MTGOX has not paid us since 26th of June!

[KarmaShark]

They have nothing to say at all about withdrawals in section of press release titled Deposits and Withdrawal Update . I, personally, find it reasonable to assume the worst.  The only good reason I can give for a business that takes deposits but effectively withholds withdrawals without any plausible explanations is insolvency.

Dear Mt. Gox are you insolvent? If not, then WTF?

Agreed.


For any of you who have fiat currently being held with MtGox, I ask you to take a few minutes out of your day right now to run through this quick thought experiment with me. Honestly, we'll do it together right now:

1. Mt Gox has been hammered with DHS account seizure, Coinlab lawsuit as well as a host of other external and internal banking, hardware and software related issues. All of this is public information, the only question that remains is the current impact from the banking issues which triggered this Spring.


2. Mt Gox has had plans to implement alternative crypto currencies since April of this year. The amount of work required to implement another order book, make some UI and database changes is relatively simple and quick. Since we know Mt Gox has gone one step further and introduced Midas, we can add another 2-4 weeks for integration / load / compatibility testing. We are now at August 8th, 2013 with no timetable for any alternative currencies being added.

There is no logical explanation why Mt Gox would require 4.5 months and counting to add and fully support another currency pair, even if that pairing has fiat on one side. The amount of money to be earned in trading fees based on volume would be enough to create a financial incentive to add Litecoin and Namecoin ages ago. If there was another legitimate reason for 4.5 months delay on this, they would have made a 10-minute Flash video in hopes of stemming the bleeding market share. 


3. Now we have 3+ month long delays in USD withdrawals. As anger and speculation grows while market share continues to bleed, Mt Gox says little to nothing on the issue. At the start of this month. Mt Gox releases a statement containing several key updates. The biggest update is of course the ever-growing withdrawal issue. Because Mt Gox has made this point so clearly for me, I will let them finish off my point on their deposit and withdrawal situation:


Deposits and Withdrawal Update

Finally, the issues with deposits and withdrawals from Mt. Gox are being relieved, but still not at the rate we want. For example it currently takes up to 10 days to process a deposit because our bank, upon receiving deposits, notifies us of the deposit but holds them for 7~10 days before transferring them to our account. This has always been the case, and we were still crediting customer accounts before receiving the funds ourselves, but some cases in which the bank subsequently rejected the deposits meant that we incurred significant losses. The risk is now too high for us to credit accounts prematurely. We are in the process of forming relationships with new partners, banks, and taking other steps -- hopefully we will not only be back where we were before we encountered these issues , but much further ahead.


After month over month of increasing market share loss, Mt Gox sat down in the board room and decided what they would say about USD withdrawals, and how they would say it to you. This is what they came up with.

Now, to wrap up this thought experiment. After taking all of these factual points into your consideration, do you believe Mt Gox is solvent? Are these the actions of a company that has made a concious decision to stay in business and grow their customer base?  Be honest with yourself, it may save you some money and ฿.

[Nagle]

They have nothing to say at all about withdrawals in section of press release titled Deposits and Withdrawal Update . I, personally, find it reasonable to assume the worst.  The only good reason I can give for a business that takes deposits but effectively withholds withdrawals without any plausible explanations is insolvency.

Dear Mt. Gox are you insolvent? If not, then WTF?

Agreed.

For any of you who have fiat currently being held with MtGox, I ask you to take a few minutes out of your day right now to run through this quick thought experiment with me. Honestly, we'll do it together right now:
...
Now, to wrap up this thought experiment. After taking all of these factual points into your consideration, do you believe Mt Gox is solvent? Are these the actions of a company that has made a conscious decision to stay in business and grow their customer base?  Be honest with yourself, it may save you some money and ฿.

Those are the actions of a company that's broke and is desperately trying to delay the inevitable. As the SEC says on their Ponzi scheme page: "Be suspicious if you don’t receive a payment or have difficulty cashing out your investment." That's a huge red flag.

[TimJBenham]

Now, to wrap up this thought experiment. After taking all of these factual points into your consideration, do you believe Mt Gox is solvent? Are these the actions of a company that has made a concious decision to stay in business and grow their customer base?  Be honest with yourself, it may save you some money and ฿.

