Leaked documents allege closure, rebranding of Bitcoin exchange MtGOX

For weeks, popular Bitcoin exchange MtGOX has been embroiled in scandal. On February 7th, the exchange announced that they were halting all withdrawals due to "a bug in the Bitcoin software", a situation which, nearly 3 weeks later, still hasn't been resolved. After a number of recent actions by the exchange, including the deletion of their tweets and the suspension of trading on their site, it seems as if MtGOX is shaping up to shut down. But this may not be MtGOX's swan song: leaked documents seem to show an internal 'crisis strategy' that details a potential restructuring and rebranding plan.

If the outrage over withdrawal suspension isn't enough, users across several popular Bitcoin forums accused MtGOX of insider trading, an allegation which served to compound the massive controversy already faced by the exchange.

Now, it seems as if MtGOX is leaving town. Earlier today, MtGOX CEO Mark Karpeles announced his resignation from the Bitcoin Foundation, a charitable foundation dedicated to "standardizing, protecting and promoting the use of Bitcoin for the benefit of users worldwide". Shortly after, the MtGOX Twitter account deleted all of their tweets. And while many have speculated as to why this may be the case, the final nail in the coffin seems to be the closure of MtGOX's website. At current, the site is still up and running but shows a completely blank page.

A screenshot of MtGOX's "buy and sell" page before the site was taken down, showing that the exchange has suspended all trades.

All of this adds up to what seems to be MtGOX's departure from the Bitcoin market. With their CEO's resignation from the Bitcoin Foundation, as well as the deletion of their social media accounts and the suspension of trading on their website, MtGOX looks to have finally succumbed to the pressure.

However, these recent actions may not mean an end for the exchange after all. According to purportedly leaked documents, the company plans to 'rebrand, restructure and redesign' as an entirely new exchange, simply called 'Gox'. 

The documents also noted a few more details about the potential restructuring, amongst which are the resignation of current CEO Mark Karpeles and the introduction of new developers to the exchange. Not all details were positive, however: In an attempt to express the severity of the current situation, the documents state that "744,408 BTC are missing due to malleability-related theft which went unnoted for several years". At current trade values of $240/BTC, this figure shows a loss of nearly $180 million worth of Bitcoins.

The story is still breaking, but by all accounts the leaked documents seem entirely legitimate and the recent deletion of MtGOX's Twitter and the closure of their website only seems to support this theory of "restructuring". 

This article will be updated as more info arises.

Source: Leaked documents via ScribdImage via Google

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34 Comments

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frett said,
..."shows a loss of nearly $180 million worth of Bitcoins."

Isn't the plural of Bitcoin--Bitcoin?

No... it is either Coinage or Coins. Do you have a hand full of coins or a hand full of coin?

The source code for their website shows "put announce for mtgox acq here ". Is it possible that an Acquisition Announcement is forthcoming?

BTC is a dream for people who can't make real money and they hang on to it like it's the "future" to make up for their failures. Either criminals or hardcore keyboard warriors are strongly backing the "digital money".

It's just that dream of getting rich over night.

Then explain why Russia (which loathes that the US dollar is the current world global reserve currency) has outlawed Bitcoin, and has made plain that all other cryptocurrency is headed for the banhammering as well. Russia wants a global currency it can control - a true global currency can't be under the sovereignty of ANY nation, thoroughly undercutting the Russian position; also, the US dollar didn't get to the position it is in by design.

PGHammer said,
Then explain why Russia (which loathes that the US dollar is the current world global reserve currency) has outlawed Bitcoin, and has made plain that all other cryptocurrency is headed for the banhammering as well. Russia wants a global currency it can control - a true global currency can't be under the sovereignty of ANY nation, thoroughly undercutting the Russian position; also, the US dollar didn't get to the position it is in by design.

Because they have enough hackers that can take the pi$$ out of honest people's earnings should they be converted into webmoney and don't want to be involved with such scandals.

SiCKX said,
BTC is a dream for people who can't make real money and they hang on to it like it's the "future" to make up for their failures. Either criminals or hardcore keyboard warriors are strongly backing the "digital money".

It's just that dream of getting rich over night.

Another person that misses the point entirely and/or is bitter because they didn't get in early.
The point of a crypto currency is not to 'Get rich quickly', admittedly a few did make a tidy profit, the point is to provide a means to store and use a decentralised currency on the internet. It IS the currency of the web full stop.

Is this the first of several bubbles that could well burst? Hyped up to the hilt for what is basically something from thin air...

It may be thin air but is normally associated with a product or service (never mind government). What if your boss (or customers) said i`ll pay you in BitCoins this next year, would you be happy

It amazes me that a “currency” favoured by the criminal underworld could be so liable to hacks, theft and fraud.

Any sensible person would certainly expect that their money is completely safe and will retain or increase its value over time in this straight forward, easy to understand and ultimately secure platform.


Bitcoin is a scam. It always has been. It is a confidence trick and I can't believe so many people are ‘buying' into it.

BItcoins - in fact ALL cryptocurrency - without exception - is an artificial commodity. Remember, all the artificial currencies - bitcoin included - start with a finite supply. The issue is - like all finite-supply commodities - the finite supply commodity is subject to all the same things that affect all other constrained commodities, including manipulation and outright pilferage. Such manipulation is actually easier with cryptocurrencies than it is with known finite-supply fungible commodities (such as gold, silver, titanium - even corn, wheat, and coffee) simply because humans are in the loop throughout the entire process at the repositories and the exchanges. Mt. Gox (the exchange itself) may be largely blameless - however, it has a rather large target on its back - does anyone really think that the global central banks of fiat-currency nations (all of the national central banks), let alone the more traditional commodity exchanges, are going to take the threat - real or imagined - that cryptocurrencies are lying down?

