MtGox withdrawal delays [Gathering]

[sturle]

Not true.

Bitstamp publish their total volume only.  MtGox don't publish a total volume, but splits it into individual currencies.  If I deposit EUR on Bitstamp and withdraw EUR from Bitstamp, it is still counted as USD volume.  On MtGox it would be counted as EUR volume.  To compare the two you need to add all currencies on MtGox.  Many people don't know this.

Well this seems to be mostly a discussion about USD and I believe the USD volume on bitstamp is now larger. In any case, the ratio of quoted USD volume has been tilting strongly away from Gox, likely due to a loss of faith in their business practices caused by their opacity, and probable falsehoods.

Bitstamp's USD volume is unknown.  They only pubslish their total volume and label it as USD.

Much of the volume on MtGox has shifted from USD to other currencies.  A shift is not a reduction, and can only be explained by the USD withdrawal problems.  Not loss of faith.  Some days the JPY volume alone on MtGox is 50% of Bitstamp's total volume.  Loss of faith in USD then, perhaps?

[sturle]

Note that the 5% is a bank fee.

...

Bank problems is a much more plausible explanation.

Firstly, we don't really know who collects the 5%, just that it is charged.

We only know the information from MtGox, and other theories have no supporting evidence.

This may well be a combination of both problems. There is no evidence of any USD withdrawals being processed after 12 June, so the "10 withdrawals a day"  is likely false or actually applies to the 5% manual option. I suspect they have no working banking relationship right now for the old style ABA wire transfers, but are hoping one will materialize.

There is plenty of evidence on this forum.

[sturle]

How do you explain the timing?  The withdrawal problems started around the 5th of June.  The first Dwolla seizure happened on June 14th.  You have nine days to explain.

Gox admits in their answer to Coinlab that money sent to Coinlab's bank accounts was credited to the balances of Gox customers, but the money was actually held by Coinlab. It seems pretty obvious to me that Gox has been facing financial challenges for a while, and when the two major holes caused by DHL and Dwolla converged with a declining volume at the beginning of June, the shit hit the fan.

CoinLab doesn't explain it at all.  They had millions on USD in profit, a fat order book and more than 5 million USD on the two bank accounts seized by the DHS.

Finally, 5th to 14th June seems pretty close to me. Maybe the DHL action started a few days before it actually hits the news. Anyhow, it looks obvious to me there are diverse factors that are putting Gox under financial stress.

Dwolla were processing withdrawals until Friday 14th.  Only bank wires were delayed.  Five weeks for SEPA and more than a week for international wires.  If the DHS action started earlier, it had no effect on Dwolla withdrawals which it was supposed to target, but on SEPA (delayed for as long as I can remember) and wires from their bank in Japan.  Unlikely.  DHS didn't even target MtGox.  Only Mutum Sigillum LLC.

Nope.  Your explanation doens't work.

[Nemesis]

Does anyone know what is the delay for USD withdrawal to Bank in ASIA? (not Europe or US)

So far i only heard about long delays for USD withdrawal by SEPA (Europe) and US customers.

Also has anyone tried JPY withdrawal? any delays with this?

[Rampion]

How do you explain the timing?  The withdrawal problems started around the 5th of June.  The first Dwolla seizure happened on June 14th.  You have nine days to explain.

Gox admits in their answer to Coinlab that money sent to Coinlab's bank accounts was credited to the balances of Gox customers, but the money was actually held by Coinlab. It seems pretty obvious to me that Gox has been facing financial challenges for a while, and when the two major holes caused by DHL and Dwolla converged with a declining volume at the beginning of June, the shit hit the fan.

CoinLab doesn't explain it at all.  They had millions on USD in profit, a fat order book and more than 5 million USD on the two bank accounts seized by the DHS.

Finally, 5th to 14th June seems pretty close to me. Maybe the DHL action started a few days before it actually hits the news. Anyhow, it looks obvious to me there are diverse factors that are putting Gox under financial stress.

Dwolla were processing withdrawals until Friday 14th.  Only bank wires were delayed.  Five weeks for SEPA and more than a week for international wires.  If the DHS action started earlier, it had no effect on Dwolla withdrawals which it was supposed to target, but on SEPA (delayed for as long as I can remember) and wires from their bank in Japan.  Unlikely.  DHS didn't even target MtGox.  Only Mutum Sigillum LLC.

Nope.  Your explanation doens't work.

