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== February 2014 shutdown and bankruptcy == |
== February 2014 shutdown and bankruptcy == |
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⚫ | On 7 February 2014, all Bitcoin withdrawals were halted by Mt. Gox.<ref name=doughterty2014>{{cite news | work=Bloomberg | date=7 February 2014 | url=http://www.bloomberg.com/news/2014-02-07/bitcoin-price-falls-as-mt-gox-exchange-halts-activity.html | title= Bitcoin Price Plunges as Mt. Gox Exchange Halts Activity | last=Dougherty | first=Carter | accessdate=9 February 2014 }}</ref> The company said it was pausing withdrawal requests “to obtain a clear technical view of the currency processes”.<ref name=doughterty2014/> The company issued a press release on February 10, 2014 stating that the issue was due to transaction malleability: “A bug in the bitcoin software makes it possible for someone to use the Bitcoin network to alter transaction details to make it seem like a sending of bitcoins to a bitcoin wallet did not occur when in fact it did occur. Since the transaction appears as if it has not proceeded correctly, the bitcoins may be resent. MtGox is working with the Bitcoin core development team and others to mitigate this issue.”<ref>{{cite press release | title=Update - Statement Regarding BTC Withdrawal Delays | publisher=Mt. Gox Co. Ltd. | date=10 February 2014 | url=https://www.mtgox.com/press_release_20140210.html | archiveurl=https://web.archive.org/web/20140210122955/https://www.mtgox.com/press_release_20140210.html | archivedate=10 February 2014 }}</ref> |
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On 17 February 2014, with all Mt. Gox withdrawals still halted and competing exchanges back in full operation, the company published another press release indicating the steps they claim they are taking to address security issues.<ref>{{cite press release | title=20140217-Announcement: Tokyo, Japan, February 17th, 2014 | url=https://www.mtgox.com/img/pdf/20140217-Announcement.pdf | format=PDF | archiveurl=https://web.archive.org/web/*/https://www.mtgox.com/img/pdf/20140217-Announcement.pdf | archivedate=17 February 2014 | date=17 February 2014 | location=Tokyo | publisher=Mt. Gox }}</ref> In an email interview with the ''[[Wall Street Journal]]'', CEO Mark Karpeles refused to comment on increasing concerns among customers about the financial status of the exchange, did not give a definite date on which withdrawals would be resumed, and wrote that the exchange would impose "new daily and monthly limits" on withdrawals if and when they were resumed.<ref>{{cite news | |
On 17 February 2014, with all Mt. Gox withdrawals still halted and competing exchanges back in full operation, the company published another press release indicating the steps they claim they are taking to address security issues.<ref>{{cite press release | title=20140217-Announcement: Tokyo, Japan, February 17th, 2014 | url=https://www.mtgox.com/img/pdf/20140217-Announcement.pdf | format=PDF | archiveurl=https://web.archive.org/web/*/https://www.mtgox.com/img/pdf/20140217-Announcement.pdf | archivedate=17 February 2014 | date=17 February 2014 | location=Tokyo | publisher=Mt. Gox }}</ref> In an email interview with the ''[[Wall Street Journal]]'', CEO Mark Karpeles refused to comment on increasing concerns among customers about the financial status of the exchange, did not give a definite date on which withdrawals would be resumed, and wrote that the exchange would impose "new daily and monthly limits" on withdrawals if and when they were resumed.<ref>{{cite news | |
Revision as of 18:52, 12 March 2014
Type | Bitcoin exchange |
---|---|
Location | Shibuya, Tokyo, Japan |
Founded | 2010 |
Owner | Tibanne Ltd. |
Currency | Bitcoin |
Website | MtGox.com |
Mt. Gox was a Bitcoin exchange based in Tokyo, Japan.
