Bitcoin Price Declines Following Restrictions On Withdrawals By Mt. Gox

Bitcoin Price Declines Following Restrictions On Withdrawals By Mt. Gox

An announcement of an indefinite halt on withdrawals by Mt. Gox resulted to the lowest price level for the bitcoin in almost two months recently.

The price of the digital currency went down to $595.74, which is 14 percent lower than the $692 final price on Friday. Societe Generale currency strategists said the current issue is bigger than what was encountered in the past and the market may have recognized the issues specifically affecting these currencies.

Even as acceptance for the currency has increased, it also drew additional scrutiny as the top bank regulator of New York indicated that it aims to control business using the currency this year.

Mt. Gox announced last Friday that withdrawals will be placed on hold due to unexplained issues, which resulted to the decline in the bitcoin prices. By Monday, Mt. Gox revealed it detected unusual activity on the wallets of the digital currency and it will put withdrawals on hold indefinitely.

The digital marketplace revealed that transaction details may be modified due to a bug in the software. The bug will allow anyone on the network to change the details of transactions to make it appear that bitcoins were transferred even if no transfer actually occurred.

The users of the currency store the digital currency in the application wallet. Mt. Gox revealed that the suspension will be lifted only after a resolution is found on the issue.

Mt. Gox was removed from the CoinDesk Bitcoin Price Index last September after it reportedly failed to consistently meet the standards of the index. CoinDesk revealed that the restrictions on withdrawals are among the issues that would have made it difficult to include Mt. Gox in the index.

Although the price of the digital currency at the index of CoinDesk declined, it remained higher than the price reflected on Mt. Gox at $667.79.

The digital currency was highlighted with the arrest of Charlie Shrem, an operator of BitInstant. Shrem was charged with conspiracy to commit money laundering by US prosecutors. Following his arrest, the prominent advocate of the digital currency resigned from his position at the Bitcoin Foundation.

Posted by James Fried on Thursday February 13 2014, 2:52 AM EST. Ref: Reuters. Link. All trademarks acknowledged. Filed under Featured News, Finance. Comments and Trackbacks closed. Follow responses: RSS 2.0