I don't know if they are solvent or not, but the idea that they are insolvent in USD but solvent in BTC makes no sense.

[zby]

My current theory is that they have their main account frozen and this is why they changed the bank account details for deposits recently.  What is deposited into the new account they use for paying someone from the withdrawals queue - but the queue is only growing anyway.

The question is why their account got frozen - I don't know - maybe it was just some bureaucratic failure (like that one when Karpeles declared MtGox noto be a a money transmitter in the USA) - or maybe it is some lawsuit (maybe even it is the effect of MtGox not releasing the Bitcoinica funds to the debtors).

[Nagle]

My current theory is that they have their main account frozen and this is why they changed the bank account details for deposits recently.

That's not what Mt. Gox is saying.

Mt. Gox has a track record of blaming others for their own screwups. If they could blame some bank for their current problems, they probably would.

It's much more likely that they're simply broke.

[CYPER]

It's much more likely that they're simply broke.

How can you become broke when you were handling 80% of all Bitcoin transaction?
They were making millions in profit.

[solex]

It's much more likely that they're simply broke.

How can you become broke when you were handling 80% of all Bitcoin transaction?
They were making millions in profit.

I don't think they are broke, I think they are being blacklisted by the fiat banking system because of US regulatory pressure due to the FinCen investigation (which was probably from a tip-off because of the failed merger and $75m lawsuit).

Some banks are still begrudgingly doing business with them on a low-volume basis treating MtGox with the caution normally reserved for Iranian mullahs, Nigerian finance houses and Colombian plantation owners.

[bitcon]

was able to get my USD converted back to BTC and off of gox.  goodbye gox.

[tiptopgemdotcom]

It's much more likely that they're simply broke.

How can you become broke when you were handling 80% of all Bitcoin transaction?
They were making millions in profit.

I don't think they are broke, I think they are being blacklisted by the fiat banking system because of US regulatory pressure due to the FinCen investigation (which was probably from a tip-off because of the failed merger and $75m lawsuit).

Some banks are still begrudgingly doing business with them on a low-volume basis treating MtGox with the caution normally reserved for Iranian mullahs, Nigerian finance houses and Colombian plantation owners.

This is the most logical explanation I have seen yet.  Indeed, anyone who leaves $ or bitcoin in gox right now is accepting enormous risk.

[mp420]

It's much more likely that they're simply broke.

How can you become broke when you were handling 80% of all Bitcoin transaction?
They were making millions in profit.

I don't think they are broke, I think they are being blacklisted by the fiat banking system because of US regulatory pressure due to the FinCen investigation (which was probably from a tip-off because of the failed merger and $75m lawsuit).

Some banks are still begrudgingly doing business with them on a low-volume basis treating MtGox with the caution normally reserved for Iranian mullahs, Nigerian finance houses and Colombian plantation owners.

This. My back-of-the-envelope calculation says they will lose money if their trade volume stays under $1M per day, however. They've had to scale up their business because of the crazy volumes at the height of the April bubble, and they managed to catch the attention of the banking circles. Now they're trapped between no bank wanting to do business with them and fairly high operating costs. I'd hazard a guess that their op costs (including wages) are several hundred thousand dollars monthly.

Even if they lose money it's going to take some time to burn through the insane amounts they made during the bubble. They probably have tens of millions in reserve.

[mp420]

Not correct.  Mt. Gox projected income is $4.5 MM from Jan to June.  Now consider new employee hires, dropping volume to January lows, and attorney costs.  That cash won't last long. 

http://thegenesisblock.com/mt-gox-withdrawal-freeze-driving-significant-liquidity-concerns/

All right, probably not tens of millions.

Still, $4.5M + over 50kBTC is a lot of money. Don't forget the BTC-denominated fees. And they might have a lots of BTC left over from earlier too.

[TimJBenham]

Let's hope they still have the Bitcoinica funds in reserve.

[KarmaShark]

Now, to wrap up this thought experiment. After taking all of these factual points into your consideration, do you believe Mt Gox is solvent? Are these the actions of a company that has made a concious decision to stay in business and grow their customer base?  Be honest with yourself, it may save you some money and ฿.

I don't know if they are solvent or not, but the idea that they are insolvent in USD but solvent in BTC makes no sense.

