I stand by my valuation. MTGoxBTC are worth about 1-3 mBTC per MTGoxBTC

One cuts of the dead wood from a plant and then it blooms in the spring. The dead wood was just cut from Bitcoin, so I voted yes.

Who is going to buy into a 350 million USD liability, which given Bitcoin's history could easily turn onto a 3.5 billion USD or 35 billion USD liability?

I believe congratulations are in order for getting the money to pay for your castle out of MTGox.

0.00000000 BTC
0.00000000 CAD
0.00000000 USD

In fiat terms if say the BTC/USD rate goes to say 50000 by the time this is settled they could get 10-30%.  

The hair cut in BTC terms will be brutal. If we take the leaked document we have 2000 BTC to cover BTC liabilities over 700000 BTC. Let us not forget that BTC/USD rate could go over 1000 or more in the next few months as this brutal short squeeze unravels. My guess in the neighbourhood of 99.7% to 99.9% or a payout of 1-3 mBTC on the BTC.  

Edit: There is no central bank to print more BTC and bail out an "insolvent" "bank" here. 

It is a very good purchase. I am not familiar at all with the Estonian real estate market, but it is apparent to anyone with experience in real estate that the value is there. Having said this I suspect the real hard part here was not the purchase of this property, but rather getting the million euro out of MTGox.  

The mainstream is very aware of the problems at MTGox and the market has already priced this. As for size of the ponzi, assuming the 700K+ figure is correct, relative to the size of the Bitcoin economy it is actually comparable to pirateat40. I say hold, not hodl. It will be a wild ride, but those who hang on will be glad they did. If one wishes to trade this bear, I would not risk more than 1-5% of BTC holdings or fiat equivalent.  

Congratulations on your purchase.

Because the market has already priced with a non zero probability there are some real bitcoins in MTGox. Check for example https://bitcoinbuilder.com/. The same phenomenon occurred with pirateat40. People were selling in fear that pirateat40 would pay resulting in a flood of bitcoins hitting the exchanges. This was in the fall of 2012 and we all know what the market did after.

I am. It is called wallet.dat backed up on a 5.25in floppy disk among other places.   My floppy also survived the collapse of First Pirate Savings and Trust, later called Bitcoin Savings and Trust and the collapse of Bitcoinica among other interesting events.

If this 700K+ BTC loss turns out to be true, the bears will first have a say, then when the market figures out that those BTC are gone and consequently cannot be sold expect the "short squeeze" to drive price of Bitcoin in terms of USD to new highs in the 4-5 figures.

. The regulator got it bang on, however the article title did not because it avoided the crucial word "exchanges". It is important to recognize that a critical feature of Bitcoin is to avoid the counterparty risk associated with electronic transfer of funds using traditional fiat currencies, thereby making regulation of the "counterparty" moot. If one however deposits bitcoin with a company that in effect acts like a bank or money services business, then that company needs to be regulated at least as much as a bank or money services business.

Edit: The counterparty risk associated with deposits is actually much higher with Bitcoin because unlike traditional fiat currencies the option of bailing out over extended banks by printing more money is not possible with Bitcoin.

The newbie has a point this is part of the reason. What many are forgetting is that the MTGoxBTC/MTGoxUSD price is not an indicator of MTGox's financial health, far from it, but rather an indicator of the chances of a MTGoxBTC holder being paid vs a MTGoxUSD or other MTGoxfiat holder being paid. One of the reasons for the drop last week is sizeable MTGoxBTC holders selling for MTGoxUSD in order to position themselves to sue. Once the deadline for the lawsuit passed many of those that chose not to participate or were too small to participate would buy MTGoxBTC in order to exit via Bitcoinbuilder.

This seems to me the fairest way for everyone involved especially in light of the pending litigation. By the way I do not have any assets tied up in MTGox.

Maybe it was GIMPed or some propriety app on an iPad. Who knows or cares. What matters is that it is a fake.

What bad news? Link please.

Maybe the OP can explain why there are no links in his post and I cannot find any reference to this in Google news?

I would take a very close look at this: https://bitcointalk.org/index.php?topic=476535.0;all. It may also explain the recent behaviour of the MTGoxBTC/MTGoxUSD market.

There is a huge difference here between the currency itself, Bitcoin, which cannot be regulated by design and those who take bitcoin deposits on behalf of others for whatever reason, they can and should be regulated.