Bitcoin Forum

Largest Bitcoin Exchange Halts U.S. Dollar Withdrawals

http://online.wsj.com/article/SB10001424127887323393804578559364260264812.html

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" 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," 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 +5.45% . 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.