Wall Observer BTC/USD - Bitcoin price movement tracking & discussion

[ArticMine]

So your thesis is that MtGox is not only insolvent, they have less than 64.8% of their deposits?

In the case of shutdown by regulators and bankruptcy, where are trading account holders in the line of creditors? Legit question -- I do not know. This is assuming that customer funds are not held in trust -- obviously if Gox is insolvent, this is the case.

If Gox did have 64.8% of deposits in such a situation, do you think trading account holders would receive 64.8% of their money? I don't.

And how many years later would they receive compensation? This is not a matter of straight probability.

One more issue here for those holding MTGox obligations denominated in BTC is that BTC could easily sky-rocket with respect to JPY while MTGox is in bankruptcy. So the BTC MTGox obligation holder may just get a few millibits on the BTC.

That implies MTGox doesn't have any BTC holdings, which I don't think anyone believes. Their assets are frozen when they enter bankruptcy proceedings.

it means the receiver liquidates the BTC for JPY during the bankruptcy

Why is this any more likely to happen than the receiver immediately acting to mitigate risk of BTC/JPY rate fluctuations for all BTC obligations (via options etc)?

I'm not a bankruptcy expert but that seems like something a receiver would do immediately upon assuming control of a multinational with obligations in multiple currencies.

That would seem unorthodox. Logically, all assets would be liquidated to JPY in bankruptcy. I see no reason why this would differ for BTC assets.

So my thinking is that Goxcoin holders in this situation risk being compensated years later for their Goxcoin holdings, denominated in JPY at the original liquidation price.

What will regulators do -- pour all the BTC into Mpex?  

I'm sure there's large holders that would be willing to write up some off-exchange contracts. And as for reasoning: the obvious volatility of BTC assets. I am totally unsure of precedent though, especially in Japan (I just found a PDF of a Brazilian bankruptcy proceeding where the debtors were required to be paid in the original denomination unless they indicated otherwise, but I doubt that's helpful).

In any event, this ignores the bigger logical leap I'm not following: how did MTGox end up insolvent? They certainly appear profitable. Is the theory that they were totally wiped out by tx mutability?

If they lost a significant number of BTC, creating a BTC fractional reserve, before the BTC rise to over 1240 USD very easily. Also poorly managed companies will find all sorts of ways to bleed money.

[mellowyellow]

And maybe wear different ties.

Made me lol.

[Mota]

So your thesis is that MtGox is not only insolvent, they have less than 64.8% of their deposits?

In the case of shutdown by regulators and bankruptcy, where are trading account holders in the line of creditors? Legit question -- I do not know. This is assuming that customer funds are not held in trust -- obviously if Gox is insolvent, this is the case.

If Gox did have 64.8% of deposits in such a situation, do you think trading account holders would receive 64.8% of their money? I don't.

And how many years later would they receive compensation? This is not a matter of straight probability.

One more issue here for those holding MTGox obligations denominated in BTC is that BTC could easily sky-rocket with respect to JPY while MTGox is in bankruptcy. So the BTC MTGox obligation holder may just get a few millibits on the BTC.

That implies MTGox doesn't have any BTC holdings, which I don't think anyone believes. Their assets are frozen when they enter bankruptcy proceedings.

it means the receiver liquidates the BTC for JPY during the bankruptcy

Why is this any more likely to happen than the receiver immediately acting to mitigate risk of BTC/JPY rate fluctuations for all BTC obligations (via options etc)?

I'm not a bankruptcy expert but that seems like something a receiver would do immediately upon assuming control of a multinational with obligations in multiple currencies.

That would seem unorthodox. Logically, all assets would be liquidated to JPY in bankruptcy. I see no reason why this would differ for BTC assets.

So my thinking is that Goxcoin holders in this situation risk being compensated years later for their Goxcoin holdings, denominated in JPY at the original liquidation price.

What will regulators do -- pour all the BTC into Mpex?  

I'm sure there's large holders that would be willing to write up some off-exchange contracts. And as for reasoning: the obvious volatility of BTC assets. I am totally unsure of precedent though, especially in Japan (I just found a PDF of a Brazilian bankruptcy proceeding where the debtors were required to be paid in the original denomination unless they indicated otherwise, but I doubt that's helpful).

In any event, this ignores the bigger logical leap I'm not following: how did MTGox end up insolvent? They certainly appear profitable. Is the theory that they were totally wiped out by tx mutability?

It seems some people here do not know that japan has a very strict insolvency law, I don't think that it is in any way legal there to sell of funds which do not legally belong to gox - That would be the same as selling all the stuff in safety boxes which are stored in an insolvent bank.

That aside, no one really believes gox is insolvent. How could they be? They made so much money on the fees in the last few weeks alone, they have nearly no running costs and the accounts frozen by the feds are frozen because of ongoing investigations, so there is no legal way for people owning those to make gox responsible. The only thing would be the transaction maleability, and one would think that they could have easily bought those amounts back in the last few days without a hassle.

