MtGox withdrawal delays [Gathering]

[Roy Badami]

And BTW, why would the bank "reject" credits after holding them for a few days?

Imagine you are outside the US.  Gox, of course, is also outside the US.  You wire USD to Gox.  Your bank sends a message to Gox's bank instructing them to credit Gox's account, which they do.  In parallel with this, they send instructions to arrange a covering payment between the US banks that your bank and Gox's bank use to settle USD payments (so called 'correspondent banks')

One or other of the correspondent banks' compliance departments then decides to refuse the covering payment for some reason.  So Gox's bank finds itself out of pocket, because it has not been paid the funds for the transfer.  So obviously Gox's bank reverses the transfer.

We've had at least one report of a withdrawal wire being reversed a couple of weeks after the fact (apparently as a result of Citibank's compliance department blocking a covering payment) so it's not at all surprising that similar has happened with deposit wires.

roy

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[TimJBenham]

I'm starting to wonder whether MtGox might not be under LEA control.

What's LEA?

Law Enforcement Agency

[sturle]

I'm starting to wonder whether MtGox might not be under LEA control.

Why would any LEA delay wires to countries outside Japan?  There is no need to travel to Japan to open a bank account there, btw.  Easiest (and quite expensive) is to contact an attorney in Japan to make the arrangements.  You may contact a bank directly as well, but be prepared for a time consuming process of getting all the formalities in order.

[Nagle]

And BTW, why would the bank "reject" credits after holding them for a few days?

Imagine you are outside the US.  Gox, of course, is also outside the US.  You wire USD to Gox.  Your bank sends a message to Gox's bank instructing them to credit Gox's account, which they do.  In parallel with this, they send instructions to arrange a covering payment between the US banks that your bank and Gox's bank use to settle USD payments (so called 'correspondent banks')

One or other of the correspondent banks' compliance departments then decides to refuse the covering payment for some reason.  So Gox's bank finds itself out of pocket, because it has not been paid the funds for the transfer.  So obviously Gox's bank reverses the transfer.

We've had at least one report of a withdrawal wire being reversed a couple of weeks after the fact (apparently as a result of Citibank's compliance department blocking a covering payment) so it's not at all surprising that similar has happened with deposit wires.

roy

Was that for an international wire transfer through the SWIFT system? Details would be useful.  SWIFT rules don't allow banks to revoke transactions for SwiftPay transactions up to USD 20,000 (50,000 EUR between banks in the EU). Settlement has to occur within six days. "Priority" transactions are even less revocable. Banks have to sign a service level agreement with SWIFT to use the system. Once the bank has sent payment instructions via SWIFT, the bank is obligated to cover them with bank funds. It's not at the option of the sending bank. 

ACH is different. That's more of a consumer-level system, with more "undo" features.

[solex]

Interesting point about SWIFT. I wonder if there is a facility where people who are depositing to MtGox can make an official complaint to SWIFT if the process takes >6 days.

[TimJBenham]

I'm starting to wonder whether MtGox might not be under LEA control.

There is no need to travel to Japan to open a bank account there, btw.  Easiest (and quite expensive) is to contact an attorney in Japan to make the arrangements.  You may contact a bank directly as well, but be prepared for a time consuming process of getting all the formalities in order.

Do you have a source for that claim? googling I find many that say only residents of Japan may open a bank account there.

[prophetx]

I'm starting to wonder whether MtGox might not be under LEA control.

There is no need to travel to Japan to open a bank account there, btw.  Easiest (and quite expensive) is to contact an attorney in Japan to make the arrangements.  You may contact a bank directly as well, but be prepared for a time consuming process of getting all the formalities in order.

Do you have a source for that claim? googling I find many that say only residents of Japan may open a bank account there.

 either way you should be able to set up a corporate sub in JP and then set up a corporate bank account but it\s not going to be cheap

[TimJBenham]

I'm starting to wonder whether MtGox might not be under LEA control.

There is no need to travel to Japan to open a bank account there, btw.  Easiest (and quite expensive) is to contact an attorney in Japan to make the arrangements.  You may contact a bank directly as well, but be prepared for a time consuming process of getting all the formalities in order.

Do you have a source for that claim? googling I find many that say only residents of Japan may open a bank account there.

 either way you should be able to set up a corporate sub in JP and then set up a corporate bank account but it\s not going to be cheap

That is how foreigners can get a bank account in the US too. You're right, it costs thousands. I was doubting sturle's claim because normally retail banks don't offer offshore accounts. If you open a corporate account in jp you are still not going to be able to withdraw from MtGox because the bank account will be in the corp's name, not yours.

[Nagle]

Interesting point about SWIFT. I wonder if there is a facility where people who are depositing to MtGox can make an official complaint to SWIFT if the process takes >6 days.

Yes, there is.