We will have to agree to disagree then. In my book, a $10M hole for a young and relatively small company as MtGox is a huge hole. Pretending its "peanuts" is being in denial of the facts. You repeat they have "millions on the order book", which obviously doesn't change the fact that a part of that money, credited to customers balances, is very probably not backed up by fiat in their banks, as they are obviously short of $10M. In fact, they pretty much admit it:

Defendants are informed and believe that in March and April, 2013 MtGox customers, at the
suggestion of CoinLab, deposited $12,788,701.08 into one or more CoinLab bank accounts;
CoinLab then caused the amount of such funds to be credited to such customers' MtGox
accounts but CoinLab did not transfer the actual funds into the MtGox bank account. As a
result, such customers' MtGox account reflected a higher amount of currency funds available
to such customers than were actually in the MtGox bank account. In April, 2013, and upon
the demand of MtGox, CoinLab transferred a portion of those amounts, $ 7,473,490.29, to the
MtGox bank account, leaving a balance of approximately $ 5,315,210.79 to be transferred to
the MtGox account and which is being wrongfully held by CoinLab.

So they they are admitting they have a big hole, and they do not say anywhere that they had to cover the hole with their own money (I would have stated that clearly in the official document, to wipe out doubt about insolvency - wouldn't have you?). The only hard cold fact they are stating is "such customers' MtGox account reflected a higher amount of currency funds available to such customers than were actually in the MtGox bank account".

Plus, instead of being transparent and disclosing their balances as any serious company would do after the mainstream media started to write that Gox might be insolvent (Forbes, Wired....), while many customers started to leave them for good, causing a very unhealthy spread of +10% between exchanges, they just make up absurd excuses such as "the current withdraw problems are being caused by the traditional banking system, not because of a lack of liquidity at MtGox. The traditional banking partners that MtGox needs to work with, are not able to keep up with the demands of the growing Bitcoin economy"

Really? The above seems the most plausible answer to you after all the facts Gox have been hiding and that we now know?

Finally, I'm amazed by the fact you keep repeating "they have $12M in their order book", like that is somewhat reassuring:

• that money is just on Gox balances, it might very well not being backed by fiat in their back accounts (AS THEY STATED IN THE ANSWER TO COINLAB)
  
• even if that money is fully backed by existing funds in their bank, what do you want them to do with it? That is supposed to be their customers money, they are not supposed to operate/cover holes with that!!
• I don't know if you have any experience in running a business, but it doesn't seem so: the fact is they only have $12M in the order book (again: customers money), and they admittedly have a hole of $10M. So, the hole is almost equal to the full amount of fiat they have in their order book, and roughly half of the all time high fiat amount they EVER had on their order book. That's HUGE, try to extrapolate that to Forex and tell me that covering such a hole wouldn't be a problem for them
• Another fact is they allegedly had only an income of $8M during the 4 months of all time high usd volume EVER, and again the hole is $10M. Let me tell you that's a huge hit for a business, having a hole significantly (20%) bigger that the income you got in your best 4 months ever is a BIG problem for ANY company. When the alleged hole was "just" $5M, I thought it was bearable. Now that we discover the hole is $10M, I can't help being worried.

As I stated many times I hope Gox succeeds, and I do not think that the $10M hole will inevitably kill them. If their finances were managed very well prior to Coinlab's and Dwolla issues, they might be able to cover for everything, but not without a big effort. The truth is a) they are not being transparent about their problems nor with their finances (and being an exchange that manages customers funds, they SHOULD); and b) a lot of customers are leaving for good and their volume, and thus their trading fees and projected income, are shrinking day by day.

[rpietila]

Do you believe that Coinlab acted in bad faith since the beginning? Why are they withholding the money that does not belong to them?

[Rampion]

Do you believe that Coinlab acted in bad faith since the beginning? Why are they withholding the money that does not belong to them?

Coinlab says that they had an agreement for MtGox to transfer all its US based customers to Coinlab, and that Gox didn't comply - so they are withholding that money and suing Gox for $75M.

I read this as bad faith, taking into consideration that:

a) that money belong to the CUSTOMERS of the biggest and most relevant (at least for now) Bitcoin exchange
b) withholding Gox's CUSTOMERS money could lead to their insolvency, which would be a huge hit for all the BTC ecosystem
c) Peter Vessenes is both the CEO of Coinlab and the Chairman of the Bitcoin Foundation - the latter is supposed to look after the interests of all Bitcoin users... And its Chairman withholds the money of the customers of the most relevant Bitcoin exchange? WTF?

[Rampion]

We will have to agree to disagree then. In my book, a $10M hole for a young and relatively small company as MtGox is a huge hole.

Considering Gox is the biggest and oldest exchange and has been around from when BTC was worth pennies to what is now a billion dollar market, you must be crazy to think they are not cash rich.

LOL at a billion dollar market.

A billion dollar is the *theoretical* value of all the BTC in circulation, but the quantity of BTC actually moving and being traded is orders of magnitude lower.

