Mt. Gox Files for Bankruptcy Protection • Hacker News Board

Re: Mt. Gox Files for Bankruptcy Protection

#191

Post by FLUX-YOU » Fri, Feb 28, 2014, 4:05 PM UTC

scottcanoni wrote: post #138

Oculus wrote: post #48

To all the HN members who lost a lot of money in this closing, remember the community is here for you. Don't do anything too rash and if you need someone to talk to, myself and most other people would be happy to lend an ear.

Until Mt. Gox publicly confirms that no one will be getting their BTC and/or fiat money back, I think it's wrong to assume money owed to the users has been lost. Please have faith that they will do the right thing.

Don't sit idle on faith though. Start planning around the possibility that you will get zero back from gox.

Re: Mt. Gox Files for Bankruptcy Protection

#192

Post by fab13n » Fri, Feb 28, 2014, 4:09 PM UTC

JumpCrisscross wrote: post #71

When you make a deposit you are extending credit. In the case of Mt. Gox, or any other Bitcoin exchange, that credit is secured by nothing and insured by noöne. Advice, going forward, for managing counterparty risk: (1) Split a $100 transaction into 10 $10* transactions executed incrementally (send $10 of BTC to Mt. Gox, exchange it, transfer it out, and only then send the next $10 of BTC over). This keeps exposure a…

The main feature of BTC is that it's unregulated, so indeed, if you don't provide the security usually enforced by governments, there isn't any.

Usually, when using online services such as MtGox, you're secured by the fact that their reputation is worth more than what they can scam out of you. It's vital for eBay, AirBnB, the Silk Road etc. that you trust them, so they won't let an horror story unfold publicly just to steal you a couple of grants.

If a service / person is in a position to pull off a scam worth more than the reputation / survival of the service, it's dangerous to trust their good will. MtGox was predictably dangerous. Given the poorly aligned interests of MtGox, and the target they represented for black-hat hackers, all this is a (very expensive) lecture in basic economics for libertarian masses.

Re: Mt. Gox Files for Bankruptcy Protection

#193

Post by zAy0LfpBZLC8mAC » Fri, Feb 28, 2014, 4:09 PM UTC

wtvanhest wrote: post #136

patio11 wrote: post #95

Earlier quoted context omitted.

Yep, talk to a CPA. One key issue is you may not have a capital loss, but rather a casualty, which by my read of the flowchart becomes a miscellaneous itemized deduction. Those are limited to 2% of MAGI and I don't believe they carry over. Also, there is a hard cap at $20k for lost deposits. See publication 547. It may be to your advantage to file it under a loss to personal property (form 4648) - the math isn't stra…

It may depend on why the exchange went insolvent. If it is not a technical problem, and is rather a Ponzi Scheme, the tax implications may be much different since there are IRS rules that handle Ponzi Schemes. Additionally, those that gained profits in the exchange may be required to pay back those profits to victims through clawback lawsuits+. This IRS link below is a brief overview of how victims of Ponzi Schemes a…

Noone was promising any returns, so how could this possibly be a ponzi scheme?

Re: Mt. Gox Files for Bankruptcy Protection

#194

Post by enscr » Fri, Feb 28, 2014, 4:20 PM UTC

streptomycin wrote: post #168

enscr wrote: post #115

I feel bad for Mark Karpeles but the way MtGox communicated & lied to its users makes me sad. It's those nameless individuals who believed in him, whose trust was betrayed - those are the ones that deserve the affection of the community. I've been following the news and I think MtGox was handling so much money that they should have focused on better security practices and audits. Few examples of their lackadaisical a…

FWIW, #3 is from the original owner who sold the site to Karpeles in 2011. Doesn't excuse #1, #2, and many other things, though.

Correct, but no evidence of Mtgox improving on the original spaghetti. Circumstances point to the contrary.

