Feeds

Bitcoin value plunges as Mt.Gox halts withdrawals and Russia says 'nyet'

'Technical issue' keeping customers' coins locked away

Security and trust: The backbone of doing business over the internet

The value of Bitcoins dropped sharply on Friday after leading Bitcoin exchange Mt.Gox suspended all withdrawals and the Russian Federation declared virtual currencies illegal.

The exact reasons why Mt.Gox isn't letting customers withdraw their Bitcoins remain murky. According to a statement released on Friday, the exchange had encountered a technical glitch when processing a higher-than-usual volume of currency withdrawal requests, but no further details were given.

"We apologize for the sudden short notice," the statement read. "All bitcoin withdrawal requests will be on pause, and the withdrawals in the system will be returned to your MtGox wallet and can be reinitiated once the issue is resolved. The trading platform will perform as usual for the needs of our customers."

Naturally, online Bitcoin forums have been in uproar over the situation. One Australian going by the online handle "CoinSearcher" was so miffed after repeated attempts to withdraw his Bitcoin from Mt.Gox failed on Wednesday, that he actually booked a flight to the company's Tokyo headquarters to protest – and he posted his story to Reddit.

According to CoinSearcher, he was told by a senior Mt.Gox staffer that the withdrawal problems were a "complex technical issue" and had no implications for the company's own solvency or the liquidity of customers' accounts.

"The BTC withdrawal issue is a technical one, and one that has previously affected the MtGox system, our engineers are working hard to resolve the problem," he was told – but he was unable to get anyone to explain the problem in any detail.

Mt.Gox has offered no guidance on when it will resume processing withdrawal requests, saying only that it will "provide an update" on Monday, February 10.

Meanwhile, a number of Russian Bitcoin exchanges have reportedly closed down after the General Prosecutor of the Russian Federation issued guidance clarifying that trading in Bitcoin and other cryptocurrencies – "kriptovalyuty", in your best Boris Badenov accent – violates Russian law.

"In accordance with Art. 27 of the Federal Law 'On the Central Bank of the Russian Federation', the official currency of the Russian Federation is the ruble ... Bitcoin are money substitutes and cannot be used by individuals and legal entities," reads a Google-translated version of the guidance.

The prosecutor's statement goes on to cite the usual concerns about money laundering, and that Bitcoin's price "is determined solely by speculative actions that entails a high risk of loss of value."

That last point was certainly proven this week, when news of Mt.Gox's withdrawals problem sent the real-world value of a single Bitcoin – which had been stable at more than $900 for some time – into a nosedive that bottomed out at $660 before recovering slightly to around $760. ®

New hybrid storage solutions

More from The Register

next story
JINGS! Microsoft Bing called Scots indyref RIGHT!
Redmond sporran metrics get one in the ten ring
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Found inside ISIS terror chap's laptop: CELINE DION tunes
REPORT: Stash of terrorist material found in Syria Dell box
OECD lashes out at tax avoiding globocorps' location-flipping antics
You hear that, Amazon, Google, Microsoft et al?
Show us your Five-Eyes SECRETS says Privacy International
Refusal to disclose GCHQ canteen menus and prices triggers Euro Human Rights Court action
prev story

Whitepapers

Providing a secure and efficient Helpdesk
A single remote control platform for user support is be key to providing an efficient helpdesk. Retain full control over the way in which screen and keystroke data is transmitted.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Security and trust: The backbone of doing business over the internet
Explores the current state of website security and the contributions Symantec is making to help organizations protect critical data and build trust with customers.