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Mt. Gox Announces Temporary Hiatus on U.S. Dollar Withdrawals

Op-ed - Mt. Gox Announces Temporary Hiatus on U.S. Dollar Withdrawals

Yesterday, Mt. Gox released the following notice from Tokyo, Japan:

Statement Regarding Temporary Hiatus on U.S. Dollar Withdrawals

TOKYO – JAPAN – June 20th, 2013

Over the past weeks Mt. Gox has experienced rising volumes of deposits and withdrawals from established and upcoming markets interested in Bitcoin. This increased volume has made it difficult for our bank to process the transactions smoothly and within a timely manner, which has created unnecessary delays for our global customers. This is especially so for those in the United States who are requesting wire transfer withdrawals from their accounts.

We are currently making improvements to process withdrawals of United States Dollar (USD) denominations, and as a result are temporarily suspending cash withdrawals of USD for the next two weeks.

Please be reassured that USD deposits and transfers to Mt. Gox will remain unaffected, as will deposits and withdrawals in other currencies, and we will be resuming USD withdrawals once the process is completed.

We apologize for any inconvenience this causes our U.S. customers in the meantime, and look forward to resuming withdrawal service as well as debuting a dramatically improved trading engine which will be launching very soon.

Regards Mt.Gox Co. Ltd Team.

Mt. Gox serves as the world’s largest Bitcoin exchange and as of July 2011 has managed over 80 of Bitcoin trade. Founded in 2009 and operated by Japanese company Tibanne Ltc., Mt. Gox is registered by the Tokyo Chamber of Commerce. A surprise to many, the world’s largest Bitcoin exchange stands for, “Magic: The Gathering Online Exchange.” Despite it’s original purpose of exchange of Magic: The Gathering playing cards, Mt. Gox now is a force to be reckoned with in the Bitcoin community.

From yesterday’s press release, Mt. Gox leadership highlight that the temporary halt is intended to provide room for system improvements. Despite the clear inconvenience for Bitcoin users within the United States, one might see this as a positive sign as Mt. Gox has received an increased volume of deposits and withdrawals. There is evidently a growing interest in the Bitcoin currency and Mt. Gox’s system must be strengthened to handle the increased volume of money wires to and from the US. Additionally, with the May closure of the Dwolla account on Mt. Gox by the US Department of Homeland Security, Mt. Gox has dealt with an increased number of wire transfers to and from the US.

After a day of uncertainty for US Bitcoin users, Mt. Gox posted on Bitcoin Reddit and elaborated a bit on the purpose of the halt. Mt. Gox stated, “We are now working with new banks and alternative methods for transmitting money to our customers,” and “every customer’s funds are safe, sound, and accounted for.”

What does this mean for the Bitcoin community in the US? Bitcoin users will need to find other exchanges and possibly rely more heavily on peer to peer interaction. In essence, during this timeframe, Mt. Gox will attempt to improve the USD withdrawal transaction system. The halt is expected to continue for about two weeks and during that time Mt. Gox will continue to authorize withdrawals and deposits in other denominations. Time will tell, whether or not Mt. Gox will maintain its position of prominence in the Bitcoin community, but to date the the Tokyo based exchange still maintains a position of prominence.