Bitcoins Offered on Mt.Gox Drop as Withdrawals Halted

Bitcoin holders are offering the virtual money for $124 on the online exchange Mt.Gox, down from $829 two weeks ago, following its decision to halt withdrawals earlier this month. Tokyo-based Mt.Gox, one of the first exchanges for the virtual currency, said in a statement yesterday that it’s still working to resume Bitcoin withdrawals for clients. The digital currency is currently trading at $566 on London-based Bitstamp and for $553 on BTC-e in Bulgaria. 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 isn’t controlled by any authority. “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,” Gil Luria, an analyst at Wedbush Securities Inc., wrote in an e-mail. The inability to remove funds from Mt.Gox is raising concerns that hackers might have gained access to deposits, Luria said. Other exchanges were crippled by a Internet-wide hacking attack that shut down marketplaces across the Web this month. Some have since resumed operations. Mt.Gox didn’t return repeated requests by e-mail and phone for comment. The company also 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.

Missing Money

Kolin Burges of Britain flew from London to Tokyo on Feb. 13 and has been protesting outside the Mt.Gox headquarters since then. He said he has 285 Bitcoins at the exchange that he can’t withdraw, and isn’t buying its claims of technical issues. “Other exchanges do not have this kind of problem,” Burges said in an interview. “I do not believe that technical problems are the cause of all these delays.” He has a sign that says “Mt.Gox where’s our money” in Japanese. He confronted Mt.Gox Chief Executive Officer Mark Karpeles to ask him if the site still has everyone’s Bitcoins. Karpeles didn’t reply, an online video of the exchange showed. Mt.Gox, one of the largest online exchanges where Bitcoins are traded for dollars, euros and other currencies, has had other stumbles. Mt.Gox temporarily halted or delayed withdrawals several times last year.

Trapped Funds

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 $1,200 last year from $12 at the beginning of 2013 as it gained mainstream attention. John Beltzer, 54, said he plans to grab his eight Bitcoins and close out his account at Mt. Gox as soon as he can. Beltzer, who runs a charity called Songs of Love Foundation, said he was told by Mt.Gox that hackers penetrated his account. There’s $45 in cash and the Bitcoins in the Mt.Gox account that are trapped and may be devalued, he said. “I’ll never deal with them again,” Beltzer said. Mt.Gox clients will probably move their funds to rival exchanges once they’re 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. Now, “their chances of a comeback are much lower.” Compliance officers at Singapore-based exchange itBit Pte Ltd. have been working nights to screen people who want to become customers, said Antony Lewis, the company’s head of business development. ItBit has received multiple inquiries from Mt.Gox users, who are starting to refer to Bitcoins deposited there as GoxCoins that are trapped in a “Japanese walled garden,” he said. “They are cheap, but if you buy them, you risk not being able to get anything out,” he said. Source :  http://www.bloomberg.com/news/2014-02-21/bitcoins-offered-on-mt-gox-drop-as-withdrawals-halted.html