Monday, February 24, 2014

HOT: Report Bitcoin Exchange Mt. Gox Insolvent

Six major Bitcoin organizations have issued a joint statement stating that Mt. Gox is now insolvent.

Heres' the full statement:
The purpose of this document is to summarize a joint statement to the Bitcoin community regarding the insolvency of 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. There are hundreds of trustworthy and responsible companies involved in bitcoin. These companies will continue to build the future of money by making bitcoin more secure and easy to use for consumers and merchants.  As with any new industry, there are certain bad actors that need to be weeded out, and that is what we are seeing today.

We are confident, however, that strong Bitcoin companies, led by highly competent teams and backed by credible investors, will continue to thrive, and to fulfill the promise that bitcoin offers as the future of payment in the Internet age.

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. As part of the effort to re-assure customers, the following services will be coordinating efforts over the coming days to publicly reassure customers and the general public that all funds continue to be held in a safe and secure manner: Coinbase, Kraken, BitStamp, Circle, and BTC China.

We strongly believe in transparent, thoughtful, and comprehensive consumer protection measures. We pledge to lead the way.

Bitcoin operators, whether they be exchanges, wallet services or payment providers, play a critical custodial role over the bitcoin they hold as assets for their customers.  Acting as a custodian should require a high-bar, including appropriate security safeguards that are independently audited and tested on a regular basis, adequate balance sheets and reserves as commercial entities, transparent and accountable customer disclosures, and clear policies to not use customer assets for proprietary trading or for margin loans in leveraged trading.  It does not appear to any of us that MtGox followed any these essential requirements as a financial services provider.

The following industry leaders stand by this statement:

Fred Ehrsam — Co-founder of Coinbase

Jesse Powell — CEO of Kraken

Nejc Kodrič — CEO of

Bobby Lee — CEO of BTC China

Nicolas Cary — CEO of

Jeremy Allaire — CEO of Circle

Trading on MtGox has been halted, according to multiple users and apparent lack of activity on websites tracking Gox trades.


Via Business Insider:

Gox customers on and reddit have reported getting messages saying trading has been disabled.
In addition,, which has an API feed directly plugged into live Gox trades, is currently showing no activity. The same is true on


Mt. Gox claimed to have over one million accounts and at one time accounted for more than 25% of all Bitcoin trading. Losses are likely in the hundreds of millions of dollars.

Mt. Gox May Have Lost 750,000 Bitcoins


  1. "Mt. Gox claimed to have over one million accounts and at one time accounted for more than 25% of all Bitcoi trading. Losses are likely in the hundreds of millions."

    Bear with me here, but if $5 mil in confiscation tipped over Mt. Gox, how could it snowball into hundreds of millions in losses absent total fraud?

    1. Sometime after the $5 million confiscation, the price of Bitcoin started to skyrocket. If Mt. Gox was using cash from new orders to fill earlier withdrawals the cost of filling outstanding Bitcoin orders at earlier prices would have soared.

      On top of that you have the report of 750,000 bitcoins being stolen. It's a mess.