It was launched in July 2010, and by 2013 was handling 70% of all Bitcoin transactions.[1] In February 2014, the Mt. Gox company suspended trading, closed its website and exchange service, and filed for a form of bankruptcy protection from creditors called minji saisei, or civil rehabilitation, to allow courts to seek a buyer.[2][3] It announced that around 850,000 bitcoins belonging to customers and the company were missing and likely stolen, an amount valued at more than $450 million at the time.[4][5]
History
Domain name
In late 2006, programmer Jed McCaleb (eDonkey2000, Overnet, Ripple) thought of building a website for users of the Magic: The Gathering Online service to let them trade cards like stocks;[6] in January 2007, he purchased the domain name mtgox.com, short for "'Magic The Gathering Online' eXchange"; initially in beta,[7] sometime around late 2007, the service went live for around 3 months before McCaleb moved on to other projects, having decided it was not worth his time. He reused the domain name in 2009 to advertise his card game The Far Wilds.[8]
Mt. Gox founding
In July 2010, he read about Bitcoin on Slashdot,[9] and decided that the nascent Bitcoin community needed an exchange for trading Bitcoin and regular currencies; a week later on 18 July,[10] after writing an exchange website (which did not borrow any code from the 2007 project), he launched it while reusing the spare mtgox.com domain name.[6]
As it began to take off in 2011, McCaleb announced on 6 March 2011 that he had sold MtGox to Mark Karpeles (retaining 12% equity), citing the increasing demands of running an exchange:[11]
I created mtgox on a lark after reading about bitcoins last summer. It has been interesting and fun to do. I’m still very confident that bitcoins have a bright future. But to really make mtgox what it has the potential to be would require more time than I have right now. So I’ve decided to pass the torch to someone better able to take the site to the next level.
Under Karpeles' ownership, the site grew to handle 70% of the world's bitcoin trades by April 2013.[12]
Trading incidents
On 19 June 2011, a security breach of the Mt. Gox bitcoin exchange caused the nominal price of a bitcoin to fraudulently drop to one cent on the Mt. Gox exchange, after a hacker allegedly used credentials from a Mt. Gox auditor's compromised computer illegally to transfer a large number of bitcoins to himself. He used the exchange's software to sell them all nominally, creating a massive "ask" order at any price. Within minutes the price corrected to its correct user-traded value.[13][14][15][16][17][18] Accounts with the equivalent of more than $8,750,000 were affected.[15]
On 22 February 2013, following an introduction of new anti-money laundering requirements by Dwolla, some Dwolla accounts became temporarily restricted. As a result, transactions from Mt. Gox to those accounts were cancelled by Dwolla. The funds never made it back to Mt. Gox accounts. Mt. Gox help desk issued the following comment: "Please be advised that you are actually not allowed to cancel any withdrawals received from Mt. Gox as we have never had this case before and we are working with Dwolla to locate your returned funds." The funds were finally returned on May 3, more than 3 months later, with a note "Please be advised never to cancel any Dwolla withdrawals from us again".
In March 2013, the bitcoin transaction log or "blockchain" temporarily forked into two independent logs with differing rules on how transactions could be accepted. The Mt. Gox bitcoin exchange briefly halted bitcoin deposits. Bitcoin prices briefly dipped by 23% to $37 as the event occurred[19][20] before recovering to their previous level in the following hours, a price of approximately $48.[21]
Suspension of trading
Mt. Gox suspended trading on 11 April 2013 until 12 April 2013 2 am UTC for a "market cooldown".[22] The value of a single bitcoin fell to a low of $55.59 after the resumption of trading before stabilizing above $100.
