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Summary:

Bitcoin’s exchange mecca Mt. Gox is running into mounting troubles with phishing, the feds, and just keeping the lights on. But despite those problems, Bitcoin prices are holding firm.

bitcoin

Practically everyone who is interested in the buzzy digital currency Bitcoin trades at Mt. Gox. It handles more than half of all Bitcoin’s transactions, with roughly $144 million in USD filtering through the system right now, according to Bitcoin Charts.

But Mt. Gox is under increasing legal, federal and technological pressure that appears to be causing traders to lose some faith in the website, as trading volumes on Mt. Gox are slipping.

In the latest development, Symantec researchers discovered that a group of hackers had spoofed the Mt. Gox site and duped users into downloading harmful malware onto their computers — another in a series of attacks aimed at harassing Mt. Gox and some of its users (and perhaps stealing some Bitcoins in the process). A string of malicious DDoS attacks throughout 2013 have caused the website to even shut down a few times to stabilize the currency.

Mt. Gox has also faced legal heat. The website has introduced tighter verification regulations on non-Bitcoin trades, according to Forbes, in order to separate itself from recently shuttered trading website Liberty Reserve (indicted for participating in $6 billion worth of money laundering) and intermediary Mutum Sigellum (seized by Homeland Security for failing to register as a money transmitter). On top of that, Mt. Gox has been hit with a $75 million lawsuit, according to Gawker, by Bitcoin portal CoinLab, after a partnership went sour.

Interestingly, the Bitcoin exchange rate has remained steady throughout it all. The currency has other places to go, and in the  event that Mt. Gox doesn’t make it (and there is a growing amount of chatter about that possibility), a new trading post will rise from its ashes.

Currently, 11 different exchanges manage Bitcoin transactions, with the second largest, BitStamp, handling more than $27 million in trades. As unstable as Mt. Gox may get, that escape route is a sign that Bitcoin has outgrown its original trading arena.

  1. I tried to get my usd/btc out of mt gox right as the man shut down Mutum Sigillum transactions. OKPay, Dwolla, AurumXchange all turned out to be non-starters. I transfered my btc to Coinbase (a US based exchange, currently in beta, but you’d never know it). Everything is running really smoothly for me to the extent that I may continue to work with btc. I was losing faith when I thought that I’d never see my money again. Coinbase offers 2-point authentication, direct deposit to/from from any major bank. I will disclose that I don’t use bitcoin anonymously and have no desire to do so. I’m not sure if coinbase is the best option for anonymous trading or tax dodging.
    https://coinbase.com/about

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  2. People with dwolla accounts should check out campbx, it’s us based, properly registered with finCEN, and handles dwolla deposits and withdrawals from their exchange. Also Btc deposits only require 6 confirmations

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    1. and they charge an arm and a leg.

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  3. Wire transfers work great to and from Mt Gox, even after the DHS seizure last month. It takes a couple days longer and there are about $25 in fees, but it still works.

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  4. Bitcoin’s now on @tradingview https://www.tradingview.com/e/?symbol=MTGOX%3ABTCUSD# – free charts

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  5. “…causing traders to lose some faith”

    Maybe that’s why BTC has lost 10% of its value today…

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  6. Jeremy B Bowers Friday, June 7, 2013

    The sooner we get rid of these greedy money exchangers the better. We need to stop using Bitcoins as a “get rich quick” commodity and go back to its original purpose…to buy and sell goods. The government cannot regulate Bitcoin so we need to keep it that way.

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    1. Absolutely! The *ONLY* way Bitcoin is going to be a long-term success is for it to become its own currency. As long as people labor under the mindset “how many USD is it worth” the Feds are going to have a choke hold on the Bitcoin market.

      I encourage everyone to do a simple search for local shops accepting Bitcoin, and/or use sites like bitcoinstore.com to buy real world goods with their Bitcoins.

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  7. Mark Sabbai Monday, June 10, 2013

    Great article!
    – bitcoinsky.com

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