Mt. Gox CEO: I'm working to find fixes for our Bitcoin exchange

The head of the troubled Bitcoin exchange wants to reassure customers. But how can Mt. Gox recover from its financial problems?

CNET

Mt. Gox has been through a rough month. But its CEO is trying to keep hopes alive through a new message directed at the exchange's customers.

On Monday, the exchange's Web site went offline amid reports that Mt. Gox was insolvent after losing hundreds of millions of dollars. On Tuesday, the site resurfaced with the message that the exchange was halting all transactions for the time being following the news reports and their "potential repercussions."

On Wednesday, the site was updated with the following statement from CEO Mark Karpeles:

February 26th 2014

Dear MtGox Customers,

As there is a lot of speculation regarding MtGox and its future, I would like to use this opportunity to reassure everyone that I am still in Japan, and working very hard with the support of different parties to find a solution to our recent issues.

Furthermore I would like to kindly ask that people refrain from asking questions to our staff: they have been instructed not to give any response or information. Please visit this page for further announcements and updates.

Sincerely,
Mark Karpeles

What got Mt. Gox into trouble in the first place?

Earlier this month, the exchange announced that it would temporarily halt all withdrawal requests due to a technical bug in its Bitcoin withdrawal process. Mt. Gox claimed that the reported bug affects all Bitcoin transactions. But that claim was disputed by the Bitcoin Foundation, which instead put the blame on Mt. Gox's own handling of Bitcoin transactions.

Where does all this leave Mt. Gox now?

A spokesman for a group of Bitcoin exchanges told Recode that "Mt Gox has confirmed it will file bankruptcy in private discussions with other members of the Bitcoin community." HTML code behind Mt. Gox's Web site on Monday also revealed the following text: "put announce for mtgox acq here," a sign that the exchange could find itself swallowed up by another company.

On Tuesday, Karpelis told Reuters that an announcement is on the way.

"We should have an official announcement ready soon-ish," Karpelis said. "We are currently at a turning point for the business. I can't tell much more for now as this also involves other parties."

In the meantime, certain officials have started investigating Mt. Gox's predicament.

Authorities in the exchange's homebase of Japan are gathering information on the case, Japan Chief Cabinet Secretary Yoshihide Suga said Wednesday, according to Reuters. And federal prosecutors in New York have reportedly sent a subpoena to Mt. Gox, The Wall Street Journal said.

In an ironic twist, Karpelis' LinkedIn profile lists the following skill as part of his summary: "I have a long experience in company creation, and experienced almost any imaginable kind of trouble."

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About the author

Journalist, software trainer, and Web developer Lance Whitney writes columns and reviews for CNET, Computer Shopper, Microsoft TechNet, and other technology sites. His first book, "Windows 8 Five Minutes at a Time," was published by Wiley & Sons in November 2012.

 

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