Mt. Gox suspended withdrawals in US dollars on June 20, 2013.[23] On July 4, 2013, Mt. Gox announced that it had "fully resumed" withdrawals, but as of September 5, 2013, few US dollar withdrawals had been successfully completed.[24][25][26]
On August 5, 2013, Mt. Gox announced that they have incurred "significant losses" due to crediting deposits which had not fully cleared. Mt. Gox announced that new deposits would no longer be credited until the funds transfer to Mt. Gox is fully completed.[27]
Legal issues
On 2 May 2013 CoinLab filed a $75 million lawsuit against Mt. Gox alleging a breach of contract.[28] The companies announced a partnership in February 2013 under which CoinLab would handle all of Mt. Gox's North American services.[28] CoinLab's lawsuit contends that Mt. Gox failed to allow them to move existing U.S. and Canadian customers from Mt. Gox to CoinLab.[28]
On 15 May 2013 the US Department of Homeland Security (DHS) issued a warrant to seize money from Mt. Gox's US subsidiary's account with payment processor Dwolla.[29] The warrant suggests the US Immigration and Customs Enforcement (ICE), an investigative branch of the DHS, felt the subsidiary, which should have been licensed by the US Financial Crimes Enforcement Network (FinCEN), was operating as an unregistered money transmitter in the United States.[29][30]
On 29 June 2013, Mt. Gox received its money services business (MSB) license from FinCEN.[30]
Withdrawals delayed or refused
Wired Magazine reported in November 2013 that customers were experiencing delays of weeks to months in withdrawing funds from their accounts.[12] The article said that the company had “effectively been frozen out of the U.S. banking system because of its regulatory problems”. Customer complaints about long delays were mounting as of February 2014, with more than 3300 posts in a thread about the topic on the Bitcoin Talk online forum.[31]
February 2014 shutdown and bankruptcy
This article may contain an excessive amount of intricate detail that may interest only a particular audience.(March 2014) |
On 7 February 2014, all Bitcoin withdrawals were halted by Mt. Gox.[32] The company said it was pausing withdrawal requests “to obtain a clear technical view of the currency processes”.[32] The company issued a press release on February 10, 2014 stating that the issue was due to transaction malleability: “A bug in the bitcoin software makes it possible for someone to use the Bitcoin network to alter transaction details to make it seem like a sending of bitcoins to a bitcoin wallet did not occur when in fact it did occur. Since the transaction appears as if it has not proceeded correctly, the bitcoins may be resent. MtGox is working with the Bitcoin core development team and others to mitigate this issue.”[33]
On 17 February 2014, with all Mt. Gox withdrawals still halted and competing exchanges back in full operation, the company published another press release indicating the steps they claim they are taking to address security issues.[34] In an email interview with the Wall Street Journal, CEO Mark Karpeles refused to comment on increasing concerns among customers about the financial status of the exchange, did not give a definite date on which withdrawals would be resumed, and wrote that the exchange would impose "new daily and monthly limits" on withdrawals if and when they were resumed.[35] A poll of 3000 Mt. Gox customers by CoinDesk indicated that 68% of customers were still awaiting funds from Mt. Gox. The median waiting time was between one to three months. 21% of poll respondents had been waiting for three months or more.[36]
On 20 February 2014, with all withdrawals still halted, Mt. Gox issued yet another statement, giving no date for the resumption of withdrawals.[37] A protest by two Bitcoin enthusiasts outside the building that houses the Mt. Gox headquarters in Tokyo continued. Citing "security concerns", Mt. Gox announced they had moved their offices to a different location in Shibuya. Bitcoin prices quoted by Mt. Gox dropped below 20% of the prices on other exchanges, reflecting the market's estimate of the unlikelihood of Mt. Gox paying their customers.[38][39]
On 23 February 2014, Mark Karpeles, the CEO of Mt. Gox, resigned from the board of the Bitcoin Foundation.[40] The same day, all posts on their Twitter account were removed.[41]
