Bitcoin Forum
September 21, 2024, 10:00:28 AM *
News: Latest Bitcoin Core release: 27.1 [Torrent]
 
   Home   Help Search Login Register More  
Pages: « 1 2 3 [4]  All
  Print  
Author Topic: URGENT: What is next and legitimate on MtGox after the security issue?  (Read 7830 times)
Grant
Full Member
***
Offline Offline

Activity: 210
Merit: 100


View Profile
June 21, 2011, 06:04:50 AM
 #61

Having followed and covered the market since Oct 2010, I am concerned about all people investing / trading / loving bitcoins after what happened today.

There are a couple of questions:

1) Is it legitimate to rollback trades or should the exchange cover the risks?

2) What happens to people trading on the other exchanges who where negatively/positively affected by what happened at MtGox?

3) How / when should the market reopen?
Should orders of users on MtGox be put back where they were before the crash? or is it fairer to ask them whether they want or not?
... many more questions...

It would be great to have some people experienced in exchanges helping to get an unbiased assessment quickly - to protect all users, and to at least have a chance to re-establish some trust on bitcoins.

I am sad, because this was predictable and many including me have warned that we need better, more secure exchanges.




@1. If a trade is proven illegitimate it is perfectly fine for the exchange to rollback, to reduce the losses for everyone (including them).
@2. There were a few "halts" at the different exchanges which gave ppl time to cancel their limit orders. So IMO nothing happens.
@3. Mtox should CLEAR the entire orderbook before enabling trading again, otherwise it will screw anyone who had orders before it got halted (fundamentals have changed).
Veldy
Member
**
Offline Offline

Activity: 98
Merit: 10



View Profile
June 21, 2011, 06:12:15 AM
 #62

Look, I am not saying that rollbacks good or bad. I do not know this. I am just saying that this all will end in tears, either way, and lawyers will have a "field decade" over this.


Nah ... MtGox, in the U.S. as Mutum Sigillum LLC, would simply go bankrupt and pay what it could via the few lawsuits that resulted in awards.  There is no crime here [on the part of MtGox, at least not that I am aware of], and thus, it would be difficult to prosecute anyway.  It would almost certainly be a civil case as opposed to a criminal case.  Same probably goes for Japan, but I don't know how similar their legal system is to ours and how many people would sue them in Japan.  So, either MtGox survives and comes back [in some form large or small], or they close up, but as for legal; I think it would cost most people more than they would recover [in most cases probably hundreds of times more].  Of those remaining, the cases could be tied up for years if defended, but I think, legal or not, MtGox would likely just throw in the towel and pay until they fold rather than lawyer up and fight ... it is just two guys and an extremely sloppy and incompetent security analyst [supposedly .. never heard of the analyst until after it was suggested that they should have used one and after they blamed the breach on one ... anybody know who this analyst is?].  As an LLC with no criminal wrong doing [as far as I see it .. rolling back is unethical in my opinion], they are only liable for the assets of their company and not the assets of the share holders [owners] which is likely few or even one person.

If you have found my post helpful, please donate what you feel it is worth: 18vaZ4K62WiL6W2Qoj9AE1cerfCHRaUW4x
dr.bitcoin
Newbie
*
Offline Offline

Activity: 28
Merit: 0


View Profile
June 21, 2011, 07:10:56 AM
 #63

veldy, thanks for a competent opinion!
sturle
Legendary
*
Offline Offline

Activity: 1437
Merit: 1002

https://bitmynt.no


View Profile WWW
June 21, 2011, 01:13:28 PM
 #64

It is wrong to reverse honest trades (all other exchanges were affected and are not rolling back trades, nor should they.
Bitcoin-central wasn't effected, as far as I can see.  But this is not the point.  Any exchange would have done the same if a criminal got illegal access to a brokers funds, and sold them all to manipulate prices and create havoc in the market. The only difference is that most normal stock exchanges would halt trading automatically and investigate the situation as a soon as there was unusual activity with no known reason.  MtGox should behave like any other responsible exchange, and nullify the affected trades.  Other exchanges roll back trades more often than you think.  Even Bitcoin exchanges.  It has happened on Bitcoin-Market and Bitcoin7, at least.  Hopefully MtGox will implement a few safeguards for later as well, and pause trading for a while to investigate when it gets to hot.

Quote
Further there are significant complications around trades that occurred and bitcoin proceeds immediately withdrawn (which is what I always do).
Of course there are complications, which would have to be handled on a case to case basis.

Quote
Mtgox should simply pay the victim(s) back for their losses and be done with it (and take their lumps).
Did anyone lose anything?  People who traded at a loss on other exchanges based on a sudden change from 17.5 to 0 on mtgox should know better, IMHO.  I don't think you will many, with the exception of mtgox, who actually lost money on the rollback.  More likely a lot of people suffered a loss due to the unusual buying and withdrawals from stolen accounts during the previous days, but this would be impossible to prove.