Plus, they are so cash rich they do not even have a decent trading engine allowing for the simplest stop losses, nor a way to pay out quickly what they owe to their customers.

Do not underestimate amateurism and bad management.

[joesmoe2012]

maybe they are trying to put the brakes on a little bit and let some of the volume slowly migrate to other exchanges so that they aren't the primary target by all regulators any longer. Which would also be good for the bitcoin community. 

[Luno]

maybe they are trying to put the brakes on a little bit and let some of the volume slowly migrate to other exchanges so that they aren't the primary target by all regulators any longer. Which would also be good for the bitcoin community. 

Interesting point, however not something a business would do intentionally.

If the result is that more exchanges share the exposure to regulation, survivability of Bitcoin in daylight increases.

[nick80]

Just a quick update, even Canadian withdrawals haven't been going through. Waiting 5 weeks and got the same messages everyone else did regarding USD withdrawals.

Requested cancellation and finally got the funds at least back into my mtgox.

[joesmoe2012]

maybe they are trying to put the brakes on a little bit and let some of the volume slowly migrate to other exchanges so that they aren't the primary target by all regulators any longer. Which would also be good for the bitcoin community. 

Interesting point, however not something a business would do intentionally.

If the result is that more exchanges share the exposure to regulation, survivability of Bitcoin in daylight increases.

It may be something that a business is doing intentionally now that they are in the regulatory spotlight. Continuos exponential growth is just going to bring more and more regulatory attention solely on them, whereas if the volume is spread out a bit, instead of gox having to fight the fight alone, they are going at it with the other exchanges.

In addition note that gox is one of the only BTC businesses that has survived direct US Govt action trying to prevent them from conducting business.

[tvbcof]

maybe they are trying to put the brakes on a little bit and let some of the volume slowly migrate to other exchanges so that they aren't the primary target by all regulators any longer. Which would also be good for the bitcoin community.

Interesting point, however not something a business would do intentionally.
...

That may or may not be the case.  Not all customers are created equal and some cost much more money than they bring in.  The several reasons for this that I can think up off-hand are:

 - They are generally criminal and are being chased by authorities.

 - They are hand-to-mouth types who are constantly cashing out tiny amounts to eat.

 - They are not prone to 'trading' but rather use the exchange sparingly to translate between value types (e.g., BTC->USD).  I personally am in this category in part because I don't like giving a cut of my profits to someone else as exchange fees.

So it would do wonders for long term competitiveness to attempt to lose the contingent of customers who marginally profitable or a liability.  Even better, shove them off onto a competitor.

[sturle]

We will have to agree to disagree then. In my book, a $10M hole for a young and relatively small company as MtGox is a huge hole. Pretending its "peanuts" is being in denial of the facts. You repeat they have "millions on the order book", which obviously doesn't change the fact that a part of that money, credited to customers balances, is very probably not backed up by fiat in their banks, as they are obviously short of $10M. In fact, they pretty much admit it:

Defendants are informed and believe that in March and April, 2013 MtGox customers, at the
suggestion of CoinLab, deposited $12,788,701.08 into one or more CoinLab bank accounts;
CoinLab then caused the amount of such funds to be credited to such customers' MtGox
accounts but CoinLab did not transfer the actual funds into the MtGox bank account. As a
result, such customers' MtGox account reflected a higher amount of currency funds available
to such customers than were actually in the MtGox bank account. In April, 2013, and upon
the demand of MtGox, CoinLab transferred a portion of those amounts, $ 7,473,490.29, to the
MtGox bank account, leaving a balance of approximately $ 5,315,210.79 to be transferred to
the MtGox account and which is being wrongfully held by CoinLab.

So they they are admitting they have a big hole, and they do not say anywhere that they had to cover the hole with their own money (I would have stated that clearly in the official document, to wipe out doubt about insolvency - wouldn't have you?). The only hard cold fact they are stating is "such customers' MtGox account reflected a higher amount of currency funds available to such customers than were actually in the MtGox bank account".

We have, from the same source, a number for their profit between April and August 20th.  8 million USD.  + 12 million visible bids in the order book + whatever is in the withdrawal queue + funds not in the order book + profit since August 20th (about 500k by my estimates, counting the 2.5% mixed currency conversion fee as income).  That is a lot of money.  I can only see 1.5 million possibly missing from the total, and that can not possibly explain any current withdrawal problems.  The numbers just don't add up to anything resembling a problem.  They have a few hundred thousands of BTC as well.

