Bitcoin exchange site dissapears after theft

2014-02-25 15:48
(Shutterstock)

(Shutterstock)

Multimedia   ·   User Galleries   ·   News in Pictures Send us your pictures  ·  Send us your stories

Tokyo - The website of Tokyo-based bitcoin exchange MtGox went down on Tuesday amid reports of a theft of the virtual currency worth hundreds of millions of dollars, dealing a blow to its credibility.

The bitcoin community rallied round to defend the unit, with chief executives of several major operators pledging to work together to shore up public faith in the project.

Visitors to the www.mtgox.com domain on Tuesday got a blank page, consistent with contents having been removed when they tried to log on, more than two weeks after the firm suspended cash withdrawals and claimed there was a bug in the software underpinning the crypto-currency.

A widely-shared document purporting to be a MtGox "crisis strategy" said the firm might have lost more than 744 400 bitcoins in a theft that had gone unnoticed for years.

That number of bitcoins would be worth more than $300m, using rates at functioning exchanges on Tuesday afternoon.

Wild volatility

It was not immediately possible to verify the document, which was posted on a blog written by someone who describes himself as "an entrepreneur and former VC who makes the business case for #Bitcoin".

Consternation has grown since MtGox stopped processing external transactions on 7 February, claiming there was a problem with the programme that powers the currency and allows it to be transferred between users or swapped for goods and services.

The value of the unit on MtGox had gone into freefall since then. Around midday on Tuesday, shortly before the shutdown, a bitcoin was worth $135, compared with the $430 quoted by the CoinDesk bitcoin price index, which tracks the price of the currency on major exchanges.

Prices among exchanges are not always the same.

In January a bitcoin was worth more than $900 at MtGox, one of the world's first exchanges for the unit.

A joint statement issued by CEOs of major platforms said the currency was sound and blamed MtGox for the fiasco.

"As with any new industry, there are certain bad actors that need to be weeded out, and that is what we are seeing today. MtGox has confirmed its issues in private discussions with other members of the bitcoin community", it said.

Wild volatility has long been a part of the experimental digital currency, which does not have backing of a central bank or government and falls outside of traditional financial regulatory frameworks.

Units are generated by a complex computer algorithm designed by one or more anonymous people in 2009, with a global cap on the eventual number of bitcoins set at 21 million units.

Proponents say the currency is an efficient and anonymous way to store and transfer monetary value, and to avoid the risks inherent in any currency dependent on the viability of a government for its value.

But some economists say the project is mired in difficulties, including large fluctuations in value caused by speculators and a supposed vulnerability to online thieves.

Others note that the anonymity it offers is attractive to underworld figures and cite its use to buy drugs and guns on the underground Silk Road website.

MtGox has not responded to repeated requests from AFP for comment, but in a statement last week said it was still working on "re-initiating bitcoin withdrawals".

On the eve of service shutdown, MtGox CEO Mark Karpeles resigned from the board of the Bitcoin Foundation, which is an advocate for the virtual currency.

A handful of MtGox clients have staged small protests outside the firm's headquarters, but say they have not received any reassurances over whether or not their money is safe.

Read more on:    bitcoin  |  japan  |  internet
NEXT ON NEWS24X
SHARE:

Read News24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
20 comments
Add your comment
Comment 0 characters remaining
 

Inside News24

 
SPONSORED CONTENT
5 crucial questions to ask before you take that job 2014-10-30 08:00

You choose your employer just as much as they choose you. Here are 5 of the most important things you should find out about a company before you sign up.

/News
 

10 facts about swimming you didn't know

This will make you want to jump right into the pool.

 
 

Where were you when you last felt alive?

Snors with a cause - creating awareness of male health
Inspiring: Rock climbing with just one leg
Watch! Skateboarders racing cyclists
Exciting new zipline for Cape Town!

Jobs in Cape Town [change area]

Property [change area]

Travel - Look, Book, Go!

Magical Massinga

Spend 5 nights at the gorgeous Massinga Beach Lodge in Mozambique and only pay for 4 from R13 220 per person sharing. Includes return flights, accommodation, transfers and romantic turndown. Book now!

Kalahari.com - shop online today

Save up to R2100 on electronics! – As seen in the catalogue

Wishing for tech gadgets this festive? Save up to R2100 on hot tech products at kalahari.com. While stocks last. Shop now!

TV Series – 2 for R299

Loads of hot titles to choose from. Shop now!

Hot offer: Up to 50% off irons

Save up to 50% on all Philips irons. While stocks last. Shop now!

Seen something you like in our catalogue?

Find the perfect gift and save up to R5000 – As seen on the catalogue. Hurry and shop now!

Toys 4 for the price of 3

Buy 4 toys and get the cheapest FREE! Offer valid while stocks last. Shop now!

OLX Free Classifieds [change area]

Samsung Galaxy s4

Mobile, Cell Phones in South Africa, Western Cape, Cape Town. Date October 24

Best bargain in big bay

Real Estate, Houses - Apartments for Sale in South Africa, Western Cape, Cape Town. Date October 25

VW Golf 6, 1.6 Trendline (Excellent condition)

Vehicles, Cars in South Africa, Western Cape, Cape Town. Date October 25

Horoscopes
Aquarius
Aquarius

You may be doing the work and playing the game, but your innovative mind is on a far away planet planning the next big thing....read more

There are new stories on the homepage. Click here to see them.
 
English
Afrikaans
isiZulu

Hello 

Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.


Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Settings

Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.








Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.