Mtgox claim officially turned bitcoin into Ponzi

[Kluge]

This sentence had me laughing... "Even as we speak, we are still being attacked by a yet-unknown group of people who clearly have intent to hurt MtGox and Bitcoin as a whole." [translated to English]

[drawingthesun]

I really don't understand how MtGox is still the default exchange. What with all you highly skilled technical enthusiasts devoting so much time an energy to the bitcoin experiment. Oh, wait, that would be actual work and not just a circlejerk. My bad.

I've talked to a few people about making a exchange, apart from the fact that it is difficult to do right the biggest issue I run into is getting USD into such a system.

I live in Australia so obviously I would host the system in the USA or Europe, with the cold wallet stored in Australia. But how do I get USD? I would have to open a USA bank account, and then If I want to accept bank deposits I have to follow the law and verify all the customers and have mechanisms to withdraw and deposit in hundreds of countries. It just seems like a lot of hassle of handling that part, the moving USD in and out.

The exchange is a technical problem that I wouldn't mind dealing with. but the USD is a business problem far out of my capabilities.

[Luno]

FinCen defines the rules of dealing with Bitcoin as a money exchanger. Being in Australia won't give you less rules to apply to in dealing with money transfers, more so if you intend to deal in foreign currencies i.e. USD.

I would imagine that Gox Japan right now are moving on from voluntary collecting all personal info to verify accounts, to applying for a FinCen certificate of compliance.

[Kluge]

I really don't understand how MtGox is still the default exchange. What with all you highly skilled technical enthusiasts devoting so much time an energy to the bitcoin experiment. Oh, wait, that would be actual work and not just a circlejerk. My bad.

I've talked to a few people about making a exchange, apart from the fact that it is difficult to do right the biggest issue I run into is getting USD into such a system.

I live in Australia so obviously I would host the system in the USA or Europe, with the cold wallet stored in Australia. But how do I get USD? I would have to open a USA bank account, and then If I want to accept bank deposits I have to follow the law and verify all the customers and have mechanisms to withdraw and deposit in hundreds of countries. It just seems like a lot of hassle of handling that part, the moving USD in and out.

The exchange is a technical problem that I wouldn't mind dealing with. but the USD is a business problem far out of my capabilities.

It gets a lot easier when you only have to accept vouchers. Loss of GoxUSD was a major blow to the parasitic grey market operators, and a major blow to Bitcoin-related USD usability. I'd imagine other exchanges will be following Gox's lead here with regards to FinCEN regulations. Getting fiat out of government control will always be a necessary goal, and removing the codes is a giant leap backward, even if I do suspect Gox engaged in FRB with it.

Idunno... Whatever happened to the sea platform The Pirate Bay was interested in buying....? Sealand. Surely we have plenty of multi-millionaire ultra-idealists in the community, now....

[virtualmaster]

Look what they say! ZOMG

https://mtgox.com/press_release_20130412.html

There is no doubt that we are expecting a violent crash of Bitcoin after trading resumes, but we are confident that this Panic Sell will be temporarily and that Bitcoin will rise again.

This claim can be recognized as promising of further high returns.

http://www.sec.gov/answers/ponzi.htm

A Ponzi scheme is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors. Ponzi scheme organizers often solicit new investors by promising to invest funds in opportunities claimed to generate high returns with little or no risk. In many Ponzi schemes, the fraudsters focus on attracting new money to make promised payments to earlier-stage investors and to use for personal expenses, instead of engaging in any legitimate investment activity.

Bitcoin missed only one sign of financial pyramid: promises of high returns. And here is it! Congrats gox, well done.

Don't blame Mt Gox for everything. They have just asserted what everybody of us expected anyway with a little bit market knowledge.
Even if some assertions of this type would be punished in some countries for registered stock market assets if they are done from their emitter by bitcoin wouldn't be the case.
It is nowhere an officially registered asset and even if it would be Mt Gox is not an emitter of bitcoin. Anybody may assert anything what he expects the bitcoin will be.
What is true that we have high expectations on Mt Gox and they don't correspond to it. But we don't have a better choice at the moment.

[furezasan]

I have a feeling that everyone who hates Mt.Gox is using it a lot... cool down people, they've fucked up and they'll fuck up some more. But this is still an experiment as far as the devs are concerned.

Should've been called BitcoinBETA!

[papa_snurf]

Look what they say! ZOMG

https://mtgox.com/press_release_20130412.html

There is no doubt that we are expecting a violent crash of Bitcoin after trading resumes, but we are confident that this Panic Sell will be temporarily and that Bitcoin will rise again.

This claim can be recognized as promising of further high returns.

http://www.sec.gov/answers/ponzi.htm

A Ponzi scheme is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors. Ponzi scheme organizers often solicit new investors by promising to invest funds in opportunities claimed to generate high returns with little or no risk. In many Ponzi schemes, the fraudsters focus on attracting new money to make promised payments to earlier-stage investors and to use for personal expenses, instead of engaging in any legitimate investment activity.

