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First Ever Bitcoin Exchange Mt. Gox May be on its Death Bed

Tuesday, February 11, 2014 22:30

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(Before It's News)

TND Guest Contributor: Nathan McDonald | Sprott Money Blog |

The world’s first and once largest bitcoin exchange, Mt. Gox, is in trouble. The troubles have been building behind the scenes for months, but truly surfaced last week.

Users of the exchange have been reporting an inability to withdraw their funds, citing waits of up to three months! Data published by The Gox Report indicated that the backlog has risen significantly and is now estimated to be 40,000 BTC or $34 million USD. This estimation was refuted by Mt. Gox and data to The Gox Report has now been terminated (nothing fishy about that!).

Troubles only intensified when on Friday the exchange halted all withdrawals citing “technical difficulty“. An update is promised on Feb. 10th, but this does not mean that services will be resumed at that time.

Below is the official statement from Mt. Gox:

Dear MtGox Customers,

In our efforts to resolve the issue being encountered by various bitcoin withdrawals, it was determined that the increase in the flow of withdrawal requests has hindered our efforts on a technical level. To understand the issue thoroughly, the system needs to be in a static state.

In order for our team to resolve the withdrawal issue, it is necessary for a temporary pause on all withdrawal requests to obtain a clear technical view of the current processes.

We apologize for the sudden short notice. All bitcoin withdrawal requests will be on pause, and the withdrawals in the system will be returned to your MtGox wallet and can be reinitiated once the issue is resolved. The trading platform will perform as usual for the needs of our customers.   

Our team will resolve this problem as soon as possible and will provide an update on Monday, February 10, 2014 (JST).  

We deeply apologize for the inconvenience caused, and thank you for your kind support and considerations.

Luckily for those invested in bitcoin, Mt. Gox does not have the iron grip that it once had. Last April Mt. Gox commanded a 80% share of all bitcoin to USD conversions, this has since fallen to 25%. Regardless, the turmoil being experienced on the exchange is affecting the price of bitcoins in a serious way, causing a plunge from $850 to $651 in a one week span. This sort of volatility makes even silver look calm.

Those invested in bitcoin know that with any new innovation there will be highs and lows. If Mt. Gox doesn’t quickly sort out their problems, they could potentially be facing shutters. An event that will have massive ramifications for the price of bitcoin.

I am a personal supporter of cryptocurrencies and free market currencies. I believe they have their place in the world, but in times like these I am reminded why the allure of physical gold and silver that you can hold in your hands shines so bright.

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Nathan McDonald writes for Sprott Money Blog, part of Sprott Money Ltd., a leading precious metals dealer selling gold coins, silver coins and bullion bars online and over the phone. As one of Canada’s largest owners of gold and silver bullion, the company’s goal is to facilitate ownership of precious metals no matter how big or small the portfolio.