Mt Gox undoubtedly has reserves of both USD and ฿. This starts to get real ugly when a critical amount of customers attempt to take ฿ off the exchange and further erode liquidity. This can only go on for so long, the next four weeks will be telling.


 

[niko]

Most likely the problem is with the US bankers "freezing" their US-dollar funds. Add to this the similar seizure by the US government of their Dwolla funds, and the pending $75 million lawsuit by the US-based CoinLab, and picture is bleak... for the US dollar exchange. There is more to money than the US dollar.

The OP is based in Europe. Why not deal in Euros? Or the Swiss Francs? You can either bend over for Uncle Sam and enjoy the ride without whining, or choose different currencies and again quit whining. The liquidity is what it is. Make it better. Quit whoring yourselves to the bandits.

[bitcoinsnowaustralia]

This is a huge problem.  When you run a business, you expect that your partners will act with integrity.  Here is what they have to say:

“It currently takes up to 10 days to process a deposit because our bank, upon receiving deposits, notifies us of the deposit but holds them for 7-10 days before transferring them to our account. This has always been the case, and we were still crediting customer accounts before receiving the funds ourselves, but some cases in which the bank subsequently rejected the deposits meant that we incurred significant losses.

“The risk is now too high for us to credit accounts prematurely. We are in the process of forming relationships with new partners, banks, and taking other steps — hopefully we will not only be back where we were before we encountered these issues, but much further ahead.”




This is simply a lie.  If what they are saying is true, then in 20 days you would be paid.  Obviously Swiss Enterprises has not been paid within 20 days and there are others on this forum in a similar situation.  This needs to stop.  All signs point to liquidity problems at Mtgox and this destroys confidence in bitcoin as a whole.

We have deposits that were sent over 30 Days to MTGOX still not credited to our account, it used to take 48 hours.

So besides the Withdrawal problem it seems theyre having DEPOSIT issue's IE not crediting accounts!

[solex]

We have deposits that were sent over 30 Days to MTGOX still not credited to our account, it used to take 48 hours.

So besides the Withdrawal problem it seems theyre having DEPOSIT issue's IE not crediting accounts!

Are these US$ deposits? (or AU$)

[Mooshire]

I smell a lawsuit, and I want one too.

[bitcoinsnowaustralia]

We have deposits that were sent over 30 Days to MTGOX still not credited to our account, it used to take 48 hours.

So besides the Withdrawal problem it seems theyre having DEPOSIT issue's IE not crediting accounts!

Are these US$ deposits? (or AU$)

AU converted and sent as USD to their new bank details they provided after the withdraw mess started.

[solex]

We have deposits that were sent over 30 Days to MTGOX still not credited to our account, it used to take 48 hours.

So besides the Withdrawal problem it seems theyre having DEPOSIT issue's IE not crediting accounts!

Are these US$ deposits? (or AU$)

AU converted and sent as USD to their new bank details they provided after the withdraw mess started.

Ah, so even their new banks are spooked by the regulatory investigation. All this bleating about how the volume of wires overwhelmed their old bank is just complete eyewash. As MtGox provides an AUD orderbook and must have AUD accounts, perhaps the deposit would have arrived if it remained entirely in AUD, and did not touch a US-domiciled correspondent bank. Of course they would never help their customers by advising them as to which currencies can be sent without delays.

[zby]

We have deposits that were sent over 30 Days to MTGOX still not credited to our account, it used to take 48 hours.

So besides the Withdrawal problem it seems theyre having DEPOSIT issue's IE not crediting accounts!

Are these US$ deposits? (or AU$)

AU converted and sent as USD to their new bank details they provided after the withdraw mess started.

Ah, so even their new banks are spooked by the regulatory investigation. All this bleating about how the volume of wires overwhelmed their old bank is just complete eyewash. As MtGox provides an AUD orderbook and must have AUD accounts, perhaps the deposit would have arrived if it remained entirely in AUD, and did not touch a US-domiciled correspondent bank. Of course they would never help their customers by advising them as to which currencies can be sent without delays.

I don't think that keeping it in AUD would make any change - I was fooled to sell my bitcoins into PLNs because MtGox was saying that the problem is only about USD - but guess what - after 1.5months of waiting I had to cancel the withdrawal and withdraw it via bitcoins.