Thank you. This is important to check the possible outcome.

When the action is needed, there are several actions we can take:

1) We can repeate what icicle did in the U.S., filing a case in police - I do not know U.K. police would act to this, but in China the outcome is: they take the case, write a file, close it in a cabinet and it's there forever - bribing may or may not kick start the progress.
2) We can sue the company,
3) We can ask related entities to act, e.g. check if it requires a court order to freeze intersango account or request force liquidation - perhaps proof of delayed payment of debt is sufficient to start it without court order? I have never been living outside of China. I am oblivious.

Apparent to me that 1) and 3) are less expensive. 2) perhaps can be inexpensive too, because there is a chance he doesn't want to present in the court (if he has nothing to lose), making it less work for everybody. Again, this is a guess from someone whose knowledge of the western world is from hollywood movies.

P.S. We should pay your labour with a percentage if you are to go through all the trouble for others - it's nature. We can fix that when we are set on action
P.S. Losing the 30 coins in Intersango and the 100 coins in MtGox to a Chinese is like, losing between 650 to 1000 coins for people in the first world.

Patrick has bitcoinica's money in MtGox - okay, but what about Intersango's customers money? It was stored in a 'hot wallet' on Intersango, and when it was not, it should be in a 'cold wallet' by Intersango, no reason to go to MtGox.

I feel it is perhaps time to take action, to ride the wave and get some attention. Someone spoke him as having a little responsibility, helped a user when she couldn't fully proof ownership, so if he had money that he doesn't consider his own he may gave to owner, thus getting the rest of the coins from him requires more than asking. Meanwhile a case against him would make it public, so people are aware and learn something from it.

How many of you intersango users are located in England (where the company is registered - correct me if I am wrong) and how many live close to San Francisco (where he lives - correct me if I am wrong)? We need to file case in two places, see who has the jurisdiction.

Early this month I was tempted to file the case in Poland where Intersango bank account is, by asking my friend who was visiting - we failed to get authorization (signed) from other users to file case for them (I wasn't able to myself because my withdraw only had stuck 2-weeks, too short to be taken seriously). I believe simply trying to be noisy without any authorization letter wouldn''t help, so I gave up asking him to file a case in Poland.

Does MtGox look professional to you? If not, why do you expect their document professional?

When you say $1.3m, do you mean the number in first row, first column? That was the year 2012. 2013-2014 is on the second column, totalling $10m.

Ture, they don't know how to avoid the leaks, technically.


They have, but solving this requires the level of core bitcoin devs, any of these may disclose the current financial status. You can have a trusted guy and a proficient one, but not both. The trusted guys talked with the proficient ones many times to try to solve it without revealing too much details. I am too bad at remembering western names to give you google keywords, but this fact was discussed here before.

Did you read that leaked document? I did. The document says they (knew) have leak for years and they could bankrupt any time, and they let it leak with the concern that MtGox drags down the bitcoin world with its fall - that is hubris.

Quote: "The reality is that MtGox can go bankrupt at any moment, and certainly deserves to as a company. "

There are some who point out MtGox would not say this, hence the document is fake. But they are known blatant.

I hate to reply duplicated thread but clearification must immediately follow misinformation. They indeeded lost 744k coins, the '200,000' is the life-saving coins they are asking from investors to get back on their business, if the information of insolvency was remain closed to the public and they resume operation - the other 540k coins they can get slowly in the years following.

Quote: " At this point 744,408 BTC are missing due to malleability-related theft which went unnoticed for several years."

I know you are joking. A real document is expected to be amateurish, a fake one is perhaps professional. You know MtGox once demonstrated their coffer with a transfer of 424242.424242BTC, where 42 is "Answer to Life, Universe and Everything", that was amateurish and people ain't scaried off.

EVEN if the document is a fake, the real one should look better. How can MtGox later produce a more horrible genuine asset table when this one has only 2000BTC in the wallet?

The asset  liability table is on page 4:                                        
                                                                                
http://es.scribd.com/doc/209050732/MtGox-Situation-Crisis-Strategy-Draft        
                                                                                
Asset in BTC = 2000 BTC, in Fiat = 932,930,000 USD (22430000 + 5000000 + 5500000)
                                                                                
Liability in BTC = 664200 BTC (624408+120000-80208), in Fiat: 55,000,000 USD

WORST SCENARIO

If nothing has changed since that document is written, and MtGox has debt liquidated, has receivable received, and suppose they only pay BTC in BTC, pay USD in USD, then you get 0.36% of the bitcoins you lent to MtGox, you get 60% of the fiat money you lent to MtGox. Tehnically, since they didn't lose as much fiat money as Bitcoins. The media can say that fiat money is safer than bitcoins (you may argue that bitcoin is safe, implementains are not weathered as fiat money, and that bitcoin will be as safe as fiat money in the future - then it did not contradict with the public preception that fiat money is safer against robbery for the time being).

