Mt Gox site and statement addressing its solvency disappears

Mt Gox site and statement addressing its solvency disappears

Summary: The bitcoin price has plummeted after Mt Gox cleared its Twitter feed and web presence, and a joint statement from other bitcoin exchanges initially spoke of Mt Gox's insolvency before disappearing.

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Mt Gox, the bitcoin exchange that only yesterday resigned from the board of the Bitcoin Foundation, has today continued the purging of its online presence, with the exchange now presenting an empty page as its homepage.

Yesterday, Mt Gox has cleared its Twitter feed, and has suspended trading in bitcoins since Thursday last week.

Overnight, a number of other bitcoin exchanges signed a joint statement to the bitcoin community regarding the drama that is increasingly engulfing the cryptocurrency.

"To reestablish 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," the statement said.

However, the statement, as available on Coinbase, has undergone at least one set of revisions. At the time of writing, an unchanged version was still unavailable on Circle, which showed that the statement was originally slated to deal with the insolvency of Mt Gox.

"The purpose of this document is to summarise a joint statement to the bitcoin community regarding the insolvency of Mt Gox," the original statement began.

"This tragic violation of the trust of users of Mt Gox was the result of one company's abhorrent actions and does not reflect the resilience or value of bitcoin and the digital currency industry."

The edited version now closes with the following sentence

"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."

But the original had an additional kicker: "It does not appear to any of us that Mt Gox followed any these essential requirements as a financial services provider.".

The joint statement was signed by the CEOs of Kraken, Bitstamp.net, BTC China, Blockchain.info, Circle, and one of the co-founders of Coinbase.

In the past 24 hours until the time of writing, the price of bitcoins on Bitstamp has fallen by $100 to $475, while the price for bitcoins on Mt Gox is around the $135 mark, having fallen to $100 previously.

At the start of the year, the cryptocurrency looked headed to the moon, as the price peaked at $1,000.

In Australian Senate Estimates yesterday, John Schmidt, CEO of the Australian Transaction Reports and Analysis Centre, the Australian government agency responsible for countering money laundering and the financing of terrorism, said that the Australian government is able to track any conversions into or out of the bitcoin ecosystem that involve Australian dollars.

"Australia is very fortunate among its international counterparts, in that we are one of the few countries which currently collects all international funds transfers, into or out of Australia," Schmidt said.

"At some point, in the current world, to realise the benefits of those transactions, you will want to convert them back into Australian dollars — and at that point, we have an opportunity to identify those transactions."

Schmidt said that the agency does not have the cryptocurrency high on its threat list.

"Because they are not backed by government, because they are floating in the ether and there is no regulator as such, there's a volatility and exposure there to individuals using them, which is limiting their usage, and the mere fact that there aren't that many sites where you can use them yet."

Topics: Security, Privacy, Australia

About

Chris started his journalistic adventure in 2006 as the Editor of Builder AU after originally joining CBS as a programmer. After a Canadian sojourn, he returned in 2011 as the Editor of TechRepublic Australia, and is now the Australian Editor of ZDNet.

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16 comments
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  • As I suspected...

    ...Mt. Gox was excommunicated, as it should have been. It would have been surprising if the quick shutdown had been entirely voluntary.

    Like it or not, Bitcoin needs policing, and it appears that the policing has begun.

    The experiment continues.
    John L. Ries
    • how?

      How can one police bitcoins when anyone anywhere can send/accept them?
      Omego2K
      • We just saw it happen

        An apparently crooked exchange was apparently forced out of business by the Bitcoin Foundation; and was publicly repudiated by several other exchanges.

        Assuming the facts were reported accurately, this would be self-policing at its best.
        John L. Ries
        • At it's best?

          The company has been in trouble since 2011, it lost how many hundreds of millions of dollars of fake currency, and left customers empty-handed. Ask the investors how effective this self-policing has been. L-M-A-O.
          ejhonda
          • LOL, Self-policing

            This is like a cop arresting the bloody pulp of a dead body left behind by an angry aggreived mob, and then pronouncing: "See, our policing works, we got the criminal right here!"

            No, the Bitcoin foundation didn't "self-police" Mt. Gox out of existence. Mt Gox lost hudreds of millions of dollars in deposits and had to declare bankruptcy.

            You want to impress me with your "policing?" Then set up audting procedures and conduct regular audits of these organizations to catch this sort of thing BEFORE it cripples the bank.

            Right now Bitcoin is looking a lot like Monopoly money: everyone desperately wants it while the game is being played, but once the game is over it's just play money in a cardboard box stashed away in the cupboard 'till next Thanksgiving.
            dsf3g
    • Next comes the professing of innocence

      He who sleeps with animals, wakes up in sh_t
      sickntired44
  • worse now!!!

    I believe they are considering a name change from "Bitcoin" to "BitCON"... works for me!
    Aussie_Troll
  • It's a wrap!

    Well, Bitcoins may soon be worthless, but the specter of Libertarians conned out of what is most important to them in life, their money, by scammers who used their ideology against them is just priceless. Maybe they can sue if they can (a) find someone to sue, and (b) find a judge somewhere who won't laugh them out of court.
    Sir Name
    • very true

      " but the specter of Libertarians conned out of what is most important to them in life, their money, by scammers who used their ideology against them is just priceless"

      very true, and it reminds me of groups like Google who use "Open Source" and do the same thing!
      Aussie_Troll
      • re:

        Yup.
        Sir Name
        • We'll see who has the last laugh on that

          Linux displaced commercial UNIX as the world's most widely used server OS several years ago. And a lot of us are going to hang onto our desktop Linux systems until they're pried from our cold dead hands.
          John L. Ries
      • Just one more

        There is enough greedy suks to go around.
        Naivety is not an excuse for stupidity and there is also enough of that to go around
        sickntired44
    • Probably not worthless...

      ...but we've had some useful reminders of late as to why monetary systems have evolved the way they have during the last century. One of the biggest economic lessons learned during the past two centuries is that as bad as inflation is, deflation is worse; and it's often caused by speculative bubbles like the one we just saw.

      But it's too early to say what the long term future of Bitcoin looks like. It might well survive as a niche medium. It might even become a popular way to send money electronically. But it's highly unlikely to displace state-issued money and even if it did, governments would still have a significant role in regulating commerce as they have throughout recorded history.

      Anarcho-capitalism is a fantasy; always has been, and almost certainly always will be.
      John L. Ries
      • Let me broaden the last statement

        Anarchism is a fantasy. We can argue all we want about the proper role of government and it is right that we do so, but as we're social creatures whose acts inevitably affect others; institutions to regulate social interaction are inevitable. Even if every government on the planet were to collapse next week, new ones (officially recognized or not) would quickly evolve to take their places.

        About the best anarchists can hope for would be something like Phillip K. Dick's "League of Anarchists" whose members would actively fight to prevent government-like institutions from emerging; but even that doesn't seem all that realistic.
        John L. Ries
  • We can only hope that the vast majority of the wealth that was lost ...

    will find a better home.
    jkohut
  • Money

    The old man used to run the Savings Bank in what was know pre war as the Federated Malay States.

    When he retired after the war he brought home an attache case jam packed full of brand
    new bank notes, tens, twenties , fifties, hundreds.

    We used them for monopoly.

    Brother broke his Jap sword in two chopping trees down!!
    redpigg