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New message from Mt. Gox

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Re: New message from Mt. Gox

#161

Post by waterlesscloud »

GigabyteCoin wrote: post #131
sillysaurus3 wrote: post #82

Earlier quoted context omitted.

It's not even as simple as a failure to communicate. It's hard not to conclude that they outright lied. First it was malleability, then it was "we're waiting on bitcoin developers," then it was "we've moved due to protesters and security problems," and now it's "we've closed our site due to recent news reports." I wonder when precisely they realized that >700,000btc were missing.

If I'm not mistaken, mtgox has not publicly stated that >700k BTC are indeed missing.

I think it's extremely unlikely the total missing coins is anywhere near that number. Extremely.

Re: New message from Mt. Gox

#162

Post by josu »

swombat wrote: post #29
fennecfoxen wrote: post #28

CONSPIRACY THEORY TIME. What if Mt. Gox didn't really lose a post-Panamax boatload of Bitcoin (just a small amount)? They're just manufacturing a panic so they can buy Bitcoins at fire-sale prices, declare "We have all the BitCoin we need after all, we fixed our bug, everything's fiiiine" and maybe even turn a cash profit on the upside?

If there was any evidence of that they'd go to jail for a long time - even if bitcoin is not directly regulated, I'm sure there are still some anti-fraud regulations that would kick in...

For now a bitcoin is just like a soda can to the eyes of the regulators.

So here is a fun exercise, think of bitcoins as soda cans and rethink the whole situation.

Re: New message from Mt. Gox

#163

Post by dagw »

wpietri wrote: post #41
swombat wrote: post #29

Earlier quoted context omitted.

If there was any evidence of that they'd go to jail for a long time - even if bitcoin is not directly regulated, I'm sure there are still some anti-fraud regulations that would kick in...

Which statement do you think is fraudulent? They could actually have lost the bitcoins. They could be still having technical problems. Fennecfoxen's theory could be illegal market manipulation, but I wouldn't be surprised if the BTC market is weird enough that it doesn't fit under the laws against that. Or at least that it'd be such a mess to prosecute that prosecutors would all find something better for their career…

Fennecfoxen's theory could be illegal market manipulation

Market manipulation in general isn't illegal, so it would basically boil down to if the SEC considered BTC a currency or not.

Re: New message from Mt. Gox

#164

Post by fnordfnordfnord »

sillysaurus3 wrote: post #82
Udo wrote: post #42

I'm one of those who lost a good amount on MtGox. It wasn't in there because I thought they are a bank, I put it there because I like to speculate from time to time. As such I was prepared to lose most if not all of it anyway. I didn't expect things to go wrong so thoroughly, but still that was the premise of my deposits there. So from that perspective, I'm not really mad about them losing the money. It's unfortunate…

It's not even as simple as a failure to communicate. It's hard not to conclude that they outright lied. First it was malleability, then it was "we're waiting on bitcoin developers," then it was "we've moved due to protesters and security problems," and now it's "we've closed our site due to recent news reports." I wonder when precisely they realized that >700,000btc were missing.

I have a speculation: This has been an ongoing issue for some time now. Kerpeles was hoping to solve the problem before it became known widely, and if lucky be able to continue operation as a fractional reserve (unbeknownst to MtGox clients). We could be really charitable to him and assume that he intended to eventually repay the missing BTC from the proceeds of MtGox. At some point, that became an impossibility, but Kerpeles clung to the belief that he could rectify the situation. Kerpeles didn't communicate succinctly with people outside his organization because that would risk alerting outsiders to the extent of the problem and cause a "run on the bank".

>I wonder when precisely they realized that >700,000btc were missing.

Stating the obvious, but it didn't occur all at once. If my speculation bears any resemblance to reality, it would be interesting to know when MtGox' solvency tipped past any chance of recovery, and how long Kerpeles has known that to be the case. I'm thinking that a year or more may have passed.

Re: New message from Mt. Gox

#165

Post by davidw »

icelancer wrote: post #157
davidw wrote: post #68

Earlier quoted context omitted.

Those kinds of guys don't seem like the type to trade cash, which they know well, for magical internet money that they know nothing about.

How do you know a highly organized unit of crime is technologically illiterate?

Well, the local bunch are certainly not all that sharp from that point of view.

