Largest Bitcoin Exchange Halts U.S. Dollar Withdrawals

June 23, 2013 Leave a comment

June 21, 2013, 11:01 a.m. ET

Largest Bitcoin Exchange Halts U.S. Dollar Withdrawals

Mt. Gox, the world’s largest bitcoin trading exchange, said it has halted withdrawals of customer funds in U.S. dollars as it makes systems improvements.

The Tokyo-based exchange said on its website Thursday that cash withdrawals in U.S. dollars are suspended while it makes the upgrades amid rising customer use.“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,” the notice said.

Mt. Gox said in the notice that it has experienced an increase in deposits and withdrawals in recent weeks from “established and upcoming markets interested” inbitcoin.

“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,” the company said. “This is especially so for those in the United States who are requesting wire transfer withdrawals from their accounts.”

Mt. Gox did not immediately respond to a Friday request for comment.

The price of one bitcoin, which has fluctuated widely in recent months, was trading around $107 on Friday, according to bitcoincharts.com. The virtual currency hit an all-time intraday high of $266 in April.

The suspension of withdrawals is the latest hiccup for Mt. Gox, which has gained attraction amid rising interest in bitcoin, a so-called virtual currency that can be bought and sold online.

The currency, and others like it, has attracted a variety of investors amid turmoil in global economic markets. Some merchants also like bitcoin because they say the virtual currency is cheaper to accept than credit and debit cards, which carry transaction fees.

But virtual currencies have also drawn scrutiny from regulators, who worry about their use in illegal activities such as money laundering and drug trafficking.

In March, the U.S. Treasury Department said bitcoin must follow the same rules as money transmitters, such as Western Union Co. and MoneyGram International Inc MGI +5.94% . Those rules require the companies to collect customer information to monitor for illegal activity.

In May, U.S. officials moved to seize a bank account of a subsidiary of Mt. Gox for failing to get a license to operate as a “money-services business.”

Mt. Gox last month said it was strengthening its identification procedures for customers who deposit or withdraw traditional currencies from the exchange.

Filed under Macro Trends

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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