I feel it is my duty to warn you all.

[deepceleron]

Good luck with that one. This is an organization that is run by English-speaking foreign nationals (or cyber-pseudonyms) who just happen to be in Japan and can leave on a whim, hosted through a Florida company specializing in DDOS mitigation with globally distributed servers, with bank accounts in several foreign countries receiving and sending Dollars (not Yen). They are connected to a worldwide unfettered payment system that is redundant with no central choke point and has more computing power than Japan's biggest supercomputer. They can receive dollars from Brazil that end up in Spain, and can exchange wire transfers from Thailand for a global virtual currency used for buying socks from halfway around the world. They are too global to regulate, and their profit is in a currency that government doesn't want 30% of.

Unfortunately, the level of trust they have earned to secure the interests of their users puts them somewhere between Citibank and Sony. They have not disclosed the purpose of a huge transfer of BTC out of their main wallet during a time when the site may have been compromised but still running, the biggest single transfer of BTC ever, and it remains to be seen if it was insurance or a huge cybertheft.

Edit: I just noticed this huge transfer of 424,242 when exploring blocks: http://blockexplorer.com/tx/3a1b9e330d32fef1ee42f8e86420d2be978bbe0dc5862f17da9027cf9e11f8c4

It looks like mtgox decided to transfer about 6.4% of all bitcoins in existence again just to show they still have them:
http://forum.bitcoin.org/index.php?topic=21436.0

[1713557980]

1713557980

[1713557980]

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[1713557980]

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[BitMofo]

Yeahhh... I think the main risk of bitcoin is governments deeming it illegal. Yes it would still be able to operate (like bittorrent etc) but it would not take off like it should

[lame.duck]

The market will sort the problem out.  Regulation would just destroy potential start ups.  Non-creation because of regulation is an opportunity cost that is impossible to measure; but it is almost certainly a huge loss to economies.

Oh well, thats true, especially for nuclear power plants, air lines, medical services and so on i guess. In fact there are regulations made just for keeping out newcomers, but a far bigger problem seems to me that the existing and 'good' regulations will not be controlled and enforced by the rasponsible entities.

[Hawker]

I'm not sure OP has understood the nature of bitcoin.  Having one exchange subject to investigation is a global decentralised system doesn't matter at all.  Provided they repay their debts when they re-open, mgtox will be fine. 

[dizznizzle]

You aren't required to use the exchange services.

[memvola]

The frankly hilarious incompetence with which MtGox has been operating cannot be allowed to continue. Regulation, no matter what some of you seem to think of it, exists for a reason, and it is to prevent things such as this. Had there been accurate reporting, disclosure, meeting of capital requirements, self-regulatory structure and organization, safeguards against market manipulation, and so on, perhaps this all could have been avoided.

What would be avoided exactly? Hacking of accounts?

And really, yes, I did speak with the FSA. If Mark has complied with all applicable laws, then everything will be fine. But I assure you, they will be investigating.

This can only help make the road more bumpy. If the problem were about their capital, sure, but I think in this case you are way off. Why would anyone try to make it harder for them to recover is beyond me. At least in this case, the problem is not what you think it is. I suggest that instead of trying to prevent crimes, which you can't by more regulation, maybe you could focus on what the crime is and who committed it.

Of course, in your line of thinking, we could regulate the Internet to prevent such attacks ever happening. That would solve all our problems, wouldn't it?

EDIT: And yes, they have locked my account with a considerable amount of dollars in it and unreasonably rejected my claim. Yes, I find it rather incompetent. No, I wouldn't prefer them not ever existing in the first place. Let me choose who to trust. Maybe if this "regulation" authority were an NGO and give a badge of sorts to complying exchanges, that would make some sense?

[BTC Economist]

Regulation is not needed.

Mt.Gox will be regulated by the market.  As we'll see when it eventually opens.

Some will leave, some will stay.  But it will be in exact proportion to the damage each individual feels, and the risk they are subsequently willing to take.

As we all learn lessons about risk in a bitcoin economy, those lessons will lead people to ask more difficult questions of their exchanges.  The poor performance of Mt.Gox has left a huge market opportunity for an exchange that posts incredibly strong security policies, detailed descriptions of internal operations, and even publication of exchange source code.

The market will sort the problem out.  Regulation would just destroy potential start ups.  Non-creation because of regulation is an opportunity cost that is impossible to measure; but it is almost certainly a huge loss to economies.

However, I suspect that the OP is just a troll, and missed out the obligatory, "so you should all sell your bitcoins as quickly as possible when Mt.Gox opens."

This is hilarious.  The market will regulate Mt. Gox??  Really?  You must really assume everyone is benevolent then.  Mt. Gox will surely be happy to steal all the bitcoins in the absence of regulation.  I suspect that will be the next bitcoin crisis.  No hacker next time.  Just the exchange running off with the money and bitcoins.

[BTC Economist]

Regulation, no matter what some of you seem to think of it, exists for a reason, and it is to prevent things such as this.

Regulation, no matter what you naively believe, exists to get rid of annoying competition, concentrating market shares and income.

