Same here. The statement that got me was "The reality is that MtGox can go bankrupt at any moment, and certainly deserves to as a company." That is no way to start out a slide show that says there is still hope for recovery from this mess.
Given the volatility of btc and the 'Gox' situation, it certainly wouldn't be too out of the question that someone is pushing false info to drive the Gox BTC => BTC trade prices down, but unfortunately I feel as if this might be legit
What would you have expected them to have done if they had noticed but the people who noticed were netting millions of dollars a year? Sacrifice all that money or ride the gravy train to the end of the line?
Suppose they figured it out three or four months ago that all their bitcoins were gone, what would have made things better? Suppose they figured they'd commit a small fraud two years ago before bitcoin took off, when were they supposed to come clean?
People are building supercomputers to mine bitcoins. The whole idea of bitcoin is as rational as Easter Island totems but organized religion is probably a better analogy.
Then to shame with all of the other actors in the industry. It is not unreasonable to expect your financial counterparties to subject themselves to audit. There are a lot of heavy bats in the Bitcoin community. If MtGox wouldn't consent to the same level of auditing any normal publicly traded US company is subject to (to say nothing of financial institution) then say so publicly and refuse to do business.
The amount of lost BTC is in the hundreds of millions of dollars. I personally cannot believe it possible that this is not an insider job. I admit, I've traded on MtGox (speculation in 2011) but things were different back then and I never had my own wallet. My assumption is that it would be trivial to run DAILY reporting that verifies the amount of BTC you think you have on deposit with what you actually do. This is banking 101 and the ONLY way to ensure there is not a bug in your transaction handling.
You are right brudgers that you cannot necessarily expect somebody to police themselves. But Coinbase. Winklevosses. Etc. I'm looking at you. These guys are CLEARLY crooks and have been all along and you let yourselves get snowed.
It'd be easier to believe an insider embezzlement, or deep hack/physical-heist by outsiders, that took all cold-wallet funds in one go. A gradual drain would have given so many chances to notice, mitigate, or correct.
The update date on that and this document recommending an insane and utterly ineffectual rebrand caused me to revise my opinion of its accuracy from "Oh please, nobody, not even Gox, is that stupid" to "I think today will be a very interesting news day."
> You have reached this page because you are using an older browser or are accessing this site via a browser that does NOT support virtual hosts (AOL's browser does NOT). You should upgrade your web browser to one of the following
> Netscape Navigator (v.2 or later), Microsoft Internet Explorer (v.2 or later) or Spry Mosaic (v.2 or later).
Anyone can register a domain name and list whatever contact information they want, right? The money made through manipulating the market would certainly outweigh the cost of a 3 letter domain name.
However, MtGox also suspended trading at the same time the document was released, which adds to the likelihood the it is real.
Yes, but that is not informative. Without speculating on the current topic, the person who controls the domain sets both the registrant and the nameservers.
Hmmm I still think it is a hoax, and a way for someone intelligent to earn a lot of money by manipulating bitcoin prices... The release in April 1st? Domain registered hours ago? Algo mtgox.com is registered in 1api. I don't see why they would switch registrars only for this, and there is a post in Mark Karpeles' blog accusing GoDaddy of shitty security practices: http://blog.magicaltux.net/tag/godaddy/
Also, if I were on that situation and soundly advised I wouldn't touch a US based registrar for my new domain even with a 10 foot Bitpole.
Of course, its a three letter domain name, it has been transfered. Someone transfered it today, I'm saying that person is not Mark Karpeles because he is using GoDaddy.
Maybe the domain was already with GoDaddy, and an inter-client push was just faster? I've taken domains at registrars I'd rather not use to ease things for the other party.
All the Whois details for gox.com point to Mark, including contact information and email. So if someone went through the trouble of buying a 3 letter domain to sway the market somehow, and made it look like it was now owned by Mark, they have effectively given the domain to mark as he could simply call up godaddy and use the details of the whois (his email, phone) to obtain full control.
I'm not convinced this is real, and I happen to think that MtGox is going to go bankrupt. But this doesn't smell right to me.
If it's a hoax, then it's well done. I would guess it's something done by an investment banker who knows how to write documents up like this. But the write up is far too melodramatic for me to believe this was written by someone actually involved in the situation.
