"If he avails himself of this court, my God, he is going to get himself over here." - Judge Jernigan

And while he's here, the FBI and the SEC might want to have a few words with him.

No, I'm not a lawyer soliciting for business.

The point is, as Woody Allen once put it, "80% of life is about showing up". If Mt. Gox owes you a substantial amount of money, you need to be involved with the bankruptcy, which requires a lawyer in Japan. It's not up to Mt. Gox to fix this. They're the problem. It's up to the creditors to get organized and fix it.

BTC at Mt. Gox is an asset, and at some point in the bankruptcy, will be returned pro rata to the creditors or liquidated and the proceeds returned on a pro rata basis. If you're involved in a lawsuit, you have a voice about how this goes. If not, you don't.

The guy behind "mtgoxrecovery.com" seems to be the only creditor who is actually represented at the Tokyo District Court. Any creditor has the right to be, but they have to show up through a lawyer.

If you don't have an attorney appearing on your behalf in the Tokyo District Court, you're probably going to come out of this a loser.

Fiatleak.com is an illusion. They have no info about how much fiat is flowing into any exchange. They're just showing transactions within an exchange. Could be new money, but probably is the same money trading back and forth.

The original Reuters article says Mt. Gox was only generating about $1500 a month in income at that point.

Remember all those deals under which big traders didn't pay fees? 

It's normal to see big pending orders below the current price. Most never get executed; they're canceled and moved down. With the price now at 444, the walls have moved downward again.

It's not Mt. Gox's choice. It's the creditors' choice. Unless they can pay everyone back 100%, ultimately a creditor vote determines their fate.

No, BTC-e is accepting only offshore yuan (CNH), not domestic yuan (CNY). If you have CNH, you're already past China's exchange controls and don't need Bitcoin.

I don't have time to explain China's exchange control system. Read this.

Duh.

Yes, for Bitcoin to grow, more suckers users must be recruited. This thing is zero-sum, remember.

The employees had no one to report it to. It wasn't clear that Mt. Gox had a legal obligation to segregate customer funds. The Japan Financial Services Agency wasn't regulating Mt. Gox.

Now, at a real brokerage, in the US or Japan, dipping into customer funds is a crime, and employees have an obligation to report it.

Once there's a bankruptcy and fraud is suspected, it's all different. Now it's time for employees to cooperate with the cops, so they don't take the fall for the crime. (In the US, the first person to report a multi-person fraud to prosecutors gets off. But only the first person. Sometimes this results in a race to the prosecutor's office.)

Not even that. Fiatleak can't see deposits and withdrawals from exchanges, only trades. Transactions within an exchange will show as "Bitcoin buying".

Since China's exchanges are being cut off from China's banking system, the transactions there are probably mostly within the exchange. (Makes you think of Mt. Gox, but in China, there really is government intervention.)

"Mt. Gox faced questions on handling client cash long before crisis" - Reuters exclusive.

"A bankruptcy administrator and police are seeking to determine how a Tokyo start-up that shot from obscurity to dominate global trade in bitcoin managed to lose more than $27 million in old-fashioned cash held in a bank as well as bitcoins worth close to $450 million at today's prices."
...
"In interviews with Reuters, current and former employees at Mt. Gox described the strains that emerged over the handling of customer money just as the firm was gearing up for expansion and bitcoin was edging out of the shadows as an investment and a means of online settlement.

By early 2012, a small group of Mt. Gox employees, all of whom worked on one-year contracts, began to worry that customer funds had been diverted to cover operating costs that they estimated to be rising. Those costs included rent in a Tokyo high-rise that also housed offices for Hulu and Google, high-tech gadgets such as a robot and a 3-D printer and a souped-up, racing version of the Honda Civic imported from Britain for Karpeles, people who have reviewed expenses said."
...
"Karpeles was the only person at Mt. Gox who had access to the bank accounts, and each withdrawal request was handled manually, slowing the process, three former employees said."

With former employees talking to the press and police, jail for Karpeles looks a lot more likely.

If she has some of the assets from Mt. Gox, civil suits are appropriate. Karpeles went to Japan with very few assets.  If the wife now has a lot of money, it raises questions as to whether she profited from a criminal enterprise.

Filing that creditor brief has had substantial effects. It caused the court to delay putting Mt. Gox into "civil rehabilitation" for a month while investigation continues. So Karpeles doesn't get what he wanted - remaining in charge of Mt. Gox with few restrictions while creditors were prevented from suing. It now looks like that's not going to happen. I hope someone moves to put a trustee in, which means Karpeles is out and a court-appointed trustee is in charge.

The biggest problem in this mess is that nobody had been speaking up for Mt. Gox's creditors in the Tokyo court. As soon as someone did, suddenly things stopped going Karpeles' way. Showing up in the right court really matters. Filing suit in the US or UK isn't that effective at this stage.

I was critical of the "mtgoxrecovery.com" guy at first, because he was anonymous, but now that he's identified himself and has lawyers appearing in the right court, things are happening. The Tokyo police are now involved, which should have happened sooner. After all, there's half a billion dollars missing.

Mining and speculating are separate business activities. If you're not making money on mining at current prices, you shouldn't be doing it.

Well, the real question to ask is why Bitcoin should be any higher than it was last October, when it was around $100.

The big run-up was due to the China bubble. For a few months, people in China could easily buy Bitcoins on line with yuan and sell them outside China for dollars or euros. That provided a cheap, easy, online way to bypass China's exchange controls. (Chinese citizens are not allowed to simply trade yuan for dollars or euros.) Then the People's Bank of China cracked down, the China bubble collapsed, and the exchanges in China are very slow or closed. (As one person from China points out on here, nobody even talks about Bitcoins on QQ any more.)

So that's over. The question to ask is, what else makes Bitcoins worth 5x what they were six months ago?  "Overstock.com" accepting them? A few Bitcoin ATMs? Higher mining costs?

Did those guys ever actually do anything other than solicit customers? There's some action in the Tokyo District Court, but it doesn't seem to involve this outfit.

Good to know, since he'll be a co-defendant.

The problem with inter-exchange Bitcoin arbitrage is that many of the exchanges are sluggish about withdrawals. Also, what with all the fees, exchanges have to be more than 2-4% apart before it pays.

You also have to figure in a > 50% chance that any Bitcoin exchange will go bust.