Mt.Gox clients are hopeless about their bitcoins

March 26, 2014: 10:10 AM ET
mt gox beekeper
Nick French is a beekeeper in Colorado who sells honey for bitcoins. His account on the troubled Mt.Gox exchange shows he still has 5 BTC, but he doubts it's really there.
NEW YORK (CNNMoney)

The online Bitcoin exchange Mt.Gox is on life support, and the folks who put millions of dollars there don't expect to ever see their money again.

MtGox.com went from being the world's largest platform for buying and selling bitcoins to a digital currency graveyard. In recent weeks, it froze Bitcoin trading with little explanation, filed for bankruptcy and claimed "a weakness in our system." Last week, it let clients log in and view their account balance.

So far, it looks like all customers' bitcoins remain in their Mt.Gox accounts, according to interviews with several users. But they can't pull any of their money out.

Nick French, a beekeeper in Colorado who accepts bitcoins for his honey, logged in on Tuesday and sees he still has "5.00582 BTC" in his account, worth $2,898. There's no telling where that money resides, and there's no way to withdraw his funds, so there's no proof it's actually there.

Related: What is Bitcoin?

Mt.Gox's reluctance to say what has happened to an estimated 744,408 bitcoins -- valued today at $431 million -- doesn't help. Neither does the latest puzzling development: Mt.Gox announcing it suddenly found 200,000 bitcoins in an old, discarded digital wallet.

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"I don't trust them anymore," French said. "I don't know the whole story. I thought it was a hacking problem. Then 200,000 coins just show up somewhere? Come on. I don't believe it."

If he ever gets access to his money again, French says he'll pull it out immediately.

Related story: How Mt.Gox went down

James Kafka is a Bitcoin enthusiast in Lansdale, Penn., who thinks his 2 BTC on Mt.Gox are as good as lost. He feels the sting, because that's money he could have used to buy more computer equipment -- to hook up to the Bitcoin network and produce more of the digital currency in a process called "mining."

"I've already written it off in my head," Kafka said. "I don't have any faith in the people running that site to get it done, to fix the problem they created."

Others think Mt.Gox's decision to show users' account balances is just wrong. Jake Dearlove, a creative director at an advertising agency in London, checked his account last week and interpreted it as bait meant to string him along.

"I'm actually quite annoyed," Dearlove said. "It does seem odd to me that they'd go through this effort to update us. They must have some interest in keeping some kind of positive equity associated with the name. But it's obviously been heavily tarnished."

Although he only kept half a bitcoin there, presently worth $289, investors like Dearlove say that's not the point. The value of a Bitcoin has reached $1,100, and no one can say it won't reach that again. And the higher its value goes, the more money they've technically lost. Dearlove thinks it's an investment he won't ever see again.

"If I had to bet on it, probably not," he said. "I'm certainly not counting on it."


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