"At the risk of appearing hyperbolic, this could be the end of Bitcoin, at least for most of the public."
"This isn’t about saving MtGox anymore."
Why is there only a single line on preventing a run on MtGox? That to me would be the most pressing issue once MtGox opened up the floodgates.
Not only does it put a bigger focus on bitcoin as whole than MtGox, it is extremely negative about the company. I don't know what the intended audience for this is but it wouldn't do a good job of selling the company as a good investment or as good rallying cry for the troops. It reads like it was written by someone who believes in BTC but was burned by MtGox.
It also uses "robbery" in a really unbusiness-like way. Still, there's only a few things here and there that are kind of out-of-line, and might be of the sort I'd expect for a intended-to-be-internal document.
But Mt. Gox isn't a business. It's an unregulated exchange, so there's really no point in taking for granted that they would meet some standard of professionalism which by definition they don't have to.
It most certainly is a business. They have employees, charge fees, and make a profit (or are supposed to). Exchanges are businesses, and MtGox is most certainly both an exchange and a business.
Fair enough I guess, but I could have an office with a secretary at the front desk and charge people money to extract their teeth, yet that wouldn't actually make me a dentist.
I meant Mt.Gox isn't a business in the sense that businesses, typically, have regulatory frameworks they have to follow, and standards to meet. Particularly when they deal with currency.
Maybe I should have said there's no reason to expect them to act like professionals.
I could have an office with a secretary at the front desk and charge people money to extract their teeth, yet that wouldn't actually make me a dentist.
The document states their USD assets are $22.5M liquid and $10.5M seized/locked ($33M total) and USD liabilities of $55M.
How is this $22M deficit possible when the balance sheet on page 8 (look for the non-redacted version in this thread) shows a positive income for both the 2012 and 2013 fiscal years?
They gain transaction fees on both sides of the trade, half in USD/etc and half in Bitcoin. It is possible that they valued their Bitcoin at e.g. market for the purpose of preparing the accounting reports, but did not actually sell it on their own exchange or otherwise. It was, therefore, part of the 120,000 they report as owing themselves, which (if you believe the document) was looted along with the bulk of customers' coins.
It's melodramatic because it sounds like it was authored by, not MtGox, but an in-the-know bitcoin stakeholder who needs to convince other probably reluctant big stakeholders to help bail out MtGox.
I'm reminded of the Federal Reserve calling in every major Wall Street bank CEO and demanding that they chip in to help rescue the imploding hedge fund Long Term Capital Management, lest it take down the entire market.
If I had any BTC, I'd be cashing out right the hell now. This doesn't bode well for the short term future of bitcoin. Long term, it might overcome it, but I wouldn't take that bet right now.
Check the plummeting price, down to $488 and sinking.
Long term it will of course overcome, MtGox was no longer the big market mover it used to be. Their constant incompetence no longer 'goxed' the price like it once did on a regular basis when they were the only major option if it did BTC would be worth pennies again like back in 2011.
Longterm things like colored coins are looking good for Bitcoin, plus exchanges not run by complete assclowns
I may have just overlooked it since I am reading on a small screen, but I don't see anything in there that said anything about the legitimacy of the leaked document. This could just be a general statement on the Gox situation.
That this could be a ruse (and judging from the prices on Coinbase, a persuasive one) points out the law, the distribution of news, the reporting of news, and the technological systems around Bitcoin are so, so primativ
He has to be hyperbolic, he is asking for a huge favor. He is asking that bitcoin owners essentially donate coins to mt gox in order for them to clear their losses. So in essence he is asking for tens of millions of dollars (at least, maybe hundreds) of free money. And not for charity, but for a profit based enterprise.
This is a rather bold request. So to back it up he says the entire fate of bit-coin depends on this.
There is only a single line about preventing a run on mtgox, because (a) trading will only start when mtgox is (mostly?) re-capitalized and has most people's bitcoins. And the prevention of a run on mtgox is pretty straightforward and non-controversial ... just limit the amount of withdrawals.
I am pretty sure this document is the real thing. But one thing I cannot yet decide is whether he stole all or some of the coins or really lost them. The idea that he lost over 700K of coins over the years without noticing is very hard to believe. On the other hand if he did steal the coins, and now is asking for the community to donate them back to him, then he has an immeasurable amount of chutzpah.
