Once considered the only trusted and reliable source for bitcoins, Mt. Gox is crumbling right before our eyes. Japan based Mt. Gox announced this morning that they would suspend all bitcoin withdrawals indefinitely until they can figure out a solution to some of the technical problems plaguing their systems. The release also notes that there will be an update on the matter on the 10th of February, so those of you who use Mt. Gox should expect a long wait to have access to your coins.
In the press release, Mt. Gox did not exactly state what was going wrong with their systems, but the suspension of payouts is just the latest problem that the company has had recently. Customers have reported waiting months to receive their coin payouts, which in turn has resulted in a huge amount of people trying to gain access to their coins, fearing that they may perhaps be lost for good.
The company has also had problems with the U.S. government, with regulators seizing over $5 million of Mt. Gox’s assets.
With this news, people are questioning whether this is just a glitch in the Mt. Gox systems, or if they are having a genuine liquidity problem. After the announcement of this news, the price of bitcoins dropped over $100 to below $700, but as of the writing of this article, the currency is back over $700 suggesting that investors think that the problems plaguing Mt. Gox are technical, not financial.
Regardless of how this situation turns out for Mt. Gox, this is a hit to the currency since the company’s CEO is a board member of the Bitcoin Foundation, a non-profit company that advocates for the use of the currency.