Sat, Feb 22, 2014 - Page 15 News List

Bitcoin price falls after site Mt.Gox halts withdrawals

Bloomberg

Bitcoin holders are offering the virtual money for US$110 on the online exchange Mt.Gox, down from US$829 two weeks ago, following its decision to halt withdrawals earlier this month.

While bitcoin trades are resuming on other Web sites, Tokyo-based Mt.Gox said in a statement yesterday that it is still working to resume bitcoin withdrawals for clients.

The digital money traded yesterday for US$566 on Bitstamp and for US$545 on BTC-e, which are rival exchanges that were crippled by a Internet-wide hacking attack that shut down marketplaces across the Web this month. Some have since resumed operations.

The interruptions are the latest setback for bitcoins, which have also come under scrutiny by India, China and Russia. Those governments have sought to ban or limit the use of the virtual currency, which exists as software and is not controlled by any authority.

The inability to remove funds from Mt.Gox is raising concerns that hackers might have gained access to deposits, said Gil Luria, an analyst at Wedbush Securities Inc.

“Since traders can’t get their bitcoin out of Mt.Gox right now, the price is discounting a probability that they will never be able to get their bitcoin out,” Luria wrote in an e-mail.

Mt.Gox did not return repeated requests by e-mail and telephone for comment.

The company said in the statement that it had relocated its office due to security concerns.

“The move, combined with some other security and technical challenges, pushed back our progress,” Mt.Gox said in the statement.

A video posted on the blog CoinDesk shows Kolin Burges, a Londoner who flew to Japan, standing in front of Mt.Gox’s office with a sign that says “Mt.Gox, where’s our money.”

He confronts Mt.Gox chief executive Mark Karpeles and asks him if the site still has everyone’s bitcoins. Karpeles does not reply in the video.

Mt.Gox, one of the largest online exchanges where bitcoins are traded for US dollars, euros and other currencies, has had other stumbles. Mt.Gox temporarily halted or delayed withdrawals several times last year.

While bitcoins can be used to buy everything from Tesla Motors Inc cars to Gummi bears, they have also become a speculative investment, with the price soaring to more than US$1,200 last year from US$12 at the beginning of last year as it gained mainstream attention.

Mt.Gox clients will probably move their funds to rival exchanges once they are able to access their bitcoins, said Jered Kenna, a bitcoin investor.

“The times when Mt.Gox came back, there weren’t a lot of good options,” Kenna said in an interview. “With Bitstamp and CoinBase, their chances of a comeback are much lower.”

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