The chief executive of Bitcoin exchange MtGox, Mark Karpeles, has quit the board of the Bitcoin Foundation, which oversees and develops Bitcoin software.
It comes shortly after MtGox halted transfers of the digital currency to external addresses after it spotted what it called “unusual activity”.
The halt resulted in a sharp decline in the value of Bitcoins.
Last week, MtGox — one of the largest Bitcoin exchanges — said customers should be able withdraw funds “soon”.
Meanwhile, all tweets on MtGox’s Twitter account have also been deleted.
The Bitcoin Foundation said that Mr Karpeles’s resignation would be “effective immediately”.
It is the foundation’s second high-profile resignation in the past month.
Another board member, Charles Shrem, stepped down in late January after being arrested and charged with money laundering in connection with his Bitcoin company.
Mr Shrem, the chief executive of New York-based Bitcoin exchange BitInstant, has pleaded not guilty.
Dispute
The issues with MtGox had sparked a dispute between the exchange and the Bitcoin Foundation.
The Tokyo-based firm said that its investigation into the unusual activity revealed a loophole that could be exploited to fool the transaction process into sending double the correct number of Bitcoins.
It also left it vulnerable to attacks, which slowed down the rate at which coins could be bought and sold.
As it halted the withdrawals, MtGox had suggested that a flaw in the virtual currency’s underlying software was to blame for the problem.
“A bug in the Bitcoin software makes it possible for someone to use the Bitcoin network to alter transaction details to make it seem like a sending of Bitcoins to a Bitcoin wallet did not occur when in fact it did occur,” it had said in a statement.
“Since the transaction appears as if it has not proceeded correctly, the Bitcoins may be resent.”
However, Gavin Andresen, chief scientist at the Bitcoin Foundation, denied the problem was its fault.
“The issues that MtGox has been experiencing are due to an unfortunate interaction between MtGox’s highly customised wallet software, their customer support procedures, and an obscure (but long-known) quirk in the way transactions are identified and not due to a flaw in the Bitcoin protocol,” he told the BBC earlier this month.
Mark Karpelès, chief executive officer of Mt. Gox, the embattled Tokyo-based bitcoin exchange, resigned on Sunday from the board of the Bitcoin Foundation, according to a person familiar with the situation.The Bitcoin Foundation confirmed in a statement on its website that Mt. Gox had resigned its board seat and thanked Mt. Gox for its efforts in launching the group.
The move comes amid a string of long-standing technical issues that began last summer when Mt. Gox halted customer withdrawals in U.S. dollars.
The problems became more severe earlier this month when Mt. Gox halted all customer withdrawals, saying that a bug in the software for bitcoin allowed some users to alter transactions. The problems prompted CoinDesk to remove Mt. Gox from its bitcoin-pricing index earlier this month. The exchange told customers last week that it was still working on “reinitiating” bitcoin withdrawals. Mt. Gox is one of several industry representatives on the board of the foundation, a trade organization that advocates for the virtual currency.
Many investors in the bitcoin community had called for the resignation of Mr. Karpelès from the board of the Bitcoin Foundation, including a British-based marketing consultant who has posted an online petition calling for Mr. Karpelès’s removal.
A phone call to Mt. Gox’s office in Tokyo rang unanswered.
It is the foundation’s second high-profile resignation in the past month. Board member Charles Shrem stepped down in late January after being arrested and charged with money laundering in connection with his bitcoin company. Mr. Shrem has pleaded not guilty.
Mt. Gox bitcoins traded at around $191 in midday Monday trading in Tokyo, while the Coindesk index bitcoin traded at around $578.
The “discount at Mt Gox reflects the markets ongoing belief that bankruptcy is a high possibility,” said Mark T. Williams, who teaches finance at Boston University in an email on Friday. “They have a considerable customer base that remains prevented from getting their money out,” said Mr. Williams, who has expressed skepticism about bitcoin.
Eric Bosma, a 60-year-old part-time health-care worker from Mission, British Columbia, said he has been trading bitcoins for the past six months to try to earn some extra income, but hasn’t been able to withdraw his about 5.25 bitcoin in Mt. Gox despite repeated attempts. “I have contacted Mt. Gox many, many times in the past two weeks and all I get is what seems to be bot emails,” he said in an email. “All I want is my bitcoin back.”
source: http://online.wsj.com/news/articles/SB10001424052702303426304579401883794330454?mg=reno64-wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB10001424052702303426304579401883794330454.html & http://www.bbc.co.uk/news/technology-26319247
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