The riot was because the government froze deposits so people weren't allowed to withdraw money from the banks. My original (implied) point was that bank runs themselves don't necessarily cause the chaos they're made out to, so if anything this supports my case: if the government had allowed the bank to collapse, there may not have been riots.
I don't see how whether they cannot withdraw because the government blocked withdrawals or because the bank has no money to give away matters. The riots are caused by inability to withdraw money in any case.
No, they weren't. To quote the Wikipedia[1] article on the riots: "The uprising was a predominantly middle-class uprising against the government of President Fernando de la Rúa, who had failed to contain the economic crisis that was going through its third year of recession".
I stand corrected, you weren't being pedantic at all. I guess all those people lined up outside the bank, ready to riot, were waiting for the government to give them their money back.
To quote the Wikipedia[1] article on the riots:
"The uprising was a predominantly middle-class uprising against the government of President Fernando de la Rúa, who had failed to contain the economic crisis that was going through its third year of recession".
"The unrest started when Economy Minister Domingo Cavallo introduced restrictions to the withdrawal of cash from bank deposits, intending to stop the draining of deposits that had been taking place throughout 2001 and had reached the point where 25% of all the money in the banks had been withdrawn." People had were previously gradually withdrawing money over time.; no 'bank run' had occurred. The Corralito occurred, which among other political factors lead sections of the populace to riot. Read the article.
Moreover, the panic unleashed a wave of riots and other forms of domestic unrest. The ultimate result was an increase in the state's police powers, including more professional police forces.[17][18]
The Baltimore bank riot of 1835 was a violent reaction to the failure of the Bank of Maryland in 1834. The riot, which lasted from 6-9 August, was aimed at the homes and property of a number of former directors of the bank, who had been accused of financial misconduct and fraud
The Cyprus riots were not due to a bank run; they were due to the government's decisions to prevent citizens from withdrawing their money. From the article you linked: "Riots are now being reported in Cyprus as citizens are furious at the Troika’s decision to rob the citizens to pay for the bad debts of banks."
I'll give you the others, however. The fact that two are from over a century and a half ago however seems to support my implication that bank runs don't necessarily lead to riots (and more specifically, that not bailing out banks won't necessarily lead to riots).
I'm growing increasingly convinced that this is in fact true, and that the global financial system dodged a major asteroid in 2007. Possibly not a planet-killer, but one that would have set things back a long ways.
The problem remains that the bailout didn't just manage to shore up faith in the currency and banking system, but grossly enriched many of the same bankers who'd, if not caused the crisis, played a major role in precipitating and enlarging it.
You seem to know a lot about this. Why didn't the US government, in all the bailouts, completely wipe out existing shareholders in order to not provide an incentive to do this again?
I've been watching the discussion here for the past few hours.
Mt Gox failing doesn't surprise me. The number of people stepping up and saying this is a hoax or fake does surprise me.
Over 2 months ago I responded to a poster on another bitcoin story who said they had waited over 5 months for their withdrawals. That means Mt Gox has not been solvent since at least last summer.
How can there be a run on a bank you can't get your money from? While the recent freezes of USD and BTC withdrawals were only recently announced it appears that you couldn't really get your money out before either.
I'm going to take a guess. An investor received this document, was appalled and published it.
If I was an investor in Mt Gox and received a document like this, which is clearly an admission of very illegal activity, I would publish it publicly and forward it to the FBI. I don't think there will be a gox.com, but I do think someone will end up on an Interpol list in a few days. Mt Gox wasn't run by people who should be celebrated, it was run by criminals who knowingly took monetary deposits for their insolvent for-profit business.
20 days, 22 days, any entity thats solvent should be able to issue a withdrawal very quickly. It sounds like everyone was delayed, some far more than others for whichever reasons.
Why is there only a single line on preventing a run on MtGox?
Because preventing one at this point is impossible.
If they have truly lost almost everything (2000 BTC remaining), they have nothing, and those USD funds are probably frozen or to be frozen in various investigations. On the contrary, I find this document incredible because it actually envisages keeping mtgox open under new management. That's not going to be possible. Because of massive trust issues with anyone willing to go near this company, at best it's going to close down in an orderly fashion. Putting more money into it now is a lost cause, and without an audit by outside accountants, why should anyone trust them, no matter who the CEO is?
