Did Karpeles simply decide to short bitcoin?

[dynodog]

The mtgox reasons for how it came to be short 750,000 btc don't make sense.

Transaction malleability was around and known for a while.  Plus, you could figure out who lied about receiving payments.  You would have their names.  Where is the police report that X, Y and Z stole from mtgox?  Also, almost impossible to believe that TM caused a short position of this massive size.

Cold storage theft.  Also seems very hard to believe from what I've read.

The problems with withdrawals (cash) have been going on for some time - this looks even more suspicious, suggesting that gox knew all along they were short, not that they JUST found out about the alleged cold storage theft or the TM issue.

Is it possible that gox simply believed that the price of bitcoin was going to go down, and simply decided to "sell short" all those bitcoin to its customers, planning on covering after the price dropped, which it never did?  When customers sold and wanted their gains, the money started to run out, and gox was cornered, and they obviously did not have the funds to cover the short position. 

Without a police report being filed at this point, it only makes sense that it was intentional shorting (or an inside job)

[TTBit]

Gox could have had a small problem when btc was under $30 in early 2013 that blew up in their face when the price skyrocketed. Short but not an intentional, speculative short.

[BlockChainLottery]

I find it hard to believe that they just found out to be short of such a big amount.
If you run an exchange, you make sure that everything is monitored closely, every second of the day.
That way, even if 1 satochi is leaked somewhere, you should notice immediately.
The public ledger makes it possible for the first time, that everybody can check every transaction.

But your scenario is interesting, lets see if we ever going to find out what has happened.

[kokojie]

Unlikely, because it's not logical. mtgox was raking in millions in trading fees every month, all it had to do was maintain their very strong #1 market share position. Why would mtgox take on HUGE risk in unauthorized short selling with customer funds? because if they lose, not only they will lose a lot of money, their cashcow (the #1 bitcoin exchange) will also be dragged down with it.

[FelixOliver]

all it had to do was maintain their very strong #1 market share position.

Actually it was the size of their share of the market that caused them to fail... Their whole infrastructure was far too plebeian to manage and fulfill such demand.

This whole fiasco is proof that Bitcoin works... It is a self cleansing mechanism that repeatedly purges the weak links in it's eco-system. Gox failed because they aren't competent enough, they lack the necessary managerial skill etc.. All this does is open the doors for someone more capable and the perpetual cycle of 'survival of the fittest' continues.

This has raised my confidence in the network 100%

[dynodog]

Unlikely, because it's not logical. mtgox was raking in millions in trading fees every month, all it had to do was maintain their very strong #1 market share position. Why would mtgox take on HUGE risk in unauthorized short selling with customer funds? because if they lose, not only they will lose a lot of money, their cashcow (the #1 bitcoin exchange) will also be dragged down with it.

That's exactly what I thought.  It could have been more of a snowball effect.  Karpeles has been in bitcoin since it was trading for less than a dollar.  He decides that people buying at over $100 are paying too much.  He decides to short SOME waiting for the price to decline to cover the short.  The next thing he knows the price just keeps going higher and higher.  Now he's chasing, shorting more and more.  He never meant to be so short, and now he's being squeezed as people are withdrawing cash and bitcoin. 

[bitcoinminer]

Yeah... he shorted it about 744,000 worth of bitcoins lol