Bitcoin missed only one sign of financial pyramid: promises of high returns. And here is it! Congrats gox, well done.

Except that mtgox are not a bitcoin organizer...

They are just giving their opinion. If this is a ponzi then everybody who has a blog and who comments on where the SP500 is heading is running a Ponzi.

[mobile4ever]

Its a good thing Mt Gox does not represent bitcoin.

[alxs]

Does this concern anyone might give gov excuse it needs to announce an "official investigation on behalf of the public"

[Aianis]

I see the quotation 'will rise again' to be more of the biblical type, meaning that it will not die.

And that is exactly what I thought when I read the statement. They didn't say the PRICE will rise. They meant that the bitcoin as a currency will not halt it's existence.

OR

They meant to speculate but naive users like me would have faith that the means is what I've just said. If yes, they are laughing in our faces when we deliberately send them OUR money.

I don't know what to think 

[elux]

That statement does look like investment advice.

Would that be unlawful, in Japan? (I'm guessing it would be, in the US, Europe.)

[Tomatocage]

How does this turn Bitcoin into a ponzi?

[Furyan]

That statement does look like investment advice.

Would that be unlawful, in Japan? (I'm guessing it would be, in the US, Europe.)

"GOOG will go up."
"AMZN will go up."
"Oil futures will go up."

All would qualify as investment advice if coming from the mouth of anyone in a position of employment even remotely related to finance. So yeah, MtGox should definitely not have said that.

[StephenJH]

...claimed to generate high returns with little or no risk

Topic starter has the logic of courtney love.

[cbeast]

We'll know if Bitcoin is a Ponzi when the last miner is powered down and the last slice of pizza is eaten.

[Furyan]

We'll know if Bitcoin is a Ponzi when the last miner is powered down and the last slice of pizza is eaten.

That would seem to indicate a basic lack of understanding of the bitcoin protocol.  If the miners shut down completely, there's nothing to confirm transactions. That doesn't make it a ponzi anymore than having computers store your bank account balance makes earning money at your job a ponzi.

[MarKusRomanus]

I don't get this thread. I think everyone was confident that after a huge crash, Bitcoin would rise again.  how is that a promise of profit?  you still have to decide when to buy and when to sell.  People will still loose money from bad buy/sell decisions even if Mtgox says something like feeling confident Bitcoin will rise again after a crash.  Btw, that's like stating the sun will rise again tomorrow.. no big revelation.

[Manticore]

Look what they say! ZOMG

https://mtgox.com/press_release_20130412.html

There is no doubt that we are expecting a violent crash of Bitcoin after trading resumes, but we are confident that this Panic Sell will be temporarily and that Bitcoin will rise again.

This claim can be recognized as promising of further high returns.

http://www.sec.gov/answers/ponzi.htm

A Ponzi scheme is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors. Ponzi scheme organizers often solicit new investors by promising to invest funds in opportunities claimed to generate high returns with little or no risk. In many Ponzi schemes, the fraudsters focus on attracting new money to make promised payments to earlier-stage investors and to use for personal expenses, instead of engaging in any legitimate investment activity.

Bitcoin missed only one sign of financial pyramid: promises of high returns. And here is it! Congrats gox, well done.

April 3rd Mt Gox statement -- 'I understand that many of you have a lot at stake here, but remember that Bitcoin, despite being designed to have its value increase over time, will always be the victim of people trying to abuse the system, or even the value of Bitcoin decreasing occasionally. These are not new phenomena and have been present since the beginning of time when humans first started trading'.

Can you imagine a brokerage in the US being able to say that the underlying is 'designed to increase in value' or that it's value 'decreases occasionally'? They couldn't because it would be illegal.

https://bitcointalk.org/index.php?topic=172944.msg1805765#msg1805765

[MarKusRomanus]

April 3rd Mt Gox statement -- 'I understand that many of you have a lot at stake here, but remember that Bitcoin, despite being designed to have its value increase over time, will always be the victim of people trying to abuse the system, or even the value of Bitcoin decreasing occasionally. These are not new phenomena and have been present since the beginning of time when humans first started trading'.


..is anything in that statement speculation?  I don't think so.  I mean.. it does sound brazen.. but it is basically true.. with one big if.. if it is accepted by more and more people.

[cbeast]

We'll know if Bitcoin is a Ponzi when the last miner is powered down and the last slice of pizza is eaten.

That would seem to indicate a basic lack of understanding of the bitcoin protocol.  If the miners shut down completely, there's nothing to confirm transactions. That doesn't make it a ponzi anymore than having computers store your bank account balance makes earning money at your job a ponzi.

I said nothing about the bitcoin protocol. Having the miners cease their function is the only analog in Bitcoin to a Mr. Ponzi ceasing operations. I also don't have any reason to believe there is any probability that the Bitcoin network will cease for many years.