On 24 February 2014, Mt. Gox suspended all trading, and hours later its website went offline, returning a blank page.[42][43][44] An alleged leaked internal crisis management document claimed that the company was insolvent, after losing 744,408 bitcoins in a theft which went undetected for years.[42][43][45][46] Six other major bitcoin exchanges released a joint statement distancing themselves from Mt. Gox, shortly before Mt. Gox's website went offline.[47][48]
On 25 February 2014, Mt.Gox reported on its website that a "decision was taken to close all transactions for the time being", citing "recent news reports and the potential repercussions on MtGox's operations". The chief executive, Mark Karpeles told Reuters that Mt. Gox was "at a turning point".[49][50][51][52]
On 28 February 2014 Mt. Gox filed for bankruptcy protection in Tokyo, and the company reported that the company had liabilities of about 6.5 billion yen ($64 million at the time), and 3.84 billion yen in assets.[53][54] The company said they had lost almost 750,000 of its customers' bitcoins, and around 100,000 of its own bitcoins, totaling around 7% of all bitcoins, and worth around $473 million near the time of the filing.[53][54] Mt. Gox released a statement saying "The company believes there is a high possibility that the Bitcoins were stolen,”[5] thus beginning a search for the missing money. Chief Executive of Mt. Gox, Mark Karpelès, said technical issues opened up the way for fraudulent withdrawals. Mt. Gox also faces lawsuits from its customers.[55]
On 9 March 2014, Mt. Gox filed for bankruptcy protection in the United States to temporarily halt U.S. legal action against the Japanese company by traders who allege the operation was a fraud.[56][57][58]
Tibanne
Mt. Gox[citation needed] | |
Founded | Tokyo, Japan (October 29, 2009[59][60] | )
Founder | Mark Karpeles[59][60] |
Headquarters | , Japan |
Key people | Mark Karpeles (CEO)[62] |
Products | Mt. Gox bitcoin exchange[citation needed] |
Number of employees | 10 (As of 2013)[59] |
Subsidiaries |
|
Website | http://www.tibanne.com |
The exchange is operated by Tokyo-based Tibanne Co. Ltd., sometimes listed as K.K. Tibanne, which describes itself as specializing ”in web hosting, application development, and system management.”[62][64][65][citation needed] The Tokyo-registered company, named after founder Mark Karpeles' orange cat, was established in 2009, prior to his acquisition of Mt. Gox.[59][60]
See also
References
- ^ Vigna, Paul (2014-02-25). "5 things about Mt. Gox's crisis". The Wall Street Journal.
- ^ McLannahan, Ben (2014-02-28). "Bitcoin exchange Mt Gox files for bankruptcy protection". Financial Times.
- ^ Abrams, Rachel; Goldstein, Matthew; Tabuchi, Hiroko (2014-02-28). "Erosion of Faith Was Death Knell for Mt. Gox". The New York Times.
- ^ Abrams, Rachel; Popper, Nathaniel (2014-02-25). "Trading Site Failure Stirs Ire and Hope for Bitcoin". The New York Times.
- ^ a b Mt. Gox Seeks Bankruptcy After $480 Million Bitcoin Loss, Carter Dougherty and Grace Huang, Bloomberg News, Feb. 28, 2014
- ^ a b Statement by McCaleb February 2014
- ^ https://web.archive.org/web/20070501000000*/http://mtgox.com
- ^ https://web.archive.org/web/20090812073342/http://www.mtgox.com/
- ^ http://ripple.com/blog/interview-with-jed-mccaleb-inventor-of-the-ripple-protocol-and-co-founder-of-opencoin/
- ^ https://bitcointalk.org/index.php?topic=444.msg3866#msg3866
- ^ https://bitcointalk.org/index.php?topic=4187.msg60610#msg60610
- ^ a b McMillan, Robert; Metz, Cade (6 November 2013). "The rise and fall of the world's largest Bitcoin exchange". Wired. Condé Nast. Retrieved 8 February 2014.
- ^ Karpeles, Mark (30 June 2011). "Clarification of Mt Gox Compromised Accounts and Major Bitcoin Sell-Off" (Press release). Tibanne Co. Ltd. Archived from the original on 19 September 2014.
{{cite press release}}
:|archive-date=
/|archive-url=
timestamp mismatch; 19 September 2011 suggested (help) - ^ Bitcoin Report Volume 8 - (FLASHCRASH). YouTube BitcoinChannel. 19 June 2011.
- ^ a b Mick, Jason (19 June 2011). "Inside the Mega-Hack of Bitcoin: the Full Story". DailyTech.
- ^ Lee, Timothy B. (19 June 2011). "Bitcoin prices plummet on hacked exchange". Ars Technica. Condé Nast.
