Bitcoin Forum
December 10, 2016, 10:56:01 AM *
News: To be able to use the next phase of the beta forum software, please ensure that your email address is correct/functional.
 
   Home   Help Search Donate Login Register  
Pages: [1] 2 »  All
  Print  
Author Topic: MtGox flash-crash rollback - Requesting full disclosure or referal to SEC/JSDA  (Read 3125 times)
freequant
Hero Member
*****
Offline Offline

Activity: 700


View Profile
June 21, 2011, 05:41:48 AM
 #1

People keep saying that rollbacks are "usual" on securities exchanges in case of massive mistrade.
This is true indeed.
But I'd like to remind everyone that such rollbacks are always overlooked by the SEC / FSA / other regulatory body to whom full disclosure is made.
It is also common that the identity of the main beneficiary of the rollback is disclosed publicly for the sake of transparency.

In the case of MtGox, who is the regulator?
Who will warrant that the rollback is legitimate and fair?
Who will verify that the flash crash is due to an intruder, and not a fat finger.
Who will confirm that MtGox does not have vested interests in this rollback?
Who will make sure that the "victim" of the mistrade was not himself doing market manipulation / predatory trading under cover of the MtGox darkpool facility (USD 8M on a single account is very suspicious).

As an exchange, MtGox has a duty of transparency and equity.
This affair must be reported and audited by the SEC or JSDA asap, and the involved counterparts should be notified of it.
Alternatively, full public disclosure of the identity of the beneficiary account is the least that MtGox can do if it wants to proceed with the rollback anyway.

MtGox, please be aware that not only you can refer this matter to the regulatory authorities.
That'll surely look much better for you if you are the one who does though.
1481367361
Hero Member
*
Offline Offline

Posts: 1481367361

View Profile Personal Message (Offline)

Ignore
1481367361
Reply with quote  #2

1481367361
Report to moderator
Advertised sites are not endorsed by the Bitcoin Forum. They may be unsafe, untrustworthy, or illegal in your jurisdiction. Advertise here.
1481367361
Hero Member
*
Offline Offline

Posts: 1481367361

View Profile Personal Message (Offline)

Ignore
1481367361
Reply with quote  #2

1481367361
Report to moderator
1481367361
Hero Member
*
Offline Offline

Posts: 1481367361

View Profile Personal Message (Offline)

Ignore
1481367361
Reply with quote  #2

1481367361
Report to moderator
1481367361
Hero Member
*
Offline Offline

Posts: 1481367361

View Profile Personal Message (Offline)

Ignore
1481367361
Reply with quote  #2

1481367361
Report to moderator
Bit_Happy
Legendary
*
Offline Offline

Activity: 1442


A Great Time to Start Something!


View Profile
June 21, 2011, 05:44:57 AM
 #2

We needed a new thread for MtGox issues, welcome to the forum, freequant.
They are unregulated + they also have a new API!


Changes to the API

Since we will migrate to a new system, I'll announce a few changes to the API so people can be ready. It shouldn't cause any compatibility problem for most people.

    It will be possible to issue API keys for your account, with limited or full access, and revoke those keys. You can however still use the API for full access with login and password
    Trade IDs will be much larger, and no longer in sequence. Old trades will keep their old IDs. New trades will have an ID which correspond to the trade execution time in microseconds, for example: 1308609708628581
    Order IDs will become UUIDs. Old orders will have an UUID assigned to them. An UUID is a 36 characters long string made of hexadecimal characters separated by a dash. Example: 1f0b3734-ddf3-47e8-badb-a85a700c61d9

It should also be noted that the way the whole system works will be a bit different. When an order is placed, it may have a delay before being executed, if the engine is busy. The trade will be put into queue. Additional API parameters will exist to allow trades to be non queued (return failure if engine is busy), have an expiration in queue, do not cause creation of an actual order after being executed if full execution was not possible, or have an expiration as an open order.

Other changes will also be made in the future, however they should be compatible with existing implementations.


https://support.mtgox.com/entries/20208658-changes-to-the-api

15DYJpWJe9H1YofsNQbP9JEWWNn7XPZgbS
Txyru
Member
**
Offline Offline

Activity: 62


View Profile
June 21, 2011, 05:47:46 AM
 #3

They are unregulated.

Vote with your bitcoins. If you want regulation, tell them and don't use mtgox until they sign on some 3rd party to regulate them. if you don't, continue using them.

who regulates the regulator?
TraderTimm
Legendary
*
Offline Offline

Activity: 1652



View Profile
June 21, 2011, 08:55:04 AM
 #4

Seriously. You want regulation?

