitcoin trader found dead:
http://news.cnet.com/8301-1023_3-57619978-93/police-probe-death-of-bitcoin-exchanges-young-ceo/
Bitcoin creator found alive:
http://mag.newsweek.com/2014/03/14/bitcoin-satoshi-nakamoto.html
http://news.cnet.com/8301-1023_3-57619978-93/police-probe-death-of-bitcoin-exchanges-young-ceo/
Bitcoin creator found alive:
http://mag.newsweek.com/2014/03/14/bitcoin-satoshi-nakamoto.html
dnmun
1 PW
March 20, 2014, 9:41 p.m. EDT
Mt. Gox finds 200,000 lost bitcoins: WSJ
LOS ANGELES (MarketWatch) -- Shuttered bitcoin exchange Mt. Gox said it has found 200,000 of its missing 850,000 bitcoins, The Wall Street Journal reported, citing a document from the Tokyo-based company. The funds were discovered March 7 in a virtual "wallet" that Mt. Gox had stopped using, the report quoted Mt. Gox Chief Executive Mark Karpelès as saying. Mt. Gox filed for bankruptcy protection at the end of last month, with reports saying the exchange may have fallen victim to hacking in its loss of the bitcoins.
Mt. Gox finds 200,000 lost bitcoins: WSJ
LOS ANGELES (MarketWatch) -- Shuttered bitcoin exchange Mt. Gox said it has found 200,000 of its missing 850,000 bitcoins, The Wall Street Journal reported, citing a document from the Tokyo-based company. The funds were discovered March 7 in a virtual "wallet" that Mt. Gox had stopped using, the report quoted Mt. Gox Chief Executive Mark Karpelès as saying. Mt. Gox filed for bankruptcy protection at the end of last month, with reports saying the exchange may have fallen victim to hacking in its loss of the bitcoins.
dnmun
1 PW
March 28, 2014, 7:52 a.m. EDT
Bitcoin at $500 in wake of reported Chinese ban
NEW YORK (MarketWatch) -- Bitcoin rose above $500 on the CoinDesk bitcoin price index Friday, after plunging more than 17% Thursday to $478.16. In recent trade, bitcoin exchanged hands at $503.01 on the index, which tracks prices on three exchanges. Thursday's drop came after the Chinese media reported that the People's Bank of China had ordered banks to close accounts of several virtual-currency exchanges, effective April 15.
Bitcoin at $500 in wake of reported Chinese ban
NEW YORK (MarketWatch) -- Bitcoin rose above $500 on the CoinDesk bitcoin price index Friday, after plunging more than 17% Thursday to $478.16. In recent trade, bitcoin exchanged hands at $503.01 on the index, which tracks prices on three exchanges. Thursday's drop came after the Chinese media reported that the People's Bank of China had ordered banks to close accounts of several virtual-currency exchanges, effective April 15.
The name "endless-sphere" was a computer services company. The owner was a guy who happened to get an electric bike, so he started a forum for electric bike discussion. Soon after that, a popular E-vehicle forum called V is for Voltage experienced a comprehensive failure, and the main members migrated to the endless-sphere forum.
For a variety of reasons, ES took off rapidly after that point and grew exponentially. V is for Voltage is back on its feet, but it is mainly a green energy and E-scooter forum with an emphasis on the San Francisco bay area. The man who started it all posted on the ES forum as "KnightMB" because his featured E-bike was a Knight branded mountain bike. He decided to sell the control of the ES forum to the highest bidder.
When news of this became known, the majority of ES members feared that who-ever bought it would cover half the visible screen with advertisements to make a profit. (for an example, go to any discussion thread on the French electric bike forum http://cyclurba.fr/forum/161407/bafang-500w-bmsbattery.html?from=11&discussionID=8775&messageID=295816&rubriqueID=102&pageprec=) a banner ad acrodss the top, a column ad down the left side, and every seventh post is an ad.
Justin from ebikes.ca purchased control of the ES forum, and has allowed it to roam free.
Later, KnightMB's identity was uncovered, and it was later found out that he was under investigation for large and suspicious bitcoin transactions.
For a variety of reasons, ES took off rapidly after that point and grew exponentially. V is for Voltage is back on its feet, but it is mainly a green energy and E-scooter forum with an emphasis on the San Francisco bay area. The man who started it all posted on the ES forum as "KnightMB" because his featured E-bike was a Knight branded mountain bike. He decided to sell the control of the ES forum to the highest bidder.
When news of this became known, the majority of ES members feared that who-ever bought it would cover half the visible screen with advertisements to make a profit. (for an example, go to any discussion thread on the French electric bike forum http://cyclurba.fr/forum/161407/bafang-500w-bmsbattery.html?from=11&discussionID=8775&messageID=295816&rubriqueID=102&pageprec=) a banner ad acrodss the top, a column ad down the left side, and every seventh post is an ad.
Justin from ebikes.ca purchased control of the ES forum, and has allowed it to roam free.
Later, KnightMB's identity was uncovered, and it was later found out that he was under investigation for large and suspicious bitcoin transactions.
dnmun
1 PW
not to mention an attempt to extort a large amount of money in bitcoins from Mitt Romney to prevent his tax returns from being publicly posted. of course he had nothing to do with it, and he never really had all those bitcoins either that he created by using his employers' computers to mine them.
oatnet
1 MW
spinningmagnets said:
Was KnightMB the owner or an employee? I seem to remember reading that E:S was originally hosted on his employers infrastructure, and that he had also used his employer's infrastructure to mine bitcoins, and when he left he convinced them to give him the "virtually worthless" bitcoins as part of his severance. I'm quoting from spotty memory not experience, so I could be off base.
dnmun
1 PW
i doubt if they ever knew he had mined the bitcoins on their servers. that is why these kinda people like the bitcoins since you can put them into your 'wallet' and move them anywhere and nobody has a clue.
so nobody knew all those bitcoins were gone from mt gox until long after, or maybe they are still there hidden in another secret digital wallet. i loved how he just accidentally discovered 200,000 bitcoins in an 'old wallet'. one he never used anymore so he never thought to look for them there. i gotta bridge for sale. cheap.
so nobody knew all those bitcoins were gone from mt gox until long after, or maybe they are still there hidden in another secret digital wallet. i loved how he just accidentally discovered 200,000 bitcoins in an 'old wallet'. one he never used anymore so he never thought to look for them there. i gotta bridge for sale. cheap.