Learn about "public choice", the first 20 seconds of this video might enlighten you a bit: http://www.youtube.com/watch?v=6uR4lqa7IK4
Regulations cause that effect much more effectively and transparently ("disguisedly") than simple government spending.

Anyway, you probably won't care, I'm probably losing my time here.

Had there been accurate reporting, disclosure, meeting of capital requirements, self-regulatory structure and organization, safeguards against market manipulation, and so on, perhaps this all could have been avoided.

Yeah, pretty much like the much more serious hack of Sony was avoided, right?

Go to school.  Youtube is not an education.

[BitcoinPorn]

I cannot post outside this area, but perhaps some of you might benefit from what I have to say.

I work in finance for an international NGO and have been watching this bitcoin saga unfold with some academic curiosity and no small level of entertainment. I have no problems with bitcoin as a concept, and the agencies and governments I work with have little concern aside from its potential use as a medium for money laundering, though even in this respect it is still a very minor one given the tiny size of the bitcoin economy relative to that of other illicit financial activities. On the list of priorities, it isn't. So you all have no need for worry there from what I have heard.

However.

This is a world with laws. The frankly hilarious incompetence with which MtGox has been operating cannot be allowed to continue. Regulation, no matter what some of you seem to think of it, exists for a reason, and it is to prevent things such as this. Had there been accurate reporting, disclosure, meeting of capital requirements, self-regulatory structure and organization, safeguards against market manipulation, and so on, perhaps this all could have been avoided. It is for this reason that I contacted a colleague with the Japanese Financial Services Agency, who will be investigating MtGox for operating in violation of the Financial Instruments and Exchange Law. Their criminal negligence will end up costing many of you money; hopefully my warning here and swift action by the Japanese authorities will minimize that.

Enjoy.

Recipe for laughter.   Read the above post IN THIS VOICE

[Clipse]

I cannot post outside this area, but perhaps some of you might benefit from what I have to say.

I work in finance for an international NGO and have been watching this bitcoin saga unfold with some academic curiosity and no small level of entertainment. I have no problems with bitcoin as a concept, and the agencies and governments I work with have little concern aside from its potential use as a medium for money laundering, though even in this respect it is still a very minor one given the tiny size of the bitcoin economy relative to that of other illicit financial activities. On the list of priorities, it isn't. So you all have no need for worry there from what I have heard.

However.

This is a world with laws. The frankly hilarious incompetence with which MtGox has been operating cannot be allowed to continue. Regulation, no matter what some of you seem to think of it, exists for a reason, and it is to prevent things such as this. Had there been accurate reporting, disclosure, meeting of capital requirements, self-regulatory structure and organization, safeguards against market manipulation, and so on, perhaps this all could have been avoided. It is for this reason that I contacted a colleague with the Japanese Financial Services Agency, who will be investigating MtGox for operating in violation of the Financial Instruments and Exchange Law. Their criminal negligence will end up costing many of you money; hopefully my warning here and swift action by the Japanese authorities will minimize that.

Enjoy.

Welcome and good bye.

Seems like another fear mongering out look, you seem to approach it solely from the situation you are in and in some sense fearfull.

MTGOX had a stuffup and its being fixed. Please inform me of their criminal negligence, they did not steal funds from their own users and if your site gets hacked its a criminal offense by the hackers.

You seem to suggest that regulated institutions do not get hacked and robbed(usually at the cost of clients) , and no when this happens its usually diverted to the clients to prove they didnt disclose their own banking details which is next to impossible to prove or disprove.

Funniest part of your comment is the suggestion that this could be prevented with regulation, hahahahaha you may apply for a comedic job within the financial sector, regulation do not prevent hacking situations.

I think you should go back to your NGO and fiat currency and let us deal with our situations cause I see the whole fiat/bitcoin as two opposite fronts and eventually it will class and true colours will be exposed.

Oh and stop promising that you are leaving, just do it.

[goodlord666]

+1
gotta love the troll posts

[indicasteve]

Mt. Gox != bitcoin

http://www.google.com/trends?q=bitcoin%2C+Mt+gox&ctab=0&geo=all&date=mtd&sort=0

Google trends shows Mt. Gox is only 4% of bitcoin news.  Yawn.

You will FAIL at stopping anything sir.

[realnowhereman]

The market will sort the problem out.  Regulation would just destroy potential start ups.  Non-creation because of regulation is an opportunity cost that is impossible to measure; but it is almost certainly a huge loss to economies.

Oh well, thats true, especially for nuclear power plants, air lines, medical services and so on i guess. In fact there are regulations made just for keeping out newcomers, but a far bigger problem seems to me that the existing and 'good' regulations will not be controlled and enforced by the rasponsible entities.

The normal self-regulation framework of a market is that people vote with their feet.  It works fine.  The only time it doesn't is when a single failure is so catastrophic that there is noone left with feet.

Your examples are very special cases.  Personally, I wouldn't mind unregulated medical or air line companies.  Those that killed their customers wouldn't last long.  Depends how willing you are to risk other people's lives I suppose.  A nuclear power failure hurts more than just the customers of nuclear power though.