[segeln]

[Mota]

In any event, this ignores the bigger logical leap I'm not following: how did MTGox end up insolvent? They certainly appear profitable. Is the theory that they were totally wiped out by tx mutability?

In part, perhaps. In any case, it's highly unlikely that they were "wiped out". If they are insolvent, I find it hard to believe they are irreparably so (barring a shutdown by regulators). But this is one theory, and it's bolstered by the fact that Gox's failed transaction problems appear to stem back to October 2013. This length of time is concerning.

The question is what was Gox's reconciliation process when re-sending failed transactions and withdrawing from cold storage? As I've said before, we know absolutely nothing. So to assume that they either did or did not have proper controls in place is misguided.

How long was this going on? To what extent was the vulnerability exploited? These questions cannot be answered -- certainly, Gox has no interest in that.

The other thing is, if gox can trace back the perpetrators behind the double sending cases (I am pretty much certain they can, if the perpetrators did not use tor and used fake ids and bills), I reckon they can get it back partly, if not completely.

[ChrisML]

The last 10 pages include the discussion about how so called "victims" from Gox can get some money back after Gox gone broke.

So, did anyone see an update yet? With Gox saying:

Sup dudes,

Sorry... but we fucked up this time, like pretty bad. Shit's gone, but thats life.

Kindest regards.


I didnt. Gox will regulate with's and buy orders.

Hell, if they smart... they minimize withdrawal orders and maximize buy orders. Price shoots up, people still withdraw and they make shitloads on fees.

One way or another, I'm just waiting for that announcement. Cause honestly, nobody deserves losing money. Even speculating about how they could get their money back, gives me shivers.

[Vycid]

Wow last block cleared 40 minutes ago, it is taking so long for my XBT to arrive @ Gox.
https://blockchain.info/

 why is the network so slow?

You're sending your BTC to Gox?

Do you have a screw loose?

[billyjoeallen]

"We will update everyone again by Thursday at the latest"~mt. Gox Team

Way to exceed expectations, Guys.

[Vycid]

"We will update everyone again by Thursday at the latest"~mt. Gox Team

Way to exceed expectations, Guys.

They'll wait until COB too.

Par for the course.

[Adrian-x]

https://blockchain.info/ 53 minutes for a single block, I'm beginning to appreciate Quarks 30 second blocks.

[jojo69]

https://blockchain.info/ 53 minutes for a single block, I'm beginning to appreciate Quarks 30 second blocks.

it happens, just mining luck

[ChrisML]

"We will update everyone again by Thursday at the latest"~mt. Gox Team

Way to exceed expectations, Guys.

You do know that it's 9:30 AM in Japan right now, right?

Monday they announced at 9:30 PM in Japan. That was 1:00 PM in Europe.

Have some patience. Ffs.

[Adrian-x]

https://blockchain.info/ 53 minutes for a single block, I'm beginning to appreciate Quarks 30 second blocks.

it happens, just mining luck

we just hit an hour

[ChrisML]

"We will update everyone again by Thursday at the latest"~mt. Gox Team

Way to exceed expectations, Guys.

You do know that it's 9:30 AM in Japan right now, right?

Monday they announced at 9:30 PM in Japan. That was 1:30 PM in Europe.

Have some patience. Ffs.

[meanig]

If they were going to begin withdrawals today they'd announce it early so they could be in the office to supervise the process for most of the day. If we don't hear something in the next couple of hours don't expect any withdrawals today.

[medialab101]

If they were going to begin withdrawals today they'd announce it early so they could be in the office to supervise the process for most of the day. If we don't hear something in the next couple of hours don't expect any withdrawals today.

Maybe but I imagine if they are going to allow limited withdrawals the whole thing will be automated anyway, no need for supervision.

[solex]

If they were going to begin withdrawals today they'd announce it early so they could be in the office to supervise the process for most of the day. If we don't hear something in the next couple of hours don't expect any withdrawals today.

Maybe but I imagine if they are going to allow limited withdrawals the whole thing will be automated anyway, no need for supervision.

Apart from topping up the hot-wallet when it gets hammered.

[jojo69]

Have some patience. Ffs.

as if we have not had patience, and patience, and more patience with GOX over the years

[billyjoeallen]

"We will update everyone again by Thursday at the latest"~mt. Gox Team

Way to exceed expectations, Guys.

You do know that it's 9:30 AM in Japan right now, right?

Monday they announced at 9:30 PM in Japan. That was 1:00 PM in Europe.

Have some patience. Ffs.

Ffs? Ffs?

When was the last time someone was pleasantly surprised by something from Mt. Gox?  I'm not meaning "Well, you still can't get your money out, but we'll give a discount on trading fees" or "you can't get your money out, but we'll sell you litecoin".

You sit your fat asses on a baby blue bouncy balls cuz you wanna look like a start-up. Fine. START-UPS ARE HUNGRY. Act hungry. Exceed expectations and earn business.

[muyuu]

"We will update everyone again by Thursday at the latest"~mt. Gox Team

Way to exceed expectations, Guys.

Now it's at the soonest.