It was once the only serious bitcoin exchange on the internet. But now, just a year later, Japan's Mt. Gox is in shambles.

U.S. regulators have seized more than $5 million of the company's money. Customers report month-long delays in getting their U.S. dollars out of the exchange. And now a technical glitch has prevented the exchange from paying out in bitcoins too, effectively locking away customer assets until further notice.

Early Friday morning, Mt. Gox said it needed to suspend Bitcoin payouts in order to fix a technical glitch in its trading platform. The company promised an update on Monday, but didn't explain exactly what the issue was. Over the past week, complaints about Mt. Gox's bitcoin payout problems have grown louder as the queue of unfulfilled withdrawals has grown longer and longer.

The company's situation shows that some of the earliest businesses to embrace the bitcoin digital currency are now struggling to adapt now that the technology is moving into the mainstream. As more and more people use bitcoin – and regulators begin to take notice – an outfit like Mt. Gox, which is run by computer geeks, not financial experts, has a tough row to hoe.

>'It seems very likely to me that for some reason Mark Karpeles is not able to work on his codebase anymore, and isn't able to resolve bugs in a timely manner, leaving his support staff to try and clean up the mess by making horrible hacks' Mike Hearn

Over the past year, Mt. Gox has lost its position as the world's top bitcoin exchange to new players such as Bitstamp and BTC-China, but the Gox crash is still a big black-eye for bitcoin. Mt. Gox CEO is a board member of the Bitcoin Foundation, a non-profit advocacy group that promotes the digital currency.

It's a sign of a changing of the guard in the bitcoin world, as old players are being elbowed out by new more professional companies. In the United States, the easiest way to buy and sell bitcoins is through a company called Coinbase. They're backed by well-heeled venture capitalist firm Andreessen Horowitz. Another company, called Buttercoin is expected to launch soon. They're building open-source bitcoin exchange software.

Glitch or Liquidity Crisis? —————————

Although bitcoin's price initially dropped more than $100 – to below $700 – Friday morning on fears of a Gox liquidity crisis, trades started edging back up later in the day on speculation that the problems are really due to a technical glitch, and not a lack of bitcoins.

"It seems very likely to me that for some reason Mark [Karpeles] is not able to work on his codebase anymore, and isn't able to resolve bugs in a timely manner, leaving his support staff to try and clean up the mess by making horrible hacks like "throw away and retry later'," wrote Mike Hearn, a respected Bitcoin developer on a Bitcoin Foundation discussion forum "The question in my mind then becomes - where is Mark and what is he doing?"

One Redditor says he flew from Australia to Japan in an attempt to withdraw his bitcoins. He met Karpeles in front of the Gox office, but never got his money back. Mt. Gox does not typically respond to media inquiries, and it did not reply to an email seeking comment for this story.