If I see a role for government it is this: it is their job to internalise economic externalities.  For nuclear power, it's obvious what the externality is: killing a bunch of people.  That needs to be made so economically painful that nuclear companies don't do it.

Banks, money exchanges, mop manufacturers, potato farmers on the other hand... they should all just be left to it.  Contract law and a populace that hasn't been trained to be children will sort those problems out.

[realnowhereman]

The market will sort the problem out.  Regulation would just destroy potential start ups.  Non-creation because of regulation is an opportunity cost that is impossible to measure; but it is almost certainly a huge loss to economies.

This is hilarious.  The market will regulate Mt. Gox??  Really?  You must really assume everyone is benevolent then.  Mt. Gox will surely be happy to steal all the bitcoins in the absence of regulation.  I suspect that will be the next bitcoin crisis.  No hacker next time.  Just the exchange running off with the money and bitcoins.

Yep.  People will decide Mt.Gox is useless (or not, their choice) and will go somewhere else.  That's pretty final as far as regulation goes.

You don't seem to get it: regulation by the market won't create a list of regulations that Mt.Gox must abide by; customers will simply stop using their service in favour of some other exchange that does provide what they want.

Mt.Gox stealing coins is not a regulatory issue; it's a criminal one.  No regulation would stop the theft you seem to worry about.

[0v3rki11]

I just wish people would stop trying to screw with my nerd money. >8|

[wamatt]

Mt. Gox != bitcoin

http://www.google.com/trends?q=bitcoin%2C+Mt+gox&ctab=0&geo=all&date=mtd&sort=0

Google trends shows Mt. Gox is only 4% of bitcoin news.  Yawn.

You will FAIL at stopping anything sir.

Actually it's more like 8% (mtgox versus mt gox). But still your point remains.

https://www.google.com/trends?q=bitcoin%2C+Mtgox&ctab=0&geo=all&date=mtd&sort=0

[jgraham]

The frankly hilarious incompetence with which MtGox has been operating cannot be allowed to continue. Regulation, no matter what some of you seem to think of it, exists for a reason, and it is to prevent things such as this. Had there been accurate reporting, disclosure, meeting of capital requirements, self-regulatory structure and organization, safeguards against market manipulation, and so on, perhaps this all could have been avoided.

I always have a certain degree of skepticism with the label-heavy and fact-free style of posting.   Ok, currently Mt. Gox is sticking to their story:

It appears that someone who performs audits on our system and had read-only access to our database had their computer compromised. This allowed for someone to pull our database. The site was not compromised with a SQL injection as many are reporting, so in effect the site was not hacked.

Submitting to an audit is an act of regulation.  There's no small irony in the fact that what you suggest was the vector of attack.  It's not unreasonable that had all the regulation you expected would have had precisely the same effect.   Why?  It's unlikely that the auditor requested usernames and passwords to be visible.  It simply was the easiest way to provide the data they auditor wanted was to give them access to everything.
 
Assuming Mt. Gox's story is true.  What actually caused the problem is likely a simple lack of policy.  Passwords don't go to auditors.  The idea that somehow all the things you mention would create a strong security policy is adorable in it's naivete.  If Shostack had a single point in his book The New School of Information Security it would be that only a vanishingly small percentage of data breaches are disclosed.   Ergo, there is no possible way you could know - in general - if the kind of regulation you suggest would have had a protective effect.       

[makomk]

Mt.Gox will be regulated by the market.  As we'll see when it eventually opens.

*snort* We've seen how well that works. Mt Gox has been massively, spectacularly negligent about security on multiple occasions, people appear to have lost money as a result, and look how much the market's actually punished them: it hasn't. Why not? Because no-one actually has access to the information required to tell for sure how secure Mt Gox actually is right now, so they end up making judgements based on gut feelings and justify them with arguments like "because Mt Gox has gotten hacked that means they're going to be more secure than exchanges that haven't been hacked repeatedly". This is actually a fairly well known problem with the free market and computer security issues.

[TheSpanishGuy]

Regulation is not needed.

Mt.Gox will be regulated by the market.  As we'll see when it eventually opens.

Some will leave, some will stay.  But it will be in exact proportion to the damage each individual feels, and the risk they are subsequently willing to take.

As we all learn lessons about risk in a bitcoin economy, those lessons will lead people to ask more difficult questions of their exchanges.  The poor performance of Mt.Gox has left a huge market opportunity for an exchange that posts incredibly strong security policies, detailed descriptions of internal operations, and even publication of exchange source code.

The market will sort the problem out.  Regulation would just destroy potential start ups.  Non-creation because of regulation is an opportunity cost that is impossible to measure; but it is almost certainly a huge loss to economies.

However, I suspect that the OP is just a troll, and missed out the obligatory, "so you should all sell your bitcoins as quickly as possible when Mt.Gox opens."

+1000000

[static]

I feel it is my duty to warn you all...

i just farted -

and it is strong enough to penetrate teh innanetz.