0.25 BTC Bounty - Show me a Mt Gox USD Withdrawal :)

[TsuyokuNaritai]

Is this why BTCUSD is higher on Gox than on Stamp/Btce?

Yes. The BTC themselves are basically the same, it's the dollars that the market has decided are worth less right now if they're on Gox.

[1713565152]

1713565152

[1713565152]

1713565152

[abrkn]

　

[notme]

No, I don't find it odd that people wiring money out of Gox don't come report to you.  Their money is non of your business.  You guys are paranoid.

But, let's assume you are right for a second.  What are you going to do?  If I believed what you believe, I would cancel my withdrawal request, buy bitcoins, and get as far away from MtGox as possible.  If you still have money at MtGox with your beliefs you are an idiot.  If you don't have money with MtGox, then why the fuck are you trying to whip people into a panic instead of going about your business.  Or is trading on MtGox the only reason you are here?  If so, go find something productive to do to help develop the bitcoin economy or GTFO.

It is not about believing or not - it is about assigning probability to this event.  The probability grows and it makes me uncomfortable - I did move out most of my funds already and I am pretty happy with my overall profits, but this situation is still rather unnerving for me.

Then don't use Gox.... you've been around long enough to know their history.  This shouldn't surprise you.

[Nagle]

So a USD is worth less on Gox than on Stamp, implying they may not cash you out? At this time, the difference is so large we're not talking future value of money, but a scare of never being able to fully withdraw?

Exactly.  And the spread between Mt. Gox and the other exchanges is growing.  Last week it was around 5%. Now it's around 10%.

This is going to create a Bitcoin price distortion as more suckers become aware that Mt. Gox has defaulted. Mt. Gox prices may continue to rise. But they're not real prices at which you can sell Bitcoins, because you can't get the money out. Bitcoin to USD prices are only real on exchanges where you get paid when you sell.

[zeroblock]

Is this why BTCUSD is higher on Gox than on Stamp/Btce?

In all likelihood, yes.

So a USD is worth less on Gox than on Stamp, implying they may not cash you out? At this time, the difference is so large we're not talking future value of money, but a scare of never being able to fully withdraw?

Precisely.  And that risk has been quantified in the 10% premium for USD (buying BTC on Gox & selling on Bitstamp).  I see that spread jumping in the next week or two as traders realize that Gox is insolvent.  It will happen suddenly.  And when it does, a huge spread will develop between Gox and Bitstamp prices, until BTC on Gox reaches $1,000-$10,000 USD as no one is willing to sell BTC.  

What Gox could be doing is having an account open at Bitstamp, buying BTC there, selling BTC on their own exchange, then cycling the profits back to their Bitstamp account.  Rinse, repeat.  And as the price gets higher and higher on their own exchange, they could be selling BTC they acquired on Bitstamp to the desperate buyers on Gox, forcing everyone to liquidate fiat for BTC right into Gox's wallet.  While this may keep Gox liquid, they will still be unable to process USD as they do not have their money transmitter license.  

[gizmoh]

Is this why BTCUSD is higher on Gox than on Stamp/Btce?

In all likelihood, yes.

So a USD is worth less on Gox than on Stamp, implying they may not cash you out? At this time, the difference is so large we're not talking future value of money, but a scare of never being able to fully withdraw?

Precisely.  And that risk has been quantified in the 10% premium for USD (buying BTC on Gox & selling on Bitstamp).  I see that spread jumping in the next week or two as traders realize that Gox is insolvent.  It will happen suddenly.  And when it does, a huge spread will develop between Gox and Bitstamp prices, until BTC on Gox reaches $1,000-$10,000 USD as no one is willing to sell BTC.  

What Gox could be doing is having an account open at Bitstamp, buying BTC there, selling BTC on their own exchange, then cycling the profits back to their Bitstamp account.  Rinse, repeat.  And as the price gets higher and higher on their own exchange, they could be selling BTC they acquired on Bitstamp to the desperate buyers on Gox, forcing everyone to liquidate fiat for BTC right into Gox's wallet.  While this may keep Gox liquid, they will still be unable to process USD as they do not have their money transmitter license.  

And then what, close business! cause clients would leave Gox if they let this situation persist without further clarification.
No doubt this will be seen by the pro's and denounced. For the moment there is no large buys going on Bitstamp,until then we can conclude this to be science fiction.

[St.Bit]

And that risk has been quantified in the 10% premium for USD (buying BTC on Gox & selling on Bitstamp).