21. Redress Procedure
(a) Without prejudice to the application of mandatory provisions of law and of Articles 6 and 7 of the Service Level Master Agreement, the Originator shall be entitled to claim from its Originator’s Bank:
(i) a refund of the principal amount, any Transfer Fees and foreign exchange commissions debited, for any credit transfer not credited to the Beneficiary within twenty (20) Business Days from Acceptance;
(ii) compensation for lost interest for any credit transfer which is not completed within six (6) Business Days from Acceptance as required under this Service Level. The redress so owed (whether of principal, interest or a refund of Transaction Charges) shall be credited to the Originator within fifteen (15) Business Days from his request, provided, that redress claims must be presented within forty (40) Business Days from Acceptance, failure of which they shall not be accepted.

That's what you do if Mt. Gox claims that a SWIFT wire transfer has not been paid to them. (You can claim lost interest after six days, but with today's low interest rates, there's no point.) The bank will then trace the transaction (and probably tell you that the funds are already in Mt. Gox's account.)

Note that you have to make this claim between day 20 and day 40 after sending funds. 

[eggshen]

Just wanted to add my experiences with MtGox to the pile...

I sold $26,000 USD worth of coin on MtGox in mid June 2013 and made 3 withdrawals to my Thai bank account (10k, 10k and 6k respectively) between 15-19 June (my withdrawal limit is 10k USD).

Waited 10 business days before sending them the first support ticket, asking for a status update. Got the standard reply posted by others on this thread.
Each subsequent ticket I sent (about 1 per week) was immediately closed by their support staff without any explanation whatsoever.

Finally, on July 25th I sent them a ticket saying:

If I would cancel all my withdrawals, how long would it take to have my money available to purchase bitcoins again ?

Support staff replied within an hour:

Hello,

Thank you for waiting and sorry for delay. As per your request. We have canceled your withdrawal request and the funds has been credited back to your MT GOX account.

Due to a change in our banking system we are currently experiencing a back-log of withdrawals that we need to process.

Our team is working hard to increase transaction speeds, but there is approximately a two-week back-log we need to overcome.

It will take a few weeks to get back to normal, and we thank you for your patience during this time. We will keep you on update once delay has been fixed.

If you have any further enquiries, please do not hesitate to contact us.

Best regards,
Mt.Gox Team

Note that they immediately went ahead and cancelled my withdrawals, even though I never explicitly stated I wanted them cancelled.
Being very concerned at this point, I bought coin again and moved them to Bitstamp.

I went through their ID and address verification process within 24 hours, sold all my coin and made a withdrawal for the full amount.
On 1 Aug I got an email from Bitstamp staying that my transaction had been processed.
Somewhat surprisingly, the fee for this transaction of $25,600 USD was only $20.

Today, Aug 7 I received the full amount in my Thai bank account.

At least some exchanges seem to do what we all expect of them.
I can accept delays and issues, but being ignored for 7 weeks at MtGox is just unacceptable.

Cheers.

[EuroTrash]

Ok here's my speculation of the day:

There is at least one major international bank (Citi) which is part of many SWIFT chains and is refusing transfers to/from Gox.
Maybe Bank of America is also causing troubles along the chain. Why? Because they can. ("yeah Gox, come after us in court if you can afford it")
Those banks are playing dirty tricks like refusing some of the transfers and causing late chargebacks. That would explains why Japan transfers are allegedly working fine.
The SEPA problem is of different nature: all SEPA banks atm honour the transfers but the MtGox business is "not so desirable" for the Polish bank they use, whatever reason there might be. So SEPA is slow because the bank put a cap on the maximum amounts that can go out via SEPA.

MtGox chooses not to clearly communicate the banking problems they are having because doing so would cause a sudden run on them. A slow death is better than a sudden death. Maybe at this point in time they still hope to bring down their volume to a manageable size without totally disappearing into oblivion.

The bad banks work by flagging / blacklisting accounts so in order to counteract their measures Gox is trying to play hide and seek: open a number of accounts with other banks. Splitting the money across multiple pots allows them to be more resistant to individual account freezes. But it also implies a management overhead and extra costs for moving the money across accounts / keeping them replenished.

In the meanwhile nobody knowns the size of the Dwolla seizure, nor whether any other seizures have happened, nor the amount of damage caused by reversed deposits.

As of today, were there to be a run on Gox, they would end up insolvent and bankrupt. Which still has a high likeliness to happen.
I think they are hanging around hoping to find a way out of the tunnel.

[desired_username]

Got another SEPA EUR

Withdraw on: 2013/06/11

Cleared: 2013/08/06

"Patience is the art of hoping."

[Rampion]

Got another SEPA EUR

Withdraw on: 2013/06/11

Cleared: 2013/08/06

"Patience is the art of hoping."

4, 5 or 6 figures?

[S3052]

Ok here's my speculation of the day:

There is at least one major international bank (Citi) which is part of many SWIFT chains and is refusing transfers to/from Gox.
Maybe Bank of America is also causing troubles along the chain. Why? Because they can. ("yeah Gox, come after us in court if you can afford it")
Those banks are playing dirty tricks like refusing some of the transfers and causing late chargebacks. That would explains why Japan transfers are allegedly working fine.
The SEPA problem is of different nature: all SEPA banks atm honour the transfers but the MtGox business is "not so desirable" for the Polish bank they use, whatever reason there might be. So SEPA is slow because the bank put a cap on the maximum amounts that can go out via SEPA.