Trade the green toilet paper equity markets in the USA.

They are, at best, a joke. They will eventually collapse when all the federal debt comes to fore. Invest wisely.

Anyone calling for regulation in bitcoin is a complete idiot.

fortitudinem multis - catenum regit omnia
hamdi
Hero Member
*****
Offline Offline

Activity: 644



View Profile
June 21, 2011, 08:58:26 AM
 #5

japan sure has regulations in place...

relative
Jr. Member
*
Offline Offline

Activity: 56


View Profile
June 21, 2011, 09:58:46 AM
 #6

considering all the info, the 500k BTC probably never existed but where created by SQL injection.
so there is no main beneficiary.

the story that one account with a weak password held 500kBTC was laughable from the beginning. MtGox still lying.
Batouzo
Member
**
Offline Offline

Activity: 70


View Profile
June 21, 2011, 10:03:48 AM
 #7

considering all the info, the 500k BTC probably never existed but where created by SQL injection.
so there is no main beneficiary.

Never existed in what sense? There are blocks carrying 400 k transaction around - although it is just mtgox backing up its wallets AFAIK,
and the fortune gained due to hack leading to 0.01 price was contained inside mtgox database of balances of internal accounts.
relative
Jr. Member
*
Offline Offline

Activity: 56


View Profile
June 21, 2011, 10:13:34 AM
 #8

considering all the info, the 500k BTC probably never existed but where created by SQL injection.
so there is no main beneficiary.

Never existed in what sense?

in the sense that someone added 500kBTC to an account in MtGox's database by SQL injection, with no corresponding bitcoins in MtGox's wallet.
mtgox only makes bitcoin transaction on withdrawals, so even non-existing BTCs can cause a market crash.

Quote
There are blocks carrying 400 k transaction around - although it is just mtgox backing up its wallets AFAIK,
right. if there was one single account holding 500kBTC, wouldnt their wallet backing up all of the deposited BTCs less some operating change be bigger than 400k?
freequant
Hero Member
*****
Offline Offline

Activity: 700


View Profile
June 21, 2011, 12:26:01 PM
 #9

Trade the green toilet paper equity markets in the USA.
Hmm, so there is no green toilet paper trading involved at MtGox maybe?
You are trading bitcoins for what btw? Lulz?
 
They are, at best, a joke. They will eventually collapse when all the federal debt comes to fore. Invest wisely
You are confusing everything. Debt has nothing to do with regulatory bodies. Are you just repeating some random words you heard on this forum?
 
Anyone calling for regulation in bitcoin is a complete idiot.

"regulation in bitcoin"... that does not make more sense than "regulation in USD".
Do you understand that bitcoin is a currency?
Am I talking about regulating a currency?
No, I am talking about regulating the activity of an exchange ...
bitsalame
Donator
Hero Member
*
Offline Offline

Activity: 616


Preaching the gospel of Satoshi


View Profile
June 21, 2011, 12:31:45 PM
 #10

freequant, don't bother.
Most of the people here have no idea about what they think they are defending.
As you noticed, most guys here just repeat words they hear and have no real idea of the very basic definitions.
I bet that many of them would have a really hard time defining what "money" is.
Or what economy is. What is the difference between a "currency" and "money".

I am not underestimating to those who know, but from what I see in this forum, most people have a blind faith in bitcoins without really understanding of what they are fighting for.

Cheers
speeder
Hero Member
*****
Offline Offline

Activity: 546



View Profile
June 21, 2011, 12:35:55 PM
 #11

To those that do not believe 500k coins was in one account:

This is from when 10k was valued 15 USD.

Thus 500k was valued 750 USD.

The owner of those 500k probably is not even aware of what is going on right now, maybe he will never return and those 500k will remain forever in custody of MtGox

Those that think that someone must have evil intentions to hold craploads of money on the exchange, must remember this WAS NOT craploads of money when it was put there.

bitsalame
Donator
Hero Member
*
Offline Offline

Activity: 616


Preaching the gospel of Satoshi


View Profile
June 21, 2011, 12:47:53 PM
 #12

To those that do not believe 500k coins was in one account:

This is from when 10k was valued 15 USD.

Thus 500k was valued 750 USD.

The owner of those 500k probably is not even aware of what is going on right now, maybe he will never return and those 500k will remain forever in custody of MtGox

Those that think that someone must have evil intentions to hold craploads of money on the exchange, must remember this WAS NOT craploads of money when it was put there.

Please, source and proof of your claim.
freequant
Hero Member
*****
Offline Offline

Activity: 700


View Profile
June 21, 2011, 12:50:49 PM
 #13

They are unregulated.
They are running a currency exchange based in two countries with strong financial regulations.
I seriously doubt that they can just be "not regulated".
The asset that is traded at MtGox may be in a gray zone where regulation is unclear.
But they must none-the-less be regulated...