Without a possible way to arbitrage there is no way to reduce that premium without a huge longterm investment so I wouldn't say risk has so much to do with it since even if this way were riskfree those 10% couldn't vanish easily since a lotof people want out.

Nevertheless this is very alarming and if Mt.Gox really gets insolvent it will have a huge impact on the demand of bitcoins.

[OhShei8e]

Without a possible way to arbitrage there is no way to reduce that premium without a huge longterm investment so I wouldn't say risk has so much to do with it since even if this way were riskfree those 10% couldn't vanish easily since a lotof people want out.

Gox has enough Bitcoins to use the abitrage if they want and they probably do. There's so much blind panic. Who sells currently on Gox larger stocks if not even Gox? If the people fall into panic, Gox can sell at high prices. They have hundreds of thousands in the back. Your bankruptcy scheme is logically not conclusive. Gox can not be killed by a bank run. People only hurt themselves when they behave irrationally. If you want to punish Gox, forget it.

[OhShei8e]

Nevertheless this is very alarming and if Mt.Gox really gets insolvent it will have a huge impact on the demand of bitcoins.

The insolvency of Gox is total bullshit. You have to be blinded by fear to believe this. In two weeks no one talks about this thing and all flow back to Gox. Greedy and stupid as ever.

[zeroblock]

Is this why BTCUSD is higher on Gox than on Stamp/Btce?

In all likelihood, yes.

So a USD is worth less on Gox than on Stamp, implying they may not cash you out? At this time, the difference is so large we're not talking future value of money, but a scare of never being able to fully withdraw?

Precisely.  And that risk has been quantified in the 10% premium for USD (buying BTC on Gox & selling on Bitstamp).  I see that spread jumping in the next week or two as traders realize that Gox is insolvent.  It will happen suddenly.  And when it does, a huge spread will develop between Gox and Bitstamp prices, until BTC on Gox reaches $1,000-$10,000 USD as no one is willing to sell BTC.  

What Gox could be doing is having an account open at Bitstamp, buying BTC there, selling BTC on their own exchange, then cycling the profits back to their Bitstamp account.  Rinse, repeat.  And as the price gets higher and higher on their own exchange, they could be selling BTC they acquired on Bitstamp to the desperate buyers on Gox, forcing everyone to liquidate fiat for BTC right into Gox's wallet.  While this may keep Gox liquid, they will still be unable to process USD as they do not have their money transmitter license.  

And then what, close business! cause clients would leave Gox if they let this situation persist without further clarification.
No doubt this will be seen by the pro's and denounced. For the moment there is no large buys going on Bitstamp,until then we can conclude this to be science fiction.

Traders have let this persist for almost 1-2 months with lies and more lies.  The pro's have seen it, why do you think there is such a large spread between Gox and Bitstamp? And why do you think Gox's market share has dropped dramatically in the last 2-3 months?  

[Kouye]

Funny thing is once every one made it out from gox with BTC, gox is dead and will not likely revive.
Very interesting times are about to come.

I'm too lazy to check, but is there any "will bitcoin survive gox failure ?" bet anywhere ?  

[OhShei8e]

Funny thing is once every one made it out from gox with BTC, gox is dead and will not likely revive.

Then they would have changed there BTC to FIAT for astronomical exchange rates.

[Kouye]

Then they would have changed there BTC to FIAT for astronomical exchange rates.

Except they don't own any BTC ? Or do you have any insight to share ? 

[St.Bit]

Gox can not be killed by a bank run.

That's just plain stupid.

A lot of their money is seized by the Feds and if people run on MtGox they are done. If people want move their funds to other exchanges they won't be able to convert all fiat to BTC since the spread would explode and Mt.Gox already doesn't process USD withdrawls. It doesn't matter that they own the freezed accounts, if customers demand a payout and they can't serve all that's insolvency.

They have enough other problems (Coinlab, Feds, ...) to be at risk, but the 10% premium and this threat could easily trigger one in addition.

[dave111223]

I'm too lazy to check, but is there any "will bitcoin survive gox failure ?" bet anywhere ?  

IMHO if Gox is dying their actions have been in the best interested of Bitcoin.

Let's say they realize they are insolvent and no way to pay back:

Option 1) They suddenly announcement their bankruptcy in their "prime" while having a 70%+ market share.  Bitcoin would have absolutely bombed (we are talking single digits)

Option 2) They stall/delay/lie over the period of several months and their market share slowly disperses to other exchanges.  Users slowly get used to the fact that Gox might be in trouble.  After a while people expect that Gox is in trouble.  By the time they finally announce their bankruptcy everyone will be expecting it, and while their will be a lot of any people still left in that 40% market share, and it will affect the price of Bitcoin as a whole, it will not be anywhere near the disastrous results of option 1.