MEDIUM SCENARIO

This involve MtGox doing insider deal but not doing arbitrage, because insider deal is simply done on the book but arbitrage requires real coins, and there are no more than 2000 real coins they can do arbitrage with - not without outside help. It's apparent that they bought lots of coints at $260 between 2014-02-19 04:00GMT and 2014-02-20 04:00GMT, so let's assume they emptied their fiat account to buy these coins, that converts 22430000 USD to 86268 BTC. They can sell some of these coins later to get fiat, at a reasonable aftermath price of 700USD. Suppose they wish to pay customers / creditors BTC and Fiat at an equal rate, let that rate be x:

664200BTC × x + 55,000,000 USD × x / 700 = 86268 BTC
x = 11.61%
you get 11.61% of your money back if MtGox used all its fiat money for insider deal and was not punished for that

We can also calculate that at the price of 260USD,  their asset can only buy themselves 86269.23 coins, that is only ¼ of what is needed. MtGox cannnot pay back their customer in fulll with insider deal.

BEST SCENARIO

Now let's say the document is outdated. The document says it plans to reduce liability as its first priority, and it plans to shutdown trading by 25th (which was done according to schedule), by the time it would have covered 50% coins of the 624408 customer liability - the plan is to be found on page 3. ¹

Let's suppose MtGox has reached that goal - it is an illegal insider deal, but let's say they did it. You may think doing arbitrage can get the money they want: that is impossible. They only have 2000 real coins, and arbitrage requires real coins, while insider deal simply removes liability from the book. With only 2000 real coins, there is no arbitrage to do: you take 2000 real coins, sell it in Bitstamp, get cash, and buy more coins from MtGox - but there is no more coins in MtGox at all. You can cook the book but Bitstamp wants to see real coins. So arbitrage is a dead end.

Let's say they managed to reach that goal in the end, however magically done - since they planed it, perhaps there is a way to do it - at the cost of all their fiat:

Asset in BTC = 312204 (624408/2), in Fiat = 0USD
Liability in BTC = 664200 BTC (624408+120000-80208), in Fiat: 55,000,000 USD

Having 0USD in fiat money sounds horrible but having considered that the post-MtGox era would see appreciation of BTC, it would indeed be a smart move.

Now, suppose liquidator requires fiat money be paid first (from the bottom of heart of Mark K. I speculate that he wishes to avoid weighting bitcoin less than fiat money, but it is perhaps not his decision to make), he would have to sell some coins to pay back client's fiat money. 700USD is a reasonable price for post-MtGox era, hence they need to sell 78571.43 BTC to get everyone's fiat deposite fully paid. That leaves him 233,632.57 coins, roughly 35.2% of liabilities in coins. Hence you get 35.2% of the bitcoins, and 100% of your fiat money.

Please someone with related knowledge point out, that if MtGox did a few rounds of arbitrage and insider deals, are they forced to compensate them before compensating creditors?

P.S.

I'd like to suggest everyone focus on how to resolve the situation, blaming Mark K. doesn't help any more. I don't know Mark, from the photo he seems to be in his 30s, like me (I am 31, ran a business), and I know how difficult it is to steer business for a youngster and how diffcult it is to admit incompetence. (Bobby Lee also look like of the same age, perhaps the same to all other bitcoin 'heros'.) You made the mistake to trust Mark the first time, you can't expect him to do beyond what he can. For your information I have 100 coins in MtGox, I transferred half of which into MtGox a few days before their accident, and it is a harder hit for me than those of you who live in the first world (if you live in the first world, imagine that you have 500 to 800 coins stuck in MtGox).

Note 1:
The document was ambigious: it can also be interpreted as "50% coins is already covered, and we plan to cover all coins by 25th". However, MtGox doesn't have nearly enough money to cover all customer coins, even if they don't want any fiat money reserve - and if 50% coins are already covered, they would not have only 2000BTC on their asset table. Thus the document can only mean they intend to cover 50% customer coins.

Note 2:
 (why 260USD? Because they apparently already bought a lot at that price, check price chart)

For others who seek forum registration link: there was none, oda.krell's "open" means you can read their discussion. It look like that you may be able to post if you pay a membership fee.

I long for a better place for speculation discussion, which one do you recommend? I will still revisit this forum from time to time, to check the market sentiment of weak hands.

If there isn't a high quality forum, easy way is to reuse slashdot.org mode, where each post is weighted and voted, and low quality posts are hidden unless you asks for them. Silly posts gets more follow up but not often higher rating (e.g. the previous 'mtgox offline post' calls a lot of attention but with a voting system it is hidden.)

It surprised me that the owner of this brilliant poll goes by the incognito name of BtcTrader47. There are too much personality in the authoring to go with that simple a nickname. Get youserlf a better nickname so we can remember and follow you!