If they actually have lots of USD (I am doubtful), the best outcome for them is a precipitous crash in the bitcoin price down to almost zero, at which point they can pay out all their customers in bitcoin easily by purchasing new bitcoin and walk away with millions of USD. They seem to have done their best to engineer this by being completely opaque about their situation, but I suspect that's just incompetence and panic.
If they don't have accessible funds in USD, and have lost their BTC (as seems likely), no-one will get anything and the company will be wound up. Payouts have been glacial or nonexistent for months, so something has been badly wrong for quite some time.
The best bet for customers now is to apply to financial authorities immediately to have the company shut down and investigated.
Wiping their tweets and leaving it to now to shut down the website then showing a blank page shows you what level they are operating on - I suspect they have no appreciable assets available and are running on fumes, if not they would be acting in a far more rational manner and reassuring customers.
They will not survive this panic and this will end badly when the financial authorities step in.
Let this be a warning to everybody with bitcoin in wallets they do no absolutely control, for example, Coinbase - you can and almost certainly will lose them at a moment's notice, sooner or later.
I feel really sorry for those with funds tied up with MtGox. It was only recently where I used MtGox to store most of my bitcoin and I am lucky to have decided to move them all to paper wallets.
This demonstrates one of the biggest issues holding back widespread adoption of bitcoin, the ability of the layperson to securely hold large amounts of bitcoin.
> Let this be a warning to everybody with bitcoin in wallets they do no absolutely control
Is that how this happened?
Given that bitcoins are supposed to be owned by addresses that are protected by private key, I wondered why people couldn't "withdrawal" their bitcoins. If Mt. Gox was controlling the private keys (as a hosted wallet service) that makes more sense.
That's generally how the exchange services work.. you send money from your wallet to one under their control, which credits an "account" you use to make trades.
Honestly that's a bit creepy. I've started to play around with Dogecoin and decided to see how I could buy $50 or so worth and was horrified at the answers.
* Make a physical deposit against an account number we give you at a bank branch
* Buy Linden Dollars, swap them for Bitcoin, swap them for Dogecoin
* Give people gift card codes
* Pay random people via PayPal or Google Wallet
The last of those was the least sketchy looking but by and large it creeped me the hell out. The options looked like 50% scamming and 50% money laundering.
Well nobody is going to sign up for you using anything that can chargeback, because they can't get their money back if they give it to you.
And a lot of the intermediary payment services like Dwolla stopped working with btc. So if you want doge, either mine it, get sent it from random strangers, or trade it for btc (which is more readily available through services like coinbase).
How is this any different than sending cash to Paypal which then creates an account you use to buy things on eBay with?
And before you say "more regulation" - Paypal is not a bank and operates as a money transfer service. They can and have frozen people's accounts out before.
The reason the methods are so strange is that most other method allow the buyer to do a chargeback and scam the seller.
Yep. At the exchanges, you're basically buying Bitcoin credits when you send them Bitcoin. You can trade these credits for dollar credits. On a functioning exchange, you can withdraw these credits one-to-one for Bitcoin or dollars to a wallet or bank account you control.
In the future there will potentially be decentralized exchanges where a Bitcoin transaction can be a component of an exchange transaction and there is no third-party involved. But not today.
I was under the impression that the whole point of Bitcoin was that it was a decentralised currency, and your coins lived in your wallet. What is the value of actually entrusting your coins to 3rd party where they're outside of your control? Just the ability to exchange them for USD? Why would you keep coins with them on a long-term basis?
Presumably under the assumption that an exchange such as Mt Gox would be able to keep the coins safer than they themselves could, which now doesn't seem like a particularly sound assumption to make.
I can confirm, this was my line of thought. After the first hack, and the seemingly professionalisation of MtGox, especially compared to the other exchanges.
In a proper BTC exchange, most of the Bitcoin are in cold storage, which means they can't be stolen even if the exchange was hacked. The hot wallet would represent the variability in the exchanges BTC holdings and would be very small, so that in case of theft it could be either insured or covered.
That to me sounds like it's safer than any scheme I can come up with, without losing the mobility of the BTC.