MtGox chooses not to clearly communicate the banking problems they are having because doing so would cause a sudden run on them. A slow death is better than a sudden death. Maybe at this point in time they still hope to bring down their volume to a manageable size without totally disappearing into oblivion.

The bad banks work by flagging / blacklisting accounts so in order to counteract their measures Gox is trying to play hide and seek: open a number of accounts with other banks. Splitting the money across multiple pots allows them to be more resistant to individual account freezes. But it also implies a management overhead and extra costs for moving the money across accounts / keeping them replenished.

In the meanwhile nobody knowns the size of the Dwolla seizure, nor whether any other seizures have happened, nor the amount of damage caused by reversed deposits.

As of today, were there to be a run on Gox, they would end up insolvent and bankrupt. Which still has a high likeliness to happen.
I think they are hanging around hoping to find a way out of the tunnel.

makes sense

[desired_username]

Got another SEPA EUR

Withdraw on: 2013/06/11

Cleared: 2013/08/06

"Patience is the art of hoping."

4, 5 or 6 figures?

4

[Lohoris]

So SEPA is slow because the bank put a cap on the maximum amounts that can go out via SEPA.

Would that be legal?
After all SEPA has been created with the purpose of having 1-day transfers, so I kind of doubt a bank can "just delay them".

[desired_username]

So SEPA is slow because the bank put a cap on the maximum amounts that can go out via SEPA.

Would that be legal?
After all SEPA has been created with the purpose of having 1-day transfers, so I kind of doubt a bank can "just delay them".

The goal of SEPA was to improve cross border payments (lower the costs involved), there isn't a  "1 day transfer" in the spec ;-)

[EuroTrash]

So SEPA is slow because the bank put a cap on the maximum amounts that can go out via SEPA.

Would that be legal?
After all SEPA has been created with the purpose of having 1-day transfers, so I kind of doubt a bank can "just delay them".

You are right there. AFAIK A SEPA transfer has to clear within 48 hours.
I think that the alleged "queue" is at Gox, not at the bank.
The bank only accepts transfers up to a certain amount per day and rejects the rest.
They are allowed to do so. AFAIK there is always a cap to transfers in any bank account's terms and conditions.
So the bank is legally in the clear.

Side note: last SEPA transfers seem to have arrived from Germany not Poland. Can anyone confirm?

[solex]

The withdrawal queues are definitely at MtGox because people can wait 6 or 8 weeks for their transfer, request a cancel, and the funds are credited to their trading account immediately. So the wires are not being actioned. "Confirmed" means "we will do it one day, if ever".

The bad banks work by flagging / blacklisting accounts so in order to counteract their measures Gox is trying to play hide and seek: open a number of accounts with other banks.

I agree with this that Gox's transfers are being throttled by their banks. Probably because of US pressure after the Dwolla/MSB fiasco. There must be a daily dollar cap, which means only their biggest, most elite, whale customers get looked after. Everyone else spins in the wind.

[smoothie]

Ok here's my speculation of the day:

There is at least one major international bank (Citi) which is part of many SWIFT chains and is refusing transfers to/from Gox.
Maybe Bank of America is also causing troubles along the chain. Why? Because they can. ("yeah Gox, come after us in court if you can afford it")
Those banks are playing dirty tricks like refusing some of the transfers and causing late chargebacks. That would explains why Japan transfers are allegedly working fine.
The SEPA problem is of different nature: all SEPA banks atm honour the transfers but the MtGox business is "not so desirable" for the Polish bank they use, whatever reason there might be. So SEPA is slow because the bank put a cap on the maximum amounts that can go out via SEPA.

MtGox chooses not to clearly communicate the banking problems they are having because doing so would cause a sudden run on them. A slow death is better than a sudden death. Maybe at this point in time they still hope to bring down their volume to a manageable size without totally disappearing into oblivion.

The bad banks work by flagging / blacklisting accounts so in order to counteract their measures Gox is trying to play hide and seek: open a number of accounts with other banks. Splitting the money across multiple pots allows them to be more resistant to individual account freezes. But it also implies a management overhead and extra costs for moving the money across accounts / keeping them replenished.

In the meanwhile nobody knowns the size of the Dwolla seizure, nor whether any other seizures have happened, nor the amount of damage caused by reversed deposits.

As of today, were there to be a run on Gox, they would end up insolvent and bankrupt. Which still has a high likeliness to happen.
I think they are hanging around hoping to find a way out of the tunnel.

makes sense

+1 Gox's silence on the DWOLLA issue they never really addressed as they said they would back when it first came out (3 months ago?). That speaks volumes. Then the sudden "TWO WEEK" delay which from what I gather is more like 7-8 weeks currently.

Both of these two issues combined + silence really isn't a good thing. Reminds me of when a ponzi (not that they were running one) goes bust there is a TWO WEEK delay and then silence or excuses. In this case, silence.