Plus, instead of being transparent and disclosing their balances as any serious company would do after the mainstream media started to write that Gox might be insolvent (Forbes, Wired....),

Show me one single other company which actually did that.

while many customers started to leave them for good, causing a very unhealthy spread of +10% between exchanges, they just make up absurd excuses such as "the current withdraw problems are being caused by the traditional banking system, not because of a lack of liquidity at MtGox. The traditional banking partners that MtGox needs to work with, are not able to keep up with the demands of the growing Bitcoin economy"

Why don't you find that credible?  At least it matches all curreently known facts perfectly well, which your explanation don't.

Really? The above seems the most plausible answer to you after all the facts Gox have been hiding and that we now know?

Do you know any facts that I don't know?

Finally, I'm amazed by the fact you keep repeating "they have $12M in their order book", like that is somewhat reassuring:

• that money is just on Gox balances, it might very well not being backed by fiat in their back accounts (AS THEY STATED IN THE ANSWER TO COINLAB)
  

Then why do you think their profit is 0?  They got most of the money from CoinLab in April.  Why did they have any problems in the beginning of June then?  Nobody, not even you, have presented any indications of MtGox beeing insolvent in the beginning of June.  You have two weeks you can't explain, and even after those two weeks you are more than 10 million USD short of making MtGox insolvent with your calculations.  Even if not everything is backed up with money in accounts, they can't be more than 2 million USD short, and there are at least 12 million USD in bids in their order book.  They could keep up like nothing have happened and make that 2 million before Christmas.  Why wouldn't they?  Your explanation just don't make any sense.  Why should risk their customers if they, by your calculations, didn't have to?

[/li][li]even if that money is fully backed by existing funds in their bank, what do you want them to do with it? That is supposed to be their customers money, they are not supposed to operate/cover holes with that!![/li][/list]

Huh?  They could let users withdraw the funds, if they didn't have banking problems.

• I don't know if you have any experience in running a business, but it doesn't seem so: the fact is they only have $12M in the order book (again: customers money), and they admittedly have a hole of $10M.
  

No, they admittedly (and easily verifiable) have a profit of more than 8 million USD as well.  Which, makes the hole only 2 million.  Which makes their positive balance at least 10 million USD + money in withdrawal queue + customers money not in visible bids (most of my money are not in visible bids).

So, the hole is almost equal to the full amount of fiat they have in their order book,

Obviously wrong to anyone who knows basic arithmetics.

• Another fact is they allegedly had only an income of $8M during the 4 months of all time high usd volume EVER, and again the hole is $10M. Let me tell you that's a huge hit for a business, having a hole significantly (20%) bigger that the income you got in your best 4 months ever is a BIG problem for ANY company. When the alleged hole was "just" $5M, I thought it was bearable. Now that we discover the hole is $10M, I can't help being worried.

You mention the profit, but pretend it doesn't exist when talking about the hole.  Why can't their profit be used to fill the hole?

[dzzima]

regardless of the reasons, mtgox is not addressing the issue in the right way. they are just hiding the truth giving us lame excuses - this is very dissapointing.

even if they have a liqudity problem they can borrow money to fix it, it is a valid option for a profitable business.

I gave up trying to withdraw USD, bought back btc but can't withdraw them so far....it throws a stupid error -"Invalid bitcoin address, please confirm your input".

[grovestr]

"Invalid bitcoin address, please confirm your input".

I have it too. What I think will happen:

1. few hours of broken btc withdrawals
2. 5k buy at mtgox driving price @142
3. withdrawals unlocked

[bnjmnkent]

I got this error too. I cancelled my two SEPA withdrawals after not
receiving status changes for 3 weeks. Now I cannot withdraw BTC.
I just contacted the Mt.Gox support on this issue, and will act
on their response.

Edit 1:Kept trying, now I receive the normal messages when
withdrawing.

Edit 2:It took a couple of hours for the last transaction to be
broadcasted, but now everything is visible in the blockchain.

[dzzima]

still no luck for me - will submit a ticket

[dzzima]

mtgox is getting creative - "There was a database error while processing your request"

[sturle]

regardless of the reasons, mtgox is not addressing the issue in the right way. they are just hiding the truth giving us lame excuses - this is very dissapointing.

I think the fact that JPY domestic transfers started appearing from a new bank (as reported by someone else in this thread) is a sign of progress.  It means they actually have at least one new banking partner.  I doubt the queue will get handled very quickly by the new bank.  1 of 10 withdrawal attempts from MtGox bounces due to wrong information (wrong account number, wrong owner, wrong SWIFT address, etc), and all of the bounces have to be handled manually by their bank.  This is what overloaded their old bank.  They will have to work slowly through the queue to avoid too much work at once, but hopefully at a much faster pace.  I hope people will report here when their transfers from June start arriving.

On the other hand the SEPA volume has exploded, and there are still withdrawals in queue as far back as August 31st. :-(