Bitcoin value plunges on Japanese exchange
By Hiroshi Hiyama AFPTOKYO--The value of Bitcoin on a Tokyo exchange was less than half that on other platforms Wednesday, two weeks after it suspended withdrawals claiming a bug in the software that underpins the virtual currency.
February 20, 2014, 12:20 am TWN
MtGox, one of the world's oldest Bitcoin exchanges, this month stopped processing client requests to withdraw money held at its “wallet,” citing a problem with the technology.
On Wednesday afternoon a single Bitcoin at MtGox stood around US$286 while other exchanges around the world were offering more than US$600. In January a Bitcoin was worth over US$900 at the Tokyo exchange.
Bitcoin is at the leading edge of the nascent crypto-currency movement. It is based on an open-source computer code designed by an anonymous person or people five years ago.
Unlike fiat currencies like the dollar or the euro, the Bitcoin is not backed by a central bank or a government, but depends on cryptography to control the creation and transfer of money.
MtGox, which began life as a trading card exchange late last decade, was one of the first online exchanges for Bitcoin and has grown quickly to become one of the world's largest repositories.
In a release, it said a glitch in the open-source software that powers the unit makes it possible for users “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.”
This would allow someone to purchase a single unit and then to claim that it had never been received, which may then result in another Bitcoin being sent or a refund being given, the company said.
“We apologize for the inconvenience caused by the recent suspension of external Bitcoin transfers,” the company said in a separate statement dated Monday.
Transactions are still permitted between users on MtGox, but not to a third party. It is also possible to exchange Bitcoins for real-world currencies, including U.S. dollars and Japanese yen.
However, the price appeared to have been undercut by a loss of faith in the exchange.