Business

Bitcoin companies throw leading exchange Mt. Gox under the bus with joint statement

Above: A pile of Bitcoins.

Image Credit: Antanacoins/Flickr

After sustaining a rumored $350 million hack and going offline, Mt. Gox has new problems.

In a joint statement released by CoinbaseKrakenBitstamp.netCircle, and BTC China, the five competing exchanges have called Mt. Gox’s “abhorrent actions” a “tragic violation of the trust.”

The group accuses Mt.Gox of being a “bad actor” and not maintaining “appropriate security safeguards…as a financial services provider.”

Acting as a custodian should require a high-bar, including appropriate security safeguards that are independently audited and tested on a regular basis, adequate balance sheets and reserves as commercial entities, transparent and accountable customer disclosures, and clear policies to not use customer assets for proprietary trading or for margin loans in leveraged trading. It does not appear to any of us that MtGox followed any these essential requirements.

When the joint statement was first released, the group cited the “insolvency” of Mt. Gox. The term was later removed in a stealthy revision.

This news comes two days after Mt. Gox’s move to resign from the board of the Bitcoin Foundation — an organization it helped found.


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