How is Mt.Gox is protecting your BTC balance?

[MelG]

Hey there Bitcoiners,

I have been spending my time rather quiet on the forum reading topics regarding Bitcoin. Now since the price started rallying up I have been thinking how Mt.Gox is protection your deposits? We all know that the banks (at least in Europe) guarantee your deposits at least up to 100 000 EUR per account.

I am sure many people have started wondering what if something happened with Mt.Gox (hack, bankruptcy, sudden termination of service, etc). People have now more money on Mt.Gox than ever. I am sure there are dozens of people on this forum who bought 500-1000 BTC just a few months back for peanuts and now they are holding almost 100 000 - 200 000 EUR on their Mt.Gox accounts in BTC. How can one trust a privately owned online trading platform for such large amounts of money? Do they have anyone backing up the deposits?

Please enlighten me!

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[MelG]

Thank you for your reply!

So they don't have any policy in case of hacking like "We guarantee your deposits up to 50 BTC" as BitStamp did. Now when it comes to rather large sums that people are holding, what would be the most secure way to store the Bitcoins?

[grue]

Thank you for your reply!

So they don't have any policy in case of hacking like "We guarantee your deposits up to 50 BTC" as BitStamp did. Now when it comes to rather large sums that people are holding, what would be the most secure way to store the Bitcoins?

guarantees are useless unless there's a third party that can hold the funds and audit the user accounts.