Seriously though: by allowing deposits while suspending withdrawals, MtGOX became a scam site in my book.
Definitely shady however there appears to be actual evidence Gox is attempting to fix their problems; gmax's blockchain analysis appears to show this. While we can speculate scam, and should pay heed, actual evidence seems to show otherwise. Scam claims seems to be circumstantial still.
Any sensible person would flee from MtGOX at the first opportunity. Yet by posts in this and other threads, many still defend Mark and expect MtGOX to continue trading there once it resumes withdrawals.
I believe he'll fix the issues but I'm not sure the market will be there for him if he does. It's just based on history. He's been sloppy forever but honest, as far as I know, to this point. I don't trade there anymore but use Coinbase to buy and sell now, and am testing Bitfinex with a small amount. Bitfinex seems shady to me but I guess we'll see. So you can see, people who want to trade Bitcoin don't have a ton of options. This is why some may stick with Mark if he comes back from the brink.
I just learned a story about a 'bitcoin investment fund' in a certain Latin American country. The fund took several thousand coins from clients, promising large returns in BTC. Then the owner claimed that the fund had been hacked an all the coins were stolen, and closed the fund. The clients have not yet received their coins back.
It's bad enough to trust an exchange when trading. It's doubly bad to trust a man in the middle. It's a story played over and over with any investment scenario. Bernie Madoff crushed the dreams of a lot of folks.
What makes the story interesting is that that same person is the owner of that country's main bitcoin exchange. And his clients see nothing wrong with that. Why is there so much tolerance to dishonesty in the bitcoin community?
Does it have something to do with the libertarian philosophy, in some broad sense of the term? Perhaps those loyal clients think, "The guy is not a scammer, because anyone who lost money to his scam is stupid, and stupid people deserve to lose their money"?
I'm not certain why people seem so easily scammed but I don't believe it's just this community. My opinion is that it may have a tiny bit to do with Libertarianism because their philosophy is that regulation shouldn't come from The State but from the community instead. Correct me where I'm wrong, Libertarians, I believe the hardcore among them prefer the community to "regulate" rogue companies/people. Caveat Emptor reigns. If someone rips you off then you don't do business there again and make sure your neighbors know. So they're willing to show more trust up front often if they haven't heard a reason not to, and that is a scammer's paradise. Shout out to the Bitcoin scammer's go-to ploy: the Pre-Order. Also the community is popular with younger folks who can be more naive concerning the nature of their fellow man.
The nature of Bitcoin as currency sorta flips commerce on its head. Normally we get service first then pay, or we have an intermediary like a credit card company agree to pay if a service provider needs payment first. With Bitcoin service providers want payment first and there is no safety net. It's not common to use escrow with Bitcoin. This leaves a wide window for scams.
This is why I personally don't yet believe Bitcoin will become "the internet's currency" though it is great for face-to-face services where one is unlikely to need reimbursement, like haircuts, restaurants, yadda. It may get used online at places with already established trust, like Overstock or Amazon.
I don't believe stupid people deserve to lose money but there are a lot of wounded birds and only so much gauze and tape. At some point people need to be responsible for their own actions. For example I half expect Bitfinex to abscond at any time so if I lose what I have there you won't hear a complaint from me because I know they look shady. You'll get an earful from lots of others if it happens though because people want some one to blame other than themselves. That's Bitcoin or anything else in this world.
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