In Japan Casinos and bookmakers are not allowed to operate, and betting is a monopoly of the state. If MtGox manages to convince authorities that it is not a financial exchange, then it falls in the other category: betting businesses...


who regulates the regulator?
Governments.
And people elect governments (in democratic countries at least).
That is not perfect, but still a better control structure than the current case of a totally uncontrolled exchange who can decide to rollback USD 8M of transactions without proper justifications.
silverman
Jr. Member
*
Offline Offline

Activity: 59


View Profile
June 21, 2011, 01:36:13 PM
 #14

Referral to SEC/JSDA, huh?

If you wanted to kill off Bitcoin, what more could you do than to call in Big Government?

I wish you folks would just stay with the fucked up Federal Reserve/Euro system that you allowed to happen, and just leave Bitcoin alone.


elggawf
Sr. Member
****
Offline Offline

Activity: 308



View Profile
June 21, 2011, 03:10:44 PM
 #15

Vote with your bitcoins. If you want regulation, tell them and don't use mtgox until they sign on some 3rd party to regulate them. if you don't, continue using them.

I would extrapolate this idea to the folks who are crying foul over the rollback and that they don't get to keep the coins they bought for pennies... if you want an exchange that lets all trades - including hacked trades - stand, then switch to one that does. If you email TradeHill, Britcoin, Bitcoin7, etc and none of them pledge not to do rollbacks, start your own exchange that does. I'm sure since there seems to be a huge amount of impotent vaginas dead-set against rolling back the transactions, such an exchange would be wildly popular.

"Let the free market decide" indeed.

Good luck getting an insurer to cover potential losses when you have to let people keep their $0.01 BTC, plus reimburse the poor bastard that got hacked.

Does no one realize the irony of espousing an unregulated, "free" market and then crying foul when an entity doesn't play by the rules you assumed they were?

^_^
Txyru
Member
**
Offline Offline

Activity: 62


View Profile
June 21, 2011, 03:54:42 PM
 #16


who regulates the regulator?
Governments.
And people elect governments (in democratic countries at least).
That is not perfect, but still a better control structure than the current case of a totally uncontrolled exchange who can decide to rollback USD 8M of transactions without proper justifications.

Because they have been really good at managing their currency in the past, right, so some state sponsored regulator will do even better?
AtomicTrader
Jr. Member
*
Offline Offline

Activity: 34


View Profile
June 21, 2011, 04:02:32 PM
 #17

People keep saying that rollbacks are "usual" on securities exchanges in case of massive mistrade.
This is true indeed.
But I'd like to remind everyone that such rollbacks are always overlooked by the SEC / FSA / other regulatory body to whom full disclosure is made.
It is also common that the identity of the main beneficiary of the rollback is disclosed publicly for the sake of transparency.

In the case of MtGox, who is the regulator?
Who will warrant that the rollback is legitimate and fair?
Who will verify that the flash crash is due to an intruder, and not a fat finger.
Who will confirm that MtGox does not have vested interests in this rollback?
Who will make sure that the "victim" of the mistrade was not himself doing market manipulation / predatory trading under cover of the MtGox darkpool facility (USD 8M on a single account is very suspicious).

As an exchange, MtGox has a duty of transparency and equity.
This affair must be reported and audited by the SEC or JSDA asap, and the involved counterparts should be notified of it.
Alternatively, full public disclosure of the identity of the beneficiary account is the least that MtGox can do if it wants to proceed with the rollback anyway.

MtGox, please be aware that not only you can refer this matter to the regulatory authorities.
That'll surely look much better for you if you are the one who does though.


HAHAHAHAH! I read this subject line and laughed my a** off! "reported and audited by the SEC"! HAHAHAHA! This goes 100% against the purpose of Bitcoin.  If regulators, especially the SEC were brought into this my faith, along with a lot of others in the ideals of Bitcoin would vanish. That would be a MUCH bigger problem for Bitcoin than a flash crash on MtGox. You "regulation" types are exactly what Bitcoin is NOT about!

freequant
Hero Member
*****
Offline Offline

Activity: 700


View Profile
June 21, 2011, 04:45:11 PM
 #18

I'm sure since there seems to be a huge amount of impotent vaginas dead-set against rolling back the transactions, such an exchange would be wildly popular.

Great, unfortunately your reply is out of topic.
No one is saying in this thread that doing a rollback is bad, so you are reacting against something that no one said.

