MT-GOX, once regarded as the World’s biggest Bitcoin exchange, suddenly stopped trading last Tuesday. The spokesperson for MT-GOX affirmed the news, indicating that the business was at a “turning point”, which parked concern about the upcoming future of the virtual currency.
With the shutdown of MT-GOX, many other digital currency exchanges and other early stage investors in bitcoin responded with their opinion in order to make an attempt to reassure investors about the viability and the security measures of bitcoins.
Suddenly on Tuesday, the website of MT-GOX went dark without nay prior announcement and explanation. The Tokyo office was also empty, which created a rage among several protestors who lost money investing in the virtual currency. On the same day, MT-GOX spokesperson mailed Reuters about the official announcement that is soon to be published. However, he did not elaborated much on any details regarding the shutdown of the company.
In the past few years, Bitcoin has been accepted as a popular method of payment and gained popularity. It has also attracted a large number of venture capital investors too. The procedure works this way- an investor deposits bitcoin in the digital wallets at particular exchanges. Hence with the sudden shutdown of the MT-GOX, investors are running in loss, as they cannot retrieve their funds.
There are several documents circulating in the internet which indicates the probable cause for this shutdown. The documents claims that almost 744,000 bitcoins are missing due to malleability related theft, whereas it is to be noted that MT-GOX had $174 million in liabilities against $32.75 million in assets. Going by this scenario, it was nearly impossible to check and verify the documents or the fiscal condition of the exchange. If we consider the internet document to be true, this means almost 6 percent of the 12.4 million bitcoins went missing.
Bitcoin’s website is in favour of saying that the shut-down of MT-GOX operations is a step to protect the site and the users too. The shutdown is a time being matter, which is specifically done to monitor the situation. The digital currency has suddenly got noticed by the regulators, who are primarily concerned with consumer protection and bitcoin’s use in money laundering.
During the beginning of this month, MT-GOX ceased withdrawals, after it noticed some unusual activities on the bitcoins wallets. Post that detection, they also went on with some investigations which eventually pushed the bitcoin process down to their lowest level so far.
In spite of the halt on the beginning of the month, the company still handled huge transactions as compared to other months. Several critics, investors and rivals across the globe think that MT-GOX had long been negligent over the security measures. Many investors in bitcoin, have endured a volatile rise in the value of the unregulated cyber trend, are in favour of saying that they still have faith on the virtual currency despite the recent problems faced by MT-GOX. The Bitcoin Foundation, the digital currency’s trade group, still finds a ray of hope amidst all this mishap, as they think the incident would make investors more responsible and would invoke a sense of reliance among the members of the bitcoin community.