- ^ Mark Karpeles, 20 June 2011, Huge Bitcoin sell off due to a compromised account – rollback, Mt. Gox Support [dead link ]
- ^ Chirgwin, Richard (19 June 2011). "Bitcoin collapses on malicious trade – Mt Gox scrambling to raise the Titanic". The Register.
- ^ Lee, Timothy. "Major glitch in Bitcoin network sparks sell-off; price temporarily falls 23%". Ars Technica. Condé Nast. Retrieved 12 March 2013.
- ^ Blagdon, Jeff. "Technical problems cause Bitcoin to plummet from record high, Mt. Gox suspends deposits". The Verge. Retrieved 12 March 2013.
- ^ "Bitcoin Charts". Bitcoin Charts.
- ^ "Twitter / MtGox: Trading is suspended until". Twitter.com. Retrieved 2014-02-17.[dead link ]
- ^ McMillan, Robert (20 June 2013). "Bitcoin's Big Bank Problem: Why Did Mt. Gox Halt U.S. Payouts?". Wired. Condé Nast.
- ^ Vigna, Paul (5 July 2013). "Bitcoin operator Mt. Gox resumes withdrawals". The Wall Street Journal.
- ^ Vigna, Paul (31 July 2013). "Bitcoin exchange Mt. Gox still grappling with slowdown". The Wall Street Journal.
- ^ Marron, Donald (3 September 2013). "How Bitcoin spreads violate a fundamental economic law". Forbes.
- ^ "August 2013 Mt. Gox Status Update" (Press release). Mt. Gox Co. Ltd. 5 August 2013. Archived from the original on 5 August 2013.
- ^ a b c Chen, Adrian (2 May 2013). "Massive Bitcoin Business Partnership Devolves Into $75 Million Lawsuit". Gawker Media. Retrieved 8 June 2013.
- ^ a b Dillet, Romain (16 May 2013). "Feds Seize Assets From Mt. Gox's Dwolla Account, Accuse It Of Violating Money Transfer Regulations". TechCrunch. AOL Inc. Retrieved 10 February 2014.
- ^ a b Buterin, Vitalik (29 June 2013). "MtGox Gets FinCEN MSB License". Bitcoin Magazine. Coin Publishing Ltd. Retrieved 10 February 2014.
- ^ Wong, Joon Ian (4 February 2014). "Poll: Are you having Mt. Gox withdrawal issues?". CoinDesk. Retrieved 9 February 2014.
- ^ a b Dougherty, Carter (7 February 2014). "Bitcoin Price Plunges as Mt. Gox Exchange Halts Activity". Bloomberg. Retrieved 9 February 2014.
- ^ "Update - Statement Regarding BTC Withdrawal Delays" (Press release). Mt. Gox Co. Ltd. 10 February 2014. Archived from the original on 10 February 2014.
- ^ "20140217-Announcement: Tokyo, Japan, February 17th, 2014" (PDF) (Press release). Tokyo: Mt. Gox. 17 February 2014.
{{cite press release}}
:|archive-url=
is malformed: timestamp (help) - ^ Mochizuki, Takashi and Warnock, Eleanor (February 17, 2014). "Bitcoin Platform Mt. Gox Apologizes for Delayed Response - CEO Karpeles Declines To Shed Light On How Customer Funds Are Protected". Wall Street Journal.
{{cite news}}
: CS1 maint: multiple names: authors list (link) - ^ Wong, Joon Ian (15 February 2014). "68% of Mt. Gox Users Still Awaiting Their Funds, Survey Reveals". Coin Desk.
- ^ Clinch, Matt (February 20, 2014). "Bitcoin investor fury at Mt Gox delays". CNBC.
- ^ Byford, Sam (February 20, 2014). "Mt. Gox, where is our money?". The Verge.
- ^ "Bitcoin exchange in Downward Spiral: "Mt Gox has left the building"". Hannover, Germany: Heise. February 20, 2014.
- ^ "Mt. Gox resigns from Bitcoin Foundation". Reuters. February 23, 2014. Retrieved 25 February 2014.
- ^ "MtGox Resigns From Bitcoin Foundation, Deletes All Tweets From Twitter Feed". Business Insider. February 23, 2014. Retrieved 25 February 2014.