Of course, if this document is true, it means MtGox did absolutely no accountancy on their cold wallets for the past 3 years.. that's just plain crazy :(
I wonder if it would be possible to write an AI to manage a Bitcoin exchange; cut out the human element and the potential for mistakes/scamming completely? Before the exchange is launched, publish the AI's source and have it undergo an extensive public audit.
When you have coins on an online exchange, it's not as if those coins literally sit there untouched. Your balance is just a number in a database.
Similarly, if you deposit $100 USD(5 physical 20 dollar bills) in a bank those physical bills don't just sit there waiting for you. They can be given to anyone during the course of the business. You just get "100" added to some database row somewhere. When you want that $100 back, the Bank has to reach into its funds and pay you.
In my opinion, Mt. Gox announcing insolvency would be a good thing for Bitcoin. Given that Mt. Gox froze trades and this document was released around the same time, this might actually be legitimate.
This is a good thing because right now Mt. Gox is giving Bitcoin a very bad name. Silk Road made Bitcoin seem shady. Mt. Gox makes Bitcoin seem like a joke, like you can lose it all because the exchanges are so immature compared to exchanges for USD or etc.
Better now than in a year when a much larger portion of the public has accepted Bitcoin. In the meantime, here comes sub-500 on Bitstamp. Buy the rumor, sell the news, folks.
Waaayyyyy too dramatic to be real; even for MtGox.
Not that I think MtGox is coming back. I'm only interested in how(there's no "if" anymore) they shutdown. Will they be able to make everyone whole again.
Now, if this is real and they really did lose over 700K of coins... they better just pack up and run to a far away galaxy.
There are software companies that account for hosting fees and payment processing fees as COGS; COGS are non-marketing expenses that scale with sales, which can be nonzero for Internet software companies.
That is their projection for the future, and if you assume protracted litigation while they're restructuring is going to be the order of the day, that doesn't sound insane at all.
It's highly likely this is a hoax. I don't even understand who this is allegedly written by? Gox themselves?
Or is the 2nd slide written by someone else? Why would they hypothesize about the demise of Bitcoin, not to mention say "The reality is that MtGox can go bankrupt at any moment, and certainly deserves to as a company" about themselves?
> It's highly likely this is a hoax. I don't even understand who this is allegedly written by? Gox themselves?
The only way I can see it making sense is if it is by someone inside Gox, probably (from the tone) without formal tasking, seeking to galvanize action from decision-makers in a mixture of denial and panic at the time it was written.
It sounds like it's written from the vantage point of an incoming turnaround/bailout team, which explains the shifting perspectives. It's not quite existing management, but a wanna-be new team that shifts into speaking on behalf of the envisioned future incarnation.
Still, I agree there's a high probability it's a hoax.
Re-launch April 1?
No discussion whatsoever of criminal liabilities?
Tallying seized funds in others' hands (including CoinLab and USGov), pending legal cases, as assets?
Totally fanciful belief there'd be donations and new buyers/investors ("cash injections to buy coins [that by the way actually don't exist] at the cheap MtGox price") through a 1-month shutdown-restart, where the only asset is Gox's brand?
It's hallucinatory, to whatever extent it's not an intentional parody of other 'too big to fail' bailouts.
I believe it. We know there have been times when withdrawals of BTC stopped and the stated resolution was that they had to top off the hot wallet from cold storage. Now you might think it would be pretty dan hard to be scammed for years and not notice so many missing coins but we also know they are incompetent so I'm gonna say this could be legit.
Yeah, but how incompetent can you be to lose 700k of coins? I mean at some point you'd look and say, "hey, that's weird, we only have 400k left in our cold storage!"
It's entirely possible that the "leak" is a cover story for someone at the company getting rich. Or that an insider knew the company had a security hole and exploited it while incognito.
The downside to helping out Gox is that the incompetent people don't pay. I'd suggest those with deposits would see a better return if they allowed Gox to go bankrupt, then filed a class-action lawsuit in an attempt to pierce the corporate veil and go after the company's officer's assets. It might still be pennies-on-the-dollar but it wouldn't be zero pennies.
210 comments
[ 3.7 ms ] story [ 344 ms ] threadShould be noted that at the time of this document release, all trading on MtGox is shutdown.
http://www.businessinsider.com/reports-mtgox-halts-all-tradi...
http://www.reddit.com/r/Bitcoin/comments/1yuopj/trading_disa...