Option 1 is no doubt the best for their customers though, as they could distribute their remaining assets and everyone takes a haircut, with option 2 a lot of people would take a total loss.

[solex]

Any news on the London Bitcoin exchange which has been mentioned by Max Keiser and others?

A fully professional exchange is sorely needed.

[Spaceman_Spiff]

Any news on the London Bitcoin exchange which has been mentioned by Max Keiser and others?

A fully professional exchange is sorely needed.

Indeed, trustworthy exchanges are essential if we want to build a decent infrastructure in which normal businesses can add bitcoin as a payment mechanism and reliably get their fiat through bitpay-like intermediaries.

[zeroblock]

IMHO if Gox is dying their actions have been in the best interested of Bitcoin.

Absolutely incorrect.  Mt.Gox has time and time again lied and manipulated their customers.  First they had the CoinLab suit, where they didn't even try to keep their end of the agreement.  Second, they get their accounts frozen by DHS because Mark Karpeles said that his accounts were not being used for "currency trading, or money transmitting."  Third, US dollar withdraws are prohibited because Gox didn't bother to think about legal ramifications.  Oh and on top their inability to legally comply with any agreement or financial law, their trading engine had lag times of an hour at Bitcoins peak!  All they ever cared about was money, they never cared about improving their product, and they didn't care about their customers.  Who here can say they love Mt.Gox's support line?  Have you ever seen Gox at any of the Bitcoin conferences? 

Let's say they realize they are insolvent and no way to pay back:

Option 1) They suddenly announcement their bankruptcy in their "prime" while having a 70%+ market share.  Bitcoin would have absolutely bombed (we are talking single digits)

Yes, you are correct, but the other exchanges should be able to absorb some of the volume and mitigate a total collapse.
 

Option 2) They stall/delay/lie over the period of several months and their market share slowly disperses to other exchanges.  Users slowly get used to the fact that Gox might be in trouble.  After a while people expect that Gox is in trouble.  By the time they finally announce their bankruptcy everyone will be expecting it, and while their will be a lot of any people still left in that 40% market share, and it will affect the price of Bitcoin as a whole, it will not be anywhere near the disastrous results of option 1.

The only reason why the would be stalling is a.) they raided customer fiat accounts and are trying to bolster their liquidity through that or b.) they are using the spread to generate profit before their final collapse or until they become liquid again.  Oh and they still aren't legally allowed to send wires in the US, and they have a $75 MM lawsuit over their head! 

[bystander]

Video from Roger Ver on MtGox Finances to ease the communitys misplaced fears on MtGox Insolvency - http://www.youtube.com/watch?v=UP1YsMlrfF0

Thanks, it's probably the most awkward reading of statement I've seen a long, long time.   There was a time when anchor David Horowitz was asked to read a statement on air with the statement preparer right next to him.

[zby]

No, I don't find it odd that people wiring money out of Gox don't come report to you.  Their money is non of your business.  You guys are paranoid.

But, let's assume you are right for a second.  What are you going to do?  If I believed what you believe, I would cancel my withdrawal request, buy bitcoins, and get as far away from MtGox as possible.  If you still have money at MtGox with your beliefs you are an idiot.  If you don't have money with MtGox, then why the fuck are you trying to whip people into a panic instead of going about your business.  Or is trading on MtGox the only reason you are here?  If so, go find something productive to do to help develop the bitcoin economy or GTFO.

It is not about believing or not - it is about assigning probability to this event.  The probability grows and it makes me uncomfortable - I did move out most of my funds already and I am pretty happy with my overall profits, but this situation is still rather unnerving for me.

Then don't use Gox.... you've been around long enough to know their history.  This shouldn't surprise you.

At least it is still there - unlike Bitomat or bitcoinica or TradeHill or that german exchange (or Bitmarket - which is still around but does not return funds lost).  MtGox is incompetent - we know that - but if you think other exchages are any better - you are rather optimistic.  Also it is only recently that the volume on Bitstamp became practical.

Now I can move my funds out of MtGox with a 10% haircut - or I can wait and see if I don't lose them all - if the probability to lose them becomes greater than 10% the rational thing to do is move out, but even if it is less than 10% it still makes me nervous.