- ^ a b McMillan, Robert (24 February 2014). "Bitcoin exchange Mt. Gox implodes amid allegations of $350 million hack". Wired. Retrieved 25 February 2014.
- ^ a b Popper, Nathaniel; Abrams, Rachel (25 February 2014). "Apparent theft at Mt. Gox shakes Bitcoin world". The New York Times. Retrieved 25 February 2014.
- ^ Nagano, Yuriko; Wright, Stephen (25 February 2014). "Website of Bitcoin exchange Mt. Gox offline". Associated Press. Retrieved 25 February 2014.
- ^ How a bug in bitcoin led to MtGox's collapse, Alex Hern, The Guardian, Feb. 27, 2014
- ^ [1]
- ^ "Bitcoin exchange Mt. Gox's website down". Reuters. 25 February 2014. Retrieved 25 February 2014.
- ^ "The Coinbase Blog - Joint Statement Regarding MtGox". The Coinbase Blog (Press release). Coinbase. 24 February 2014. Retrieved 24 February 2014.
- ^ "Mt. Gox website says all transactions closed "for the time being"". Reuters. 25 February 2014. Retrieved 25 February 2014.
- ^ Lowery, Adrian (25 February 2014). "Is it the beginning of the end for Bitcoin? Virtual currency in turmoil as rumoured $375m theft closes major exchange". This is money. Retrieved 25 February 2014.
- ^ Anklam, Fred (25 February 2014). "Bitcoin exchange Mt. Gox goes offline amid turmoil". USA Today. Retrieved 25 February 2014.
- ^ Vaishampayan, Saumya (25 February 2014). "Mt. Gox says transactions closed 'for time being'". Market Watch. Retrieved 25 February 2014.
- ^ a b Warnock, Eleanor; Mochizuki, Takashi; Martin, Alexander (28 February 2014). "Mt. Gox files for bankruptcy protection". The Wall Street Journal. Retrieved 28 February 2014.
- ^ a b Takemoto, Yoshifumi; Knight, Sophie (28 February 2014). "Mt. Gox files for bankruptcy, blames hackers for losses". Reuters. Retrieved 28 February 2014.
- ^ Sidel, Robin (28 February 2014). "Almost Half a Billion Worth of Bitcoins Vanish". Wall Street Journal. Retrieved 3 March 2014.
- ^ Finley, Klint (10 March 2014). "Bitcoin Exchange Mt. Gox Files for U.S. Bankruptcy as Death Spiral Continues". Wired. Retrieved 11 March 2014.
- ^ Hals, Tom (10 March 2014). "Mt. Gox files U.S. bankruptcy, opponents call it a ruse". Reuters. Retrieved 11 March 2014.
- ^ "Bitcoin exchange Mt. Gox files for US bankruptcy". New York Post. 10 March 2014. Retrieved 11 March 2014.
- ^ a b c d e "TIBANNE Co., Ltd". Tokyo Chamber of Commerce and Industry. Archived from the original on 12 November 2013.
- ^ a b c Philippe, Berry (2014-02-27). "MtGox: Mark Karpèles, un "supergeek" français au cœur du scandale bitcoin" (in French). Retrieved 2014-02-27.
- ^ Warnock, Eleanor (17 February 2014). "Mt. Gox shows Bitcoin's growing pains". The Wall Street Journal.
{{cite news}}
:|first1=
missing|last1=
(help); Missing pipe in:|first1=
(help)CS1 maint: numeric names: authors list (link) - ^ a b "Tibanne Co. Ltd". Tibanne Co. Ltd. Retrieved 2014-02-27.
- ^ Siluk, Shirley (15 May 2013). "Why are the feds seizing Mt. Gox and Dwolla funds?". CoinDesk. Retrieved 25 February 2014.
- ^ Karpeles, Mark. "日本 Mark Karpelès". LinkedIn. Retrieved 2014-02-27.
- ^ "loading". Mtgox.com. Retrieved 2014-02-17.[dead link ]