Today at approximately 8pm CST (11am Japan), embattled and ailing MtGox suddenly halted all trading on their exchange.

Not long after, questions began to circulate about the potential insolvency of MtGox and the future of the company. In response, executives from Coinbase, Kraken, Bitstamp, BTC China, Blockchain.info, and Circle released a joint-statement decrying the insolvency of MtGox:

The purpose of this document is to summarize a joint statement to the Bitcoin community regarding the insolvency of Mt.Gox.

This tragic violation of the trust of users of Mt.Gox was the result of one company’s abhorrent actions and does not reflect the resilience or value of bitcoin and the digital currency industry. There are hundreds of trustworthy and responsible companies involved in bitcoin. These companies will continue to build the future of money by making bitcoin more secure and easy to use for consumers and merchants.  As with any new industry, there are certain bad actors that need to be weeded out, and that is what we are seeing today.

[Ed note: Shortly after going live, Coinbase updated the blog post to remove “insolvency” from the title and the body text. Blockchain.info has also done the same.]

Names amid the signatories of this joint-statement include Fred Ehrsam, Co-founder of Coinbase; Jesse Powell, CEO of Kraken; Nejc Kodrič, CEO of Bitstamp.net; Bobby Lee, CEO of BTC China; Nicolas Cary, CEO of Blockchain.info; and Jeremy Allaire, CEO of Circle. The same join-statement is published by Coinbase, Blockchain.info, and Circle.

In addition to the joint statement from the CEOs of the Bitcoin community, Blockchain.info also plans to issue a separate statement at 7AM ET.

Sean Percival, Venture Partner at 500 Startups and who also works closely with Blockchain.info in their marketing, spoke with SiliconAngle to give a statement.

“The Blockchain staff worked tirelessly to support Mt. Gox when they claimed they were having technical problems, demonstrating not only our commitment to the industry but also our good-faith belief that Mt. Gox was attempting to recover from their implementation problems,” said Percival. “At no point were any of us aware of the loss of customer funds.”

“The Blockchain staff will continue to work to re-establish the lost trust,” he continued. We will be collaborating with other industry leaders and by establishing better controls to ensure that events like this are not repeated.”

The tragic end of MtGox?

Sources close to the issue, in touch with SiliconAngle, have confirmed that more than 700,000 bitcoins are indeed missing from MtGox’s coffers as has been rumored during the history running up to this shutdown. Sources suggest that the loss is part of a long-term dwindling of funds caused by ongoing accounting errors or “slow leak.”

The BTC figure comes from a strange document from Scribd (largely unconfirmed, according to document metadata leaked by Ryan Selkis aka 2bitidiot, a noted Bitcoin entrepreneur) appearing in various places that cites a “Crisis Strategy Draft.” Since its release, the document has been dissected by numerous individuals. SiliconANGLE even has an un-redacted version of the blacked-out page available. The potential rebranding of Gox has been confirmed by Andy Booth selling Gox.com to MtGox’s parent company.

Mark Hopkins, SiliconANGLE founding editor, has been reaching out to developers and spokespeople involved with the Bitcoin Six consortium to get a better handle on the nature of the missing $500 MM.

“I think it’s interesting to note (and this is confirmed by people familiar with the matter) that the ‘theft’ is more of a ‘bank error in the users favor’ rather than an out and out theft,” said Hopkins. “The leak was long term, exacerbated by the run-up to 1200, and not to any single user or individual bad actor. Essentially, Gox had all their Bitcoin in what’s best described as a leaky bucket.”

Complicating the matter, we’re told, was the China-driven run-up to $1,200 / BTC last year.

“Their accounting was so shoddy that with the fast rise in price and incredible volume, things got hard, if not impossible, to track,” explained Hopkins.

The history of MtGox’s fall from the largest bitcoin-related exchange has been riddled with ups and downs, but lately the downs have simply kept getting steeper. Starting with the slow cut-off of USD withdrawals in 2013 and culminating in the sudden freeze of BTC withdrawals in early February. All this continuing while MtGox CEO Mark Karpeles blamed the failures on the Bitcoin protocol.

Most recently Karpeles resigned from the Bitcoin Foundation board of directors on Sunday, February 23rd.

“This will spell short term instability for the price of Bitcoin,” says Hopkins, “but the death of MtGox is ultimately good for the community and stability of the currency.”

MtGox vanishes in a puff of smoke

At approximately 9:40pm CST, MtGox became unavailable. The front page began to serve a blank document and links to previous press releases from the exchange display 404-like errors. Today also saw MtGox erase its entire Twitter history following the resignation of Karpeles from the Bitcoin Foundation board of directors.

We will be updating this post with information and quotes as we confirm them.

UPDATE Feb 24, 9:36pm CST: The joint-statement on Coinbase’s blog has been updated to remove “insolvency” from the title and body text; ‘abhorrent’ from the body text; changed ‘exchange’ to ‘service’; and several other changes.

UPDATE Feb 24, 9:46pm CST: MtGox is currently offline; not down, precisely, but returning blank pages and page-not-found like errors.

UPDATE Feb 24, 10:01pm CST: Updated with statement from Sean Percival.

UPDATE Feb 24, 10:54pm CST: MtGox headed for bankruptcy? A spokesperson connected to the Bitcoin executives joint-statement told Re/code, “Mt. Gox has confirmed it will file bankruptcy in private discussions with other members of the bitcoin community.”

UPDATE Feb 24, 11:25pm CST: Updated with further information on the MtGox missing BTC figure and the nature of the loss.

UPDATE Feb 24, 11:57pm CST: Un-redcated portion of “Crisis Draft,” from Rich Brumpton, SiliconANGLE reader, who got it via FoxIt Reader.

UPDATE Feb 25 12:04am CST: Erik Voorhees, co-founder of Coinapult and founder of SatoshiDice, posted moving words of declaration and preparation to the Bitcoin community on Reddit.