Sjå https://bitmynt.no for veksling av bitcoin mot norske kroner.  Trygt, billig, raskt og enkelt sidan 2010.
I buy with EUR and other currencies at a fair market price when you want to sell.  See http://bitmynt.no/eurprice.pl
Warning: "Bitcoin" XT, Classic, Unlimited and the likes are scams. Don't use them, and don't listen to their shills.
andes
Jr. Member
*
Offline Offline

Activity: 42
Merit: 2


View Profile
June 22, 2011, 05:54:12 AM
 #65

Having followed and covered the market since Oct 2010, I am concerned about all people investing / trading / loving bitcoins after what happened today.

There are a couple of questions:

1) Is it legitimate to rollback trades or should the exchange cover the risks?

2) What happens to people trading on the other exchanges who where negatively/positively affected by what happened at MtGox?

3) How / when should the market reopen?
Should orders of users on MtGox be put back where they were before the crash? or is it fairer to ask them whether they want or not?
... many more questions...

It would be great to have some people experienced in exchanges helping to get an unbiased assessment quickly - to protect all users, and to at least have a chance to re-establish some trust on bitcoins.

I am sad, because this was predictable and many including me have warned that we need better, more secure exchanges.

I suggest you dont use bold text for your main text, as it makes it difficult to read.
Veldy
Member
**
Offline Offline

Activity: 98
Merit: 10



View Profile
June 22, 2011, 06:32:17 AM
 #66

Bitcoin-central wasn't effected, as far as I can see.  But this is not the point.  Any exchange would have done the same if a criminal got illegal access to a brokers funds, and sold them all to manipulate prices and create havoc in the market. The only difference is that most normal stock exchanges would halt trading automatically and investigate the situation as a soon as there was unusual activity with no known reason.  MtGox should behave like any other responsible exchange, and nullify the affected trades.  Other exchanges roll back trades more often than you think.  Even Bitcoin exchanges.  It has happened on Bitcoin-Market and Bitcoin7, at least.  Hopefully MtGox will implement a few safeguards for later as well, and pause trading for a while to investigate when it gets to hot.

What happens with stock exchanges is completely different.  There is a period of time over which the trade is, for lack of a better term [since I don't know what the term is], held proxy.  Depending upon the brokerage, if you buy a stock in the morning and then sell it in the afternoon, there is often a fee or a potential fee associated with that.  Bitcoin doesn't work that way and can't work that way [there is no such thing as a transaction reversal ... just a new transaction that where a trade could be opposite of the original thus leaving a net of 0BTC changing hands].  Even with a brokerage, your stock is available for sale immediately.  Unless an exchange requires you to leave your BTC and USD from trades in their exchange for a period of time to supposedly mitigate something like the crime that occurred, they can't solve that problem.  I for one do NOT trust my funds (BTC or USD) in Mt.Gox or really any exchange for any period of time.  I have been given every reason NOT to trust it to be held safely and every reason to move funds in and out as quickly as possible.

Of course there are complications, which would have to be handled on a case to case basis.

With high volume, we see how fast that can be done.  Volume is only going to increase.  Sorry, case by case is not a solution.

Did anyone lose anything?  People who traded at a loss on other exchanges based on a sudden change from 17.5 to 0 on mtgox should know better, IMHO.  I don't think you will many, with the exception of mtgox, who actually lost money on the rollback.  More likely a lot of people suffered a loss due to the unusual buying and withdrawals from stolen accounts during the previous days, but this would be impossible to prove.

Clearly people did since they have a claims page setup.  Also, private information was lost which is a clear breach of trust, and it was done via a breach of a security auditor's computer?!  Even if true, which I have significant doubt about, that auditor will NEVER have another client again.  The effect on the market is damage to some and benefit to others.  You claim they should know better.  How do you know that bitcoin isn't collapsing when you see something like this happening [say the government steps in and shuts down key network points to stop bitcoin trading and mining].  Nobody knows whether bitcoin will grow to a feasible online currency or go bust like previous virtual currencies.  It is riskier than the stock market BY FAR if you are investing money in it.  Tangible losses?  At least one person lost approximately $1000 worth of BTC it sounds like [at what USD price ... how many coins?].  It looks as if several accounts were used, so it seems several accounts suffered a loss.

If you have found my post helpful, please donate what you feel it is worth: 18vaZ4K62WiL6W2Qoj9AE1cerfCHRaUW4x
dr.bitcoin
Newbie
*
Offline Offline

Activity: 28
Merit: 0


View Profile
June 24, 2011, 07:26:53 AM
 #67

I have proof that names and bank accounts were compromised. MtGox did not answer my request for clarification on this matter,
Pages: « 1 2 3 [4]  All
  Print  
 
Jump to:  

Powered by MySQL Powered by PHP Powered by SMF 1.1.19 | SMF © 2006-2009, Simple Machines Valid XHTML 1.0! Valid CSS!