On a serious note: I still doubt the legitimacy of this document, given how absurd it is to lose that much BTC without noticing.
Far more absurd things have happened.
Suppose they figured it out three or four months ago that all their bitcoins were gone, what would have made things better? Suppose they figured they'd commit a small fraud two years ago before bitcoin took off, when were they supposed to come clean?
People are building supercomputers to mine bitcoins. The whole idea of bitcoin is as rational as Easter Island totems but organized religion is probably a better analogy.
The amount of lost BTC is in the hundreds of millions of dollars. I personally cannot believe it possible that this is not an insider job. I admit, I've traded on MtGox (speculation in 2011) but things were different back then and I never had my own wallet. My assumption is that it would be trivial to run DAILY reporting that verifies the amount of BTC you think you have on deposit with what you actually do. This is banking 101 and the ONLY way to ensure there is not a bug in your transaction handling.
You are right brudgers that you cannot necessarily expect somebody to police themselves. But Coinbase. Winklevosses. Etc. I'm looking at you. These guys are CLEARLY crooks and have been all along and you let yourselves get snowed.
Create burner email addresses, prepaid cards, etc and setup the domain. Sounds as plausible as all of the other MtGox conspiracies.
Did find this though, which was nostalgic https://web.archive.org/web/19961223071948/http://www.gox.co...
> Netscape Navigator (v.2 or later), Microsoft Internet Explorer (v.2 or later) or Spry Mosaic (v.2 or later).
Amazing
However, MtGox also suspended trading at the same time the document was released, which adds to the likelihood the it is real.
Also, if I were on that situation and soundly advised I wouldn't touch a US based registrar for my new domain even with a 10 foot Bitpole.
So yes, Gox.com probably his now
If it's a hoax, then it's well done. I would guess it's something done by an investment banker who knows how to write documents up like this. But the write up is far too melodramatic for me to believe this was written by someone actually involved in the situation.
"At the risk of appearing hyperbolic, this could be the end of Bitcoin, at least for most of the public." "This isn’t about saving MtGox anymore."
Why is there only a single line on preventing a run on MtGox? That to me would be the most pressing issue once MtGox opened up the floodgates.
But Mt. Gox isn't a business. It's an unregulated exchange, so there's really no point in taking for granted that they would meet some standard of professionalism which by definition they don't have to.
I meant Mt.Gox isn't a business in the sense that businesses, typically, have regulatory frameworks they have to follow, and standards to meet. Particularly when they deal with currency.
Maybe I should have said there's no reason to expect them to act like professionals.
Sure you would, just not a licensed one.
But that took some time to manufacturer if fake.
The document states their USD assets are $22.5M liquid and $10.5M seized/locked ($33M total) and USD liabilities of $55M.
How is this $22M deficit possible when the balance sheet on page 8 (look for the non-redacted version in this thread) shows a positive income for both the 2012 and 2013 fiscal years?
I'm reminded of the Federal Reserve calling in every major Wall Street bank CEO and demanding that they chip in to help rescue the imploding hedge fund Long Term Capital Management, lest it take down the entire market.
http://en.wikipedia.org/wiki/Long-Term_Capital_Management
First time I'm ever seriously considering just cashing out all my coins...
Longterm things like colored coins are looking good for Bitcoin, plus exchanges not run by complete assclowns
http://blog.coinbase.com/post/77766809700/joint-statement-re...
Edit: and now the MtGox website is totally down.
This is a rather bold request. So to back it up he says the entire fate of bit-coin depends on this.
There is only a single line about preventing a run on mtgox, because (a) trading will only start when mtgox is (mostly?) re-capitalized and has most people's bitcoins. And the prevention of a run on mtgox is pretty straightforward and non-controversial ... just limit the amount of withdrawals.
I am pretty sure this document is the real thing. But one thing I cannot yet decide is whether he stole all or some of the coins or really lost them. The idea that he lost over 700K of coins over the years without noticing is very hard to believe. On the other hand if he did steal the coins, and now is asking for the community to donate them back to him, then he has an immeasurable amount of chutzpah.
..that "too big to fail" really is not about jobs or anything like that, but about maintaining faith in the currency.
1. http://en.wikipedia.org/wiki/December_2001_riots_%28Argentin...