Of course it is the latest post on bitcoin foundation website: https://bitcoinfoundation.org/blog/?p=462

Probably? It makes a huge speculation difference!

There are two mainstream guesses:

1. MtGox is in grave danger of bankrupcy, and they are struggling to buy coins from panic sellers to redeem themself. Evinced by lack of any positive news when they had plenty of opportunity to calm investors - and refusal to answer if they still have client's coins - once by Roger and another time by WSJ.

2. Mark K. is not a personage for his position. He is confused and naïve, and chose to evade the situation.

(it could be 1+2 both)


The foundation has little reputation, because in this crisis they did nothing to protect bitcoin as they vowed to. The media coverage and lose of public confidence is perhaps the worst experience in bitcoin history and they acted nothing more than pointing out that it's MtGox's problem - that tells a childish leader from a mature leader.

Consider that now is the worst moment to quit from the foundation. If Mark K. is doing it, either he needs more bad news to keep GoxCoin down for him to purchase to redeem, or he has extremely bad judgement of timing. The former possibility is getting less and less likely as he got plenty opportunity for cheap coins already. So the wager is on the second, that he is oblivious and naïve - in which case quitting the foundation is a piece of good news, because a naïve leader with insolvent situation should be in of the 5 stages of failure acceptance; while a naïve leader with solvent situation has the heart to wrestle bitcoin foundation reputation with his.

So:

Bitcoin foundation kicked MtGox out = no influnce to speculators, the foundation isn't important.
MtGox decided to quit the foundation = raise the wager on MtGox solvency.

P.S. I looked up the news, Karl asked to quit. Bitcoin foundation may feel happy that they got rid of a problem, but their incompetence to protect bitcoin is evinced in this story, they are already doomed.

i love the way you put it. Many here seems to forget we buy bitcoin because we do not trust fiat, and there should be a day we surrender all fiat in fear. Nice way to use the word capitulation.

I'll keep your list for the moment, since I was more or less aware if it were easy we should be seeing some results already.

I'll excercise the 'can do' spirite for a while: prooving insolvency is not the same as reproducing the ledger, if a single set of expense happen to be greater than all income, you do not need to find all expenses to proove insolvency. See? I added one YES item on your long NO list. Perhaps it can be developed further.

By the way, someone did try to find MtGox addresses, to certain degree. I forgot where I read it, a few years ago.

Yes, but that only finds out the stolen coins of this heist. MtGox could be insolvent since 2011.

Even what you suggested should have been done a few days ago, why no one is posting anything about it?

To identify the cold storage address:
1) The cold stroage address can be identified if the same address transfers funds back to MtGox in regular operation.

2) If cold-storage uses different address to send than to receive, then try this: the criminal would not use big transactions to call attention when MtGox wallet can repeatedly reissue him small amounts automatically. The criminal have a large sum of transactions, not a large transation.

I also expect someone reply saying there is no way to tell criminal's address from normal-customer's address. Well, it is not necessary, because you only need in/out amount to find out the amount in possession by MtGox. Besides, you already know the criminal uses repeated transactions of the same amount, few customers would do that, so the criminal's address is not a mystery like its owner's identity.

Read this to see what happens if you trade on trivial exchanges:
https://bitcointalk.org/index.php?topic=414764.msg4508190
In short: the exchange goes idle and there are too few users to cause a splash in the news when withdraw stops. Public ignores the event. Not any user of it can afford legal action. I have > 30 coins stuck there. There are who lost > 50 coins, have account revoked/disabled, and decided not to sue after all. (The exchange announces: withdraw stop because of power failure, will resume when power is back. And power hasn't been 'back' for 2 months.)

I was waiting for someone to calculate it for a few days, and no one did, means it is impossible. But I thought it was possible.

1. Identify MtGox addresses. I remember someone did this before, academic work. Or blockchain's Andreas knows it.
2. Calculate all the coins in and out. The amount-into-mtgox minus amount-out-of-mtgox is the coins in possession by MtGox.
3. Calculate the current market cap in MtGox. If market cap is greater than the coins MtGox possesses, they must be insolvent, because the market is trading coins that ain't there. If not, they are either solvent or insolvent, where market cap divided by coins-in-possession can give you percentage of coins being traded, which hints the solvence/insolvence: e.g. if 90% of the coins are being traded on the market, then some of the coins ain't there.

Perhaps this calculation is not possible, e.g. because MtGox adopted some anti-trace measurement some time in the past years. Then, is it possible to start an alliance that requires each member exchanges to publish their addresses, so that a 3rd party can verify the solvence of exchanges in the alliance - and notify them if small leaks are found.

If it is indeeded calculatable, anyone who did it must have tried to do it to other exchanges as well.

P.S. I also wonder why it takes so long for MtGox to find someone stealing their coins. It is easily spotted by checking the sum of wallets against the book. My guess is that wallet's sum is bugged, so it didn't report the leak.