"In an attempt to express the severity of the current situation, the documents state that "744,408 BTC are missing due to malleability-related theft which went unnoted for several years" - a figure which, at current trade values of $240/BTC, shows a loss of nearly $180 million worth of Bitcoins."

"Woops.. we accidentally lost $180 million worth of Bitcoins. We promise you, that we had nothing to do with it."

if people want online currency, they should be looking more towards the newer coins rather than bitcoin. Coins like digibyte which are run by people who actually know what they're doing

I don't think it's rebranding. I think from the start Bitcoin is just Amway dressed up differently. It's a pyramid. I think Gox wanted to run a real exchange... but that cannot be done when the currency is itself flawed.

The other issue is: Why do you need a different currency? I can't walk into Sheetz with Bitcoins and buy cigarettes. So what the eff would I want Bitcoins for?

Don't forget to blame Obama when your pretend money becomes worthless. And it will become worthless. You may need more guns and ammo. You see, paranoid and insane people that are trying to profit from the greed of others makes sane people run away. That is what REALLY seems to be going on here: More guns, more ammo, more MREs, and put all our money in Bitcoins. Because the United States could collapse at any moment. Or 3 + 2 = 29. Whichever is stupider. Your mileage may vary.

Or it may be the Illuminati. I'm not sure.

Can you see why the rest of us don't take Bitcoin seriously?

MikeChipshop said,

The currency isn't flawed.


It is completely flawed, it's a pyramid scheme, it isn't anywhere near as anonymous as it makes out to be and it has huge exploits that have been used against exchanges and sites using the currency in the past few months.
What exactly do you think makes it 'not flawed'?

n_K said,

It is completely flawed, it's a pyramid scheme, it isn't anywhere near as anonymous as it makes out to be and it has huge exploits that have been used against exchanges and sites using the currency in the past few months.
What exactly do you think makes it 'not flawed'?

You're completely missing the point of a decentralized crypto currency. Just like all the naysayers, you've read "Pyramid Scheme" somewhere and now wrongly applied it.

For something that's nothing but a pyramid scheme, governments and financial organisations are falling over themselves to cash in / legitimise / ban.

What it comes down to is the need for a universal on-line currency to remove our dependence on the real criminals, like PayPal. Heck, HTML already has the means to handle crypto currencies and always has done.

n_K said,

It is completely flawed, it's a pyramid scheme

You clearly don't understand what a pyramid scheme is. You don't recruit people to get bitcoins.

Thrackerzod said,

You clearly don't understand what a pyramid scheme is. You don't recruit people to get bitcoins.


You clearly don't understand what a pyramid scheme is. Creators start mining it before everyone else, accumulate a lot (easy in the beginning). Then you get more and more people to join in, it gets exponentially harder to mine and thus people get less and less for using more and more power... Oh, the value suddenly rises and suddenly your bitcoin collection is worth millions...
So yes, it IS a pyramid scheme, no ifs no buts, just a plain old pyramid scheme.

n_K said,

You clearly don't understand what a pyramid scheme is. Creators start mining it before everyone else, accumulate a lot (easy in the beginning). Then you get more and more people to join in, it gets exponentially harder to mine and thus people get less and less for using more and more power... Oh, the value suddenly rises and suddenly your bitcoin collection is worth millions...
So yes, it IS a pyramid scheme, no ifs no buts, just a plain old pyramid scheme.

We're talking about Bitcoin though, not one of these scammy premined altcoins like Pandacoin that seem to come out every other day. Bitcoin wasn't premined; if it were it would show up on the blockchain which anyone can examine. In any case what you described is not a pyramid scheme. By your logic companies like Apple and Microsoft are pyramid schemes too since early investors got rich too.

n_K said,

So yes, it IS a pyramid scheme, no ifs no buts, just a plain old pyramid scheme.

No. It's not. But this is going to keep going round in circles so i'm out. Do some reading and really look in to what you just said.

n_K said,

it isn't anywhere near as anonymous as it makes out to be

I don't make it a habit of calling people idiots on the internet, but you deserve it. It's not anonymous? there is NO WAY you are able to tie "1CE7y7XmaKkRah1gNiufCeLSiGH3fVQuzb" to SirEvan. it doesn't get any more anonymous than that. When I send bitcoin to someone, I only see their key...that's it. Go troll somewhere else.

SirEvan said,

I don't make it a habit of calling people idiots on the internet, but you deserve it. It's not anonymous? there is NO WAY you are able to tie "1CE7y7XmaKkRah1gNiufCeLSiGH3fVQuzb" to SirEvan. it doesn't get any more anonymous than that. When I send bitcoin to someone, I only see their key...that's it. Go troll somewhere else.


Oh gosh so because you only see their key, that's all that's transmitted, none of your PC details or your IP address or anything, you know, data your ISP and the NSA stores and keeps track of you with...
Of course it's anonymous, you be daft enough to believe that if you want to.

n_K said,

Oh gosh so because you only see their key, that's all that's transmitted, none of your PC details or your IP address or anything, you know, data your ISP and the NSA stores and keeps track of you with...
Of course it's anonymous, you be daft enough to believe that if you want to.

More tinfoil for your hat...sir?

http://en.wikipedia.org/wiki/Bitcoin

No different than sharing something online over FTP, of course you can get an active ip address, point being that an address/transaction does NOT contain the senders IP or identifiable information. You can wireshark all day if you want.

They had to do all of this just for a rebranding? Good thing Microsoft didn't do this when they changed SkyDrive to OneDrive.

mastercoms said,
They had to do all of this just for a rebranding? Good thing Microsoft didn't do this when they changed SkyDrive to OneDrive.

Perhaps if SkyDrive had a super-terrible bug that allowed stealth data theft, that they just found after several years of exploitation, they might have.