"The unrest started when Economy Minister Domingo Cavallo introduced restrictions to the withdrawal of cash from bank deposits, intending to stop the draining of deposits that had been taking place throughout 2001 and had reached the point where 25% of all the money in the banks had been withdrawn." People had were previously gradually withdrawing money over time.; no 'bank run' had occurred. The Corralito occurred, which among other political factors lead sections of the populace to riot. Read the article.
1. http://en.wikipedia.org/wiki/December_2001_riots_%28Argentin...
http://www.independent.co.uk/news/world/africa/customers-tur...
Riots Hit Cyprus Bank After Accounts Frozen
http://www.endalldisease.com/riots-hit-cyprus-bank-after-acc...
Panic of 1837
Moreover, the panic unleashed a wave of riots and other forms of domestic unrest. The ultimate result was an increase in the state's police powers, including more professional police forces.[17][18]
http://en.wikipedia.org/wiki/Panic_of_1837
Baltimore bank riot
The Baltimore bank riot of 1835 was a violent reaction to the failure of the Bank of Maryland in 1834. The riot, which lasted from 6-9 August, was aimed at the homes and property of a number of former directors of the bank, who had been accused of financial misconduct and fraud
http://en.wikipedia.org/wiki/Baltimore_bank_riot
I'll give you the others, however. The fact that two are from over a century and a half ago however seems to support my implication that bank runs don't necessarily lead to riots (and more specifically, that not bailing out banks won't necessarily lead to riots).
The problem remains that the bailout didn't just manage to shore up faith in the currency and banking system, but grossly enriched many of the same bankers who'd, if not caused the crisis, played a major role in precipitating and enlarging it.
It mirrors "too big to fail" startlingly well.
Mt Gox failing doesn't surprise me. The number of people stepping up and saying this is a hoax or fake does surprise me.
Over 2 months ago I responded to a poster on another bitcoin story who said they had waited over 5 months for their withdrawals. That means Mt Gox has not been solvent since at least last summer.
How can there be a run on a bank you can't get your money from? While the recent freezes of USD and BTC withdrawals were only recently announced it appears that you couldn't really get your money out before either.
I'm going to take a guess. An investor received this document, was appalled and published it.
If I was an investor in Mt Gox and received a document like this, which is clearly an admission of very illegal activity, I would publish it publicly and forward it to the FBI. I don't think there will be a gox.com, but I do think someone will end up on an Interpol list in a few days. Mt Gox wasn't run by people who should be celebrated, it was run by criminals who knowingly took monetary deposits for their insolvent for-profit business.
Because preventing one at this point is impossible.
If they have truly lost almost everything (2000 BTC remaining), they have nothing, and those USD funds are probably frozen or to be frozen in various investigations. On the contrary, I find this document incredible because it actually envisages keeping mtgox open under new management. That's not going to be possible. Because of massive trust issues with anyone willing to go near this company, at best it's going to close down in an orderly fashion. Putting more money into it now is a lost cause, and without an audit by outside accountants, why should anyone trust them, no matter who the CEO is?
If they actually have lots of USD (I am doubtful), the best outcome for them is a precipitous crash in the bitcoin price down to almost zero, at which point they can pay out all their customers in bitcoin easily by purchasing new bitcoin and walk away with millions of USD. They seem to have done their best to engineer this by being completely opaque about their situation, but I suspect that's just incompetence and panic.
If they don't have accessible funds in USD, and have lost their BTC (as seems likely), no-one will get anything and the company will be wound up. Payouts have been glacial or nonexistent for months, so something has been badly wrong for quite some time.
The best bet for customers now is to apply to financial authorities immediately to have the company shut down and investigated.
Wiping their tweets and leaving it to now to shut down the website then showing a blank page shows you what level they are operating on - I suspect they have no appreciable assets available and are running on fumes, if not they would be acting in a far more rational manner and reassuring customers.
They will not survive this panic and this will end badly when the financial authorities step in.
Even at the very end, epic Ponzi scammer Marc Dreier was convinced he could dig himself out with more "investments".
I feel really sorry for those with funds tied up with MtGox. It was only recently where I used MtGox to store most of my bitcoin and I am lucky to have decided to move them all to paper wallets.
This demonstrates one of the biggest issues holding back widespread adoption of bitcoin, the ability of the layperson to securely hold large amounts of bitcoin.