"In April 2006, fugitive Mafia boss Bernardo Provenzano was captured in Sicily partly because some of his messages, written in a variation of the Caesar cipher, were broken. Provenzano's cipher used numbers, so that "A" would be written as "4", "B" as "5", and so on.[11]"

http://en.wikipedia.org/wiki/Caesar_cipher

And this wasn't just some bozo, but a Mafia boss who was certainly into a lot of different "lines of business":

http://en.wikipedia.org/wiki/Bernardo_Provenzano

Re: New message from Mt. Gox

#166

Post by fnordfnordfnord »

VLM wrote: post #99
malka wrote: post #10

I would not like to be in the shoes of mtgox CEO... He lost about 400M USD, some of them probably belonging to shady peoples (drug dealer, mobs, etc.)

Thought experiment. So your biggest crooked customer has a balance of 10% of your net liabilities. And someone steals 1/3 your net worth so you're basically outta business and the biggest crook on the planet just took a 1/3 haircut, which he's not going to be too happy about. You tell the biggest baddest gangster of a customer, you can more than triple his current balance at the mere cost of guaranteeing your persona…

>These are better hollywood movie plots than the formulaic dreck we're forced to endure.

I'd watch this movie(s).

Re: New message from Mt. Gox

#167

Post by wpietri »

SilasX wrote: post #125
wpietri wrote: post #45

Earlier quoted context omitted.

The reason I trust normal contracts to work is that I pay for guys with guns to enforce them. I call them "police", and my payments "tax". But if you are doing deals that are illegal, you have to provide your own enforcement. The rational interest of a criminal here wouldn't be revenge. It would be reputation maintenance. The reason mafia loan sharks are known for breaking kneecaps isn't that they're personally upset…

That's the theory, anyway. Let me know how it actually goes when you get defrauded and see if that super-reliable infrastructure has your back, or if your case is too small for them to care about. "The government provides protections" != I can completely trust my contracts to work because of it".

I didn't say it was super-reliable. Or that I trust my contracts to work. But it certainly has been enough for my needs. Despite a lot of years in business, I've never felt a need for extra-judicial enforcement.

Re: New message from Mt. Gox

#168

Post by thisiswrong »

laichzeit0 wrote: post #135
swombat wrote: post #29

Earlier quoted context omitted.

If there was any evidence of that they'd go to jail for a long time - even if bitcoin is not directly regulated, I'm sure there are still some anti-fraud regulations that would kick in...

I sure hope there's no such law. Let those who panicked and sold cry, because they were speculators to begin with. Should there be the same laws kick in if they drive the price up, by say, adding fake orders on their exchange? I don't even think that should be illegal. The market should move as it moves, through whichever means: fairness, deceit or ruse. I wouldn't want BTC any other way.

> Should there be the same laws kick in if they drive the price up, by say, adding fake orders on their exchange? I don't even think that should be illegal.

I strongly agree, and I do believe that there's price manipulation going on with the Gox situation at the moment. Is it just an attempt by Gox to make some money back? Or is it something far bigger aimed at damaging the reputation of BTC? Don't forget that Karpeles has recently been vulnerable to manipulation from the USG [1].

But It's surprising that you wouldn't want BTC, when on the road ahead lies Open Transactions, distributed exchanges, and so much more innovation that will take your above statement and put it directly into code. Thus making these wall-street tactics obsolete.

[1] http://thegenesisblock.com/warrant-for-mt-gox-wells-fargo-ac...

Re: New message from Mt. Gox

#169

Post by diydsp »

bhouston wrote: post #31
fennecfoxen wrote: post #28

CONSPIRACY THEORY TIME. What if Mt. Gox didn't really lose a post-Panamax boatload of Bitcoin (just a small amount)? They're just manufacturing a panic so they can buy Bitcoins at fire-sale prices, declare "We have all the BitCoin we need after all, we fixed our bug, everything's fiiiine" and maybe even turn a cash profit on the upside?

It doesn't have to be MtGox, but anyone who wants to see a quick collapse in the price. And given the anonymous nature of the internet, it is super easy to do.

Yeah, speaking of conspiracy theories, why is no one kicking around the possibility of sabotage from established banks? and/or governments?

Re: New message from Mt. Gox

#170

Post by goldilox »

sneak wrote: post #152
TillE wrote: post #107

Earlier quoted context omitted.

I'm getting a little tired of every (justifiably!) angry group of people being called a "lynch mob" by default on the internet. You might want to wait for something resembling actual violence before applying such an ugly characterization. A bunch of people saying mean things is not a "lynch mob".

There are literally dozens of people on reddit's /r/bitcoin right now casually discussing contract killings, with various shades of joking (from "kinda" to "not at all"). I'm not being hyperbolic.

Isn't that the kind of shit bitcoin was made for? Drugs/contract killings in the "deep web"? Would not surprise me at all if some of those guys are serious, especially if they just lost their life savings.
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