The topic is : people compare MtGox to other financial exchanges to justify that a rollback is a normal measure in case of mistrade.
But the same people also forget that financial exchanges operate under strict financial supervision, which gives the guaranty to all the market participants that the rollback is indeed legit, and performed according to neutral and fair rules. It is also a common practice to disclose the identity of the requestor of the rollback.
If you pick up one end of a stick, you pick up the other end as well.

If MtGox does not want to report to the financial authorities, the community can emulate this role.
This is why I am asking the full disclosure of the identity of the beneficiary of the rollback so that we can check that the beneficiary is not MtGox itself.
Getting back 8M USD versus disclosing this info looks like a decent trade off.
And that will allow MtGox to wash themselves from the growing suspicions that they are acting out of personal interest.

"Let the free market decide" indeed.
It seems that most people here are completely misunderstanding what financial regulation is.
Financial authorities do not attempt to freedom of the market any more than road safety authorities attempt to the freedom of movement.
They just make sure that things are smooth, and that the road does not turn into a sequel madmax.

To give a more practical exemple, the bitcoin network is playing the role of the regulatory authority on the very specific topics of the monetary policy (how fast the money supply is growing), the ledger maintenance, and the transaction network. Is it a bad thing just because it is a regulation? Obviously not. Bitcoin would already have gone belly up without that consistency self-check.

Please be objective: Bitcoin is a currency and a monetary system, but it is not a market, it is not a full fledged economy, it is not every other wonderful properties people are day-dreaming.
Bitcoin may be self contained as a currency and a monetary system, but it still needs to interface with the real economy, and the dominant fiat currencies and monetary systems. And if it wants to interface, and to have some credibility and leverage in the real world economy, it has to play by the rules when it comes to trading real-world assets.

Does no one realize the irony of espousing an unregulated, "free" market and then crying foul when an entity doesn't play by the rules you assumed they were?
I may repeat myself, but Bitcoin is not a market, it is a currency. You can espouse an auto-regulated (and non unregulated) decentralized currency, and yet want to trade on a regulated (which does not preclude free) market.

Also, seriously, how can you feel you are consistent when you claim that  MtGox is a free market..??
Would a free market improvise new trading rules without prior notice?
Would a free market treat people differently depending on whether they are small or big clients?
Would a free market blame publicly one counterpart and protect the identity of the other?
Would a free market practice desinformation?
Would a free market implement a dark pool in first place?
MtGox is the perfect antithesis of a free market! How can you call that a free market??

Freedom of expression does not imply that I can defame people.
Freedom of movement does not imply that I can enter in a private property without authorization.
Freedom of enterprise does not imply that I can scam my clients.

Freedom does not mean anachy.
A free market is still accountable.
freequant
Hero Member
*****
Offline Offline

Activity: 700


View Profile
June 21, 2011, 04:59:22 PM
 #19


who regulates the regulator?
Governments.
And people elect governments (in democratic countries at least).
That is not perfect, but still a better control structure than the current case of a totally uncontrolled exchange who can decide to rollback USD 8M of transactions without proper justifications.

Because they have been really good at managing their currency in the past, right, so some state sponsored regulator will do even better?

Central banks regulate currencies.
Regulatory bodies regulate markets and transactions.

Bitcoin is a currency and a network that emulates the role of the "central" bank with deterministic rules.
Bitcoin is NOT a market, and it has no built in mecanism to guaranty market fairness and consistency.

So Bitcoin does not prevent rogue markets.
And here we are talking about regulating a rogue market.

Now read again your sentence: does it still make any sense to you?
freequant
Hero Member
*****
Offline Offline

Activity: 700


View Profile
June 21, 2011, 05:03:17 PM
 #20

HAHAHAHAH! I read this subject line and laughed my a** off! "reported and audited by the SEC"! HAHAHAHA! This goes 100% against the purpose of Bitcoin.  If regulators, especially the SEC were brought into this my faith, along with a lot of others in the ideals of Bitcoin would vanish. That would be a MUCH bigger problem for Bitcoin than a flash crash on MtGox. You "regulation" types are exactly what Bitcoin is NOT about!

Why are you all confusing MtGox and Bitcoin?
Here we are talking about MtGox, not Bitcoin.
Should MtGox be trading carrots instead of bitcoins, that would not change at all my argument.

Are all people on this forum suffering of selection bias?
Pages: [1] 2 »  All
  Print  
 
Jump to:  

Sponsored by , a Bitcoin-accepting VPN.
Powered by MySQL Powered by PHP Powered by SMF 1.1.19 | SMF © 2006-2009, Simple Machines Valid XHTML 1.0! Valid CSS!