Is that how this happened?
Given that bitcoins are supposed to be owned by addresses that are protected by private key, I wondered why people couldn't "withdrawal" their bitcoins. If Mt. Gox was controlling the private keys (as a hosted wallet service) that makes more sense.
* Make a physical deposit against an account number we give you at a bank branch
* Buy Linden Dollars, swap them for Bitcoin, swap them for Dogecoin
* Give people gift card codes
* Pay random people via PayPal or Google Wallet
The last of those was the least sketchy looking but by and large it creeped me the hell out. The options looked like 50% scamming and 50% money laundering.
And a lot of the intermediary payment services like Dwolla stopped working with btc. So if you want doge, either mine it, get sent it from random strangers, or trade it for btc (which is more readily available through services like coinbase).
And before you say "more regulation" - Paypal is not a bank and operates as a money transfer service. They can and have frozen people's accounts out before.
The reason the methods are so strange is that most other method allow the buyer to do a chargeback and scam the seller.
In the future there will potentially be decentralized exchanges where a Bitcoin transaction can be a component of an exchange transaction and there is no third-party involved. But not today.
In a proper BTC exchange, most of the Bitcoin are in cold storage, which means they can't be stolen even if the exchange was hacked. The hot wallet would represent the variability in the exchanges BTC holdings and would be very small, so that in case of theft it could be either insured or covered.
That to me sounds like it's safer than any scheme I can come up with, without losing the mobility of the BTC.
Of course, if this document is true, it means MtGox did absolutely no accountancy on their cold wallets for the past 3 years.. that's just plain crazy :(
Similarly, if you deposit $100 USD(5 physical 20 dollar bills) in a bank those physical bills don't just sit there waiting for you. They can be given to anyone during the course of the business. You just get "100" added to some database row somewhere. When you want that $100 back, the Bank has to reach into its funds and pay you.
http://i.imgur.com/jixb1FZ.png
This is a good thing because right now Mt. Gox is giving Bitcoin a very bad name. Silk Road made Bitcoin seem shady. Mt. Gox makes Bitcoin seem like a joke, like you can lose it all because the exchanges are so immature compared to exchanges for USD or etc.
Better now than in a year when a much larger portion of the public has accepted Bitcoin. In the meantime, here comes sub-500 on Bitstamp. Buy the rumor, sell the news, folks.
Not that I think MtGox is coming back. I'm only interested in how(there's no "if" anymore) they shutdown. Will they be able to make everyone whole again.
Now, if this is real and they really did lose over 700K of coins... they better just pack up and run to a far away galaxy.
http://gyrovague.com/2013/10/30/half-the-donut-why-an-entrep...
Just what the community needs most - new Gox-quality services, hidden behind brand obfuscation. Ready to go!
Wasn't Bitcoin supposed to be different?
That's a bit mind boggling.
whatever they were paying to accountants and lawyers already, it wasn't enough.
Or is the 2nd slide written by someone else? Why would they hypothesize about the demise of Bitcoin, not to mention say "The reality is that MtGox can go bankrupt at any moment, and certainly deserves to as a company" about themselves?
The only way I can see it making sense is if it is by someone inside Gox, probably (from the tone) without formal tasking, seeking to galvanize action from decision-makers in a mixture of denial and panic at the time it was written.
Still, I agree there's a high probability it's a hoax.
Re-launch April 1?
No discussion whatsoever of criminal liabilities?
Tallying seized funds in others' hands (including CoinLab and USGov), pending legal cases, as assets?
Totally fanciful belief there'd be donations and new buyers/investors ("cash injections to buy coins [that by the way actually don't exist] at the cheap MtGox price") through a 1-month shutdown-restart, where the only asset is Gox's brand?
It's hallucinatory, to whatever extent it's not an intentional parody of other 'too big to fail' bailouts.
> cash for buying coins at MtGox price - Target: 50% covered
Called it: https://news.ycombinator.com/item?id=7289629
This sounds like some kind of bullshit.
The downside to helping out Gox is that the incompetent people don't pay. I'd suggest those with deposits would see a better return if they allowed Gox to go bankrupt, then filed a class-action lawsuit in an attempt to pierce the corporate veil and go after the company's officer's assets. It might still be pennies-on-the-dollar but it wouldn't be zero pennies.