Mt. Gox customers despair as millions of dollars in BTC withdrawals fail or disappear

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The most asked question these days seems to be “what is really going on at Mt. Gox?”. The Japan-based cryptocurrency exchange has been having problems with transactions and withdrawals over the last few days, which are now affecting hundreds of customers.

Once the biggest exchange in the Bitcoin ecosystem, Mt. Gox currently occupies the third position in the podium, but this chain of events could ultimately ruin what is now left of its reputation. Since the last days of January, the clients’ Bitcoin withdrawals have left their accounts, but most of them never received the money.

In some cases the exchange informed the clients that the transactions failed, but the word “disappearance” is also being used to describe what is happening to the withdrawn BTC. According to Rick Falkvinge, Pirate Party’s founder, who wrote about the matter in his blog, Mt. Gox has so far amassed more than $38 million in over 41,000 unfulfilled withdrawals.

Several problems have been affecting the exchange during the last year. In mid-2013, for example, Mt. Gox suffered the action of the United States federal authorities, but this problem seems to be bigger than any legal action or authority repression. According to the clients’ online reactions, the exchange is not being honest and ignoring all complaints through its lazy customer service.

While a few clients have managed to get their BTC out from Mt. Gox, others are already getting used to the idea of losing their BTC savings. These are just some of the comments you can find on Reddit:

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An update published this Tuesday (4) by Mt. Gox claims admits the problems, but blames a technical issue: “we are currently experiencing a problem where some Bitcoin withdrawals are not being transferred correctly, affecting a limited number of users. Currently the problem is being fixed, but many previous transactions did not go through over the past days. Those transactions have now been returned to customer accounts in full, so any transactions that appeared to be ‘stuck’ should now be refunded. This problem applies primarily to larger transactions, so we appreciate your patience as we fix the issue. Smaller transactions should be fine in the meantime”.

But many clients are not convinced.

“Not wanting to spread fear and anxiety in the Bitcoin world, but on reading today’s statement by MtGox I am lead to think that the problem with Mt. Gox completing withdrawal requests/transactions is not because of computer technical issues as they try to say in the first part of their statement”, the Redditor ‘SmartMetric’ wrote.

Reading down to the end of their statement they say the following: “this problem applies primarily to larger transactions, so we appreciate your patience as we fix the issue. Smaller transactions should be fine in the meantime, and we will update you on the status as soon as possible”. Logic screams that this is not a case of a computer system issue because if it was the size of the trade would not be a factor. Only being able to effect low value/quantity withdrawals points to a Bitcoin liquidity issue. Which raises more questions.

“I have learned to see when a company wants to explain what happens, and when they want to hide what happens. And while I have seen some people trying to find rational explanations to these latest MtGox problems, I am still to see any real action from MtGox to solve this. I can see excuses from them, but no real facts about why this happened or when it will be solved. It all just gives me flashbacks from the dot com bubble. Different company, same excuses”, another Redditor, this time ‘hildenborg’, wrote on the platform.

More than a week after the first signs of problem, Mt. Gox is still not doing anything visible to give the people their money back or speaking about the matter publicly. A new status update was promised anytime soon.

Image from Btcpedia.com

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Maria Santos

Maria is an experienced journalist currently living in the UK. She has been writing about Bitcoin and the altcoin universe since 2013. She is also a member of the Lifeboat Foundation's New Money Systems Board and a big cryptocurrency supporter.

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