Bitcoin Forum

Is it possible that we could soon be witnessing the first ever cryptocurrency related bankrun that will cause a fractional bank like MtGox to go down?

Discuss

The way I look at is anything is possible really. Mt.gox has it coming to them.

Could you elaborate on how Gox is operating like a fractional reserve bank?

Well they have a few million in frozen assets that they can't touch, so that's definitely part of it.

Why not?

No it can't be the 1st, it has already been done at inputs.io

Just keep your bitcoins nice and safe away from exchangers till its time to cash out.

GOX is poorly run.  Yes.  But there is little evidence they have cashed out of there HUGE bitcoin profits.  If they even kept 10% of them, they have utterly massive holdings.  Combine that with all of the accounts that are abandoned plus the ones that they hold but should not (like bitcoinica) and you could be in the 50 million USD range.  They could have easily operated to date on just the USD and Euro profit side leaving the BTC untouched.  

Do I think GOX shorted bitcoin by selling more then they have?  Nope.  

Do they have enough currency in Euros or USD to back up their books?  I doubt it.  At these prices that can be fixed.  

Very true, with the millions they have frozen, certainly they can gain that all back fairly quickly with just profits from recent times.

Exactly.  While they are going downhill they are still a money making machine.

There's no need to keep bitcoins in a mtgox system.  Just buy from current owners or from mining.  No need for a bank that's the good thing about the coin.

at these days gox earns more than 200k dollar a day. You really think they go bankrupt?

I will admit that I don't know enough to properly articulate why MTGOX is operating under a Fractional Reserve type system.  However, a great post by ZERODAY https://bitcointalk.org/index.php?topic=314901.0
proves that MTGOX is DOUBLE SPENDING and as a result when you withdraw your BTC's from MTGOX, you will get a confirmation that the BTC's were transferred, however when you check the block chain, no such transaction occurred. If this happens to you (MTGOX goxxes you and double spends, you'll receive your BTC's in about 24hrs  if you're lucky or in some cases a few days).

So why is MTGOX double spending?

This is what ZERODAY found - kudos to him on his research.

Two days ago I was asked by my technically inexperienced friend to investigate lost Mtgox transaction which has never appeared in blockchain.

I found his transaction on https://data.mtgox.com/api/0/bitcoin_tx.php, then converted it from base64 into HEX and tried to broadcast it myself.
However, after attempting doing so, I was really confused to find that the transaction is double-spend.

A day later bitcoins were finally delivered to the target address but they were sent with different transaction.

Did anybody experience the same behavior of Mtgox transactions?