Re: Mt. Gox Files for Bankruptcy Protection

#195

Post by dustcoin » Fri, Feb 28, 2014, 4:26 PM UTC

mbillie1 wrote: post #145

enscr wrote: post #115

I feel bad for Mark Karpeles but the way MtGox communicated & lied to its users makes me sad. It's those nameless individuals who believed in him, whose trust was betrayed - those are the ones that deserve the affection of the community. I've been following the news and I think MtGox was handling so much money that they should have focused on better security practices and audits. Few examples of their lackadaisical a…

> and some people stood to lose their entire savings. While I am not defending MtGox, having your entire life savings wrapped up in Bitcoin is hardly a sound, proven financial decision and evokes absolutely zero sympathy whatsoever. Losing it all in a get-rich-quick frenzy is sad - but it's sad in a "I can't believe people are willing to bet their lives on this" way, not a "this poor person lost his/her entire life s…

Given the huge price increases bitcoin has experienced, many people bought bitcoin with a small portion of their net worth that later grew into the vast majority of their net worth. Some of these people were unable to withdraw from MtGox (their USD withdrawal issues were ongoing since June).

Re: Mt. Gox Files for Bankruptcy Protection

#196

Post by [deleted] » Fri, Feb 28, 2014, 4:27 PM UTC

zAy0LfpBZLC8mAC wrote: post #193

wtvanhest wrote: post #136

Earlier quoted context omitted.

It may depend on why the exchange went insolvent. If it is not a technical problem, and is rather a Ponzi Scheme, the tax implications may be much different since there are IRS rules that handle Ponzi Schemes. Additionally, those that gained profits in the exchange may be required to pay back those profits to victims through clawback lawsuits+. This IRS link below is a brief overview of how victims of Ponzi Schemes a…

Noone was promising any returns, so how could this possibly be a ponzi scheme?

[deleted]

Re: Mt. Gox Files for Bankruptcy Protection

#197

Post by ChuckMcM » Fri, Feb 28, 2014, 4:28 PM UTC

Pirates buried their treasure in hidden locations rather than let someone hold on to it for them [1] :-).

[1] I realize this isn't strictly true, as there were organizations the pirates did use, but they had the same challenges with them being crooked or getting captured by England or some other authority at the time.

Re: Mt. Gox Files for Bankruptcy Protection

#198

Post by rbobby » Fri, Feb 28, 2014, 4:32 PM UTC

TheCoelacanth wrote: post #167

scottcanoni wrote: post #138

Earlier quoted context omitted.

Until Mt. Gox publicly confirms that no one will be getting their BTC and/or fiat money back, I think it's wrong to assume money owed to the users has been lost. Please have faith that they will do the right thing.

It seems highly unlikely that anyone will get all of their money back. They announced that they have debts of 6.5 billion yen and assets of only 3.84 billion yen. If they can liquidate 100% of their assets that's only enough to pay back 59% of their debts.

6.5b yen is only 63 million USD. The 850,000 BTC wasn't included as a debt (which is roughly 475 million USD).

Re: Mt. Gox Files for Bankruptcy Protection

#199

Post by [deleted] » Fri, Feb 28, 2014, 4:34 PM UTC

JumpCrisscross wrote: post #71

When you make a deposit you are extending credit. In the case of Mt. Gox, or any other Bitcoin exchange, that credit is secured by nothing and insured by noöne. Advice, going forward, for managing counterparty risk: (1) Split a $100 transaction into 10 $10* transactions executed incrementally (send $10 of BTC to Mt. Gox, exchange it, transfer it out, and only then send the next $10 of BTC over). This keeps exposure a…

[deleted]

Re: Mt. Gox Files for Bankruptcy Protection

#200

Post by rbobby » Fri, Feb 28, 2014, 4:40 PM UTC

miguelrochefort wrote: post #146

mtgoxloser wrote: post #37

In this incident I lost a bit more than $500,000 USD that was in my MtGox account. I sold my Bitcoins a few months back, but the USD have been sitting in my account waiting to be withdrawn. This was a massive fuck up by MtGox, but I really do feel sorry for Mark Karpeles. He seemed really enthusiastic about Bitcoin. Right by MtGox's offices in Japan was a Bitcoin Cafe being built. You can [see here]( http://si.wsj.ne…

Did you try to get your money out of MtGox? A friend of mine has been trying to get his money (CAD) out of MtGox for 2 months. He received his money yesterday.

I would advise him to close the bank account the money went into. Wire transfers can be cancelled... and if the bankruptcy folks are quick on their feet the first thing they'll do is cancel every completed wire transfer they can.