Bitcoin plunges after marketplace indefinitely halts withdrawals
2014 02 11

From: reuters.com



The price of the digital currency bitcoin slid to its lowest level in nearly two months on Monday after bitcoin digital marketplace Mt. Gox said a halt on withdrawals it announced on Friday would continue indefinitely after it detected "unusual activity."

The bitcoin price varied dramatically from one exchange to another, with Tokyo-based Mt. Gox, the best known operator of a bitcoin digital marketplace, recording one of the biggest drops for the day.

On the Mt. Gox platform the currency plunged to as low as $500 early on Monday, down more than 27 percent from Friday’s final price of $692, according to the Mt. Gox website. It last traded at $595.74, off nearly 14 percent from Friday.

"This technical issue is of a much larger intensity than we’ve seen in the past," said Sebastien Galy, currency strategist at Societe Generale in New York. "The market may be realizing that there are issues which are specific to these forms of currencies."

The bitcoin in recent months started to gain wider acceptance, with Overstock.com and the Sacramento Kings basketball team both saying they would begin to accept the currency.

More recently, the digital currency has drawn increased scrutiny. New York state’s top bank regulator in late January revealed plans to regulate businesses handling transactions in bitcoin this year.

TRANSACTIONS COULD BE ALTERED

The bitcoin price started falling fast on Friday when Mt. Gox said it was temporarily halting withdrawals due to unexplained technical issues.

In an updated statement on Monday, Mt. Gox said withdrawals were on hold indefinitely after it "has detected unusual activity on its bitcoin wallets and performed investigations during the past weeks. This confirmed the presence of transactions which need to be examined more closely."

Mt. Gox said a "bug in the bitcoin software" could allow transaction details to be altered.

In effect, someone on the network could alter transaction details to make it appear a transfer of bitcoins from one digital wallet to another had not occurred when in fact it had. This might cause the transfer to be repeated.

A bitcoin wallet is an application that stores bitcoins for the currency’s users.

Mt. Gox said the issue was not limited to the exchange and "affects all transactions where bitcoins are being sent to a third party." It said the withdrawal suspension would be in effect until the issue has been resolved.

CoinDesk, which launched the CoinDesk Bitcoin Price Index in September, removed Mt. Gox from its index Monday, citing its "persistent failure to meet the index’s standards for inclusion."

"These recent withdrawal restrictions are just the latest in a series of issues which have made Mt. Gox’s inclusion in the BPI problematic," CoinDesk said.

On CoinDesk’s bitcoin index, the bitcoin price was lower but not by nearly as much as on the Mt. Gox platform. The CoinDesk index showed bitcoin at $667.79 on late Monday afternoon, down about 5 percent from Friday’s close of $703.57. Its low for the day was around $540 versus $500 on Mt. Gox.

On both platforms, the price was still around the lowest since late December. The price had topped $1,000 as recently as late January.

"With the volatility in the currency being as much as it is, it’s going to take some time before we get enough of a comfort level from investors and merchants to enable it to be used ubiquitously," said Darrin Peller, managing director at Barclays in New York.

The arrest of a prominent bitcoin advocate just over two weeks ago threw a spotlight on the currency. Charlie Shrem, 24, operator of the Bitinstant bitcoin exchange company, was charged by U.S. prosecutors with conspiring to commit money laundering by helping to funnel cash to illicit online drugs bazaar Silk Road. The following day Shrem resigned as vice chairman of the Bitcoin Foundation, an advocacy group.

Source: reuters.com



Related Articles
Bitcoin Just Completely Crashed As Major Exchange Says Withdrawals Remain Halted


Latest News from our Front Page

Your Smartphone Broadcasts Your Entire Life To The Secret Service
2014 09 23
Intelligence services collect metadata on the communication of all citizens. Politicians would have us believe that this data doesn’t say all that much. A reader of De Correspondent put this to the test and demonstrated otherwise: metadata reveals a lot more about your life than you think. Ton Siedsma is nervous. He made the decision weeks ago, but keeps postponing it. ...
Scots were tricked into voting ‘No’ – Salmond
2014 09 23
London politicians gulled Scottish voters out of independence by making a false “vow” to grant Glasgow extra powers, First Minister Alex Salmond has said. He also raised the prospect of another referendum, saying the break-up is inevitable. Alex Salmond, leader of the ’Yes’ campaign and the outgoing head of the Scottish National Party (SNP), told the BBC’s Sunday Politics program that ...
The Most Terrifying Thing About Ebola
2014 09 23
The disease threatens humanity by preying on humanity. Suspected Ebola patient Finda “Zanabo” prays over her sick family members before being admitted to the Doctors Without Borders Ebola treatment center on Aug. 21, 2014, near Monrovia, Liberia. Photo by John Moore/Getty Images As the Ebola epidemic in West Africa has spiraled out of control, affecting thousands of Liberians, Sierra Leonians, and Guineans, ...
Man bitten by Ebola patient flown to Switzerland
2014 09 22
Swiss authorities say a male nurse who was bitten by an Ebola patient while working in West Africa has been flown to Switzerland as a precaution. The health ministry says the unidentified man was working for an international organization in Sierra Leone when he was bitten by a child infected with Ebola on Saturday. The ministry says the nurse was wearing protective ...
Climate March in New York City Reveals Communists Demanding ’Revolution, Nothing Less’ - Trash the City With Garbage
2014 09 22
Tens-of-thousands of demonstrators took to the streets of New York City Sunday to demand political leaders take action on climate change. While the protest remained peaceful, much of the “People’s Climate March” appeared to be made up of fringe elements of the political left. Dozens of signs denouncing capitalism were spotted at the demonstration, often held by self-proclaimed socialists. “Capitalism is destroying the ...
More News »