only $5 million seized from MtGOX - making fears of insolvency ATM SMALL

[joesmoe2012]

Dont' forget about whatever was in the WF account.

Also, how about the SWIFT deposits that were later reversed after gox credit customers accounts, bitcoins were bought and treansferred elsewhere...

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[wearepoor]

I dont believe that 2 to 3 million $ would make Gox delay withdrawals for as long as they have been.

Either their orderbook is a lie or there is another bigger issue/detail that has not been made public.

Maybe because any money sent to US bank from MtGox is in danger of being freezed 

[phelix]

$3 million was apparently seized from Dwolla accounts - what happens to it noone knows.

i'd like to bring to attention that mtgox made that much in fees in a month during that time period.

this means that most money is likely very safe and just unable to be withdrawn due to bank embargo or other issues facing them.
insolvency from that - not likely at all.

carry on bulls and bears.

of course everyone blames gox for everything - they are the big gorilla who's getting beat up bad. but, that gorilla may very well survive.

Gox is a pot of gold so I doubt they will really go boink.

But what about the lawsuit mess: http://gawker.com/massive-bitcoin-business-partnership-devolves-into-75-487857656 

[superduh]

$3 million was apparently seized from Dwolla accounts - what happens to it noone knows.

i'd like to bring to attention that mtgox made that much in fees in a month during that time period.

this means that most money is likely very safe and just unable to be withdrawn due to bank embargo or other issues facing them.
insolvency from that - not likely at all.

carry on bulls and bears.

of course everyone blames gox for everything - they are the big gorilla who's getting beat up bad. but, that gorilla may very well survive.

Gox is a pot of gold so I doubt they will really go boink.

But what about the lawsuit mess: http://gawker.com/massive-bitcoin-business-partnership-devolves-into-75-487857656 

no idea what will happen re that. however, that does not affect their going concern at the moment.

[ElectricMucus]

EM's PR tips for Gox:

Publish Bank statements of your USD funds, these don't have to include the funds you actually own just the ones of your clients.
Run a blog concerning all your current legal issues, you don't have to include every detail just keep everyone updated.
Change your system so that the amount of Bitcoin funds can be audited by everybody people need to know which addresses store their funds.
Don't ever invite Roger Ver again.

Common sense is, if things were all hunky dory, they would do just that.

Bullseye.

you could say the same thing to the FED

The thing is, their 'clients' didn't enter their Business relationship voluntarily. In principle you are right and it even sounds much to ask from a common business perspective (even for gox)
However I think we can and should set a higher standard. After all this is supposed the future of finance, isn't it?

[MAbtc]

EM's PR tips for Gox:

Publish Bank statements of your USD funds, these don't have to include the funds you actually own just the ones of your clients.
Run a blog concerning all your current legal issues, you don't have to include every detail just keep everyone updated.
Change your system so that the amount of Bitcoin funds can be audited by everybody people need to know which addresses store their funds.
Don't ever invite Roger Ver again.

Common sense is, if things were all hunky dory, they would do just that.

No they wouldn't. What company does that, ever? Owners/boards prefer not to operate like an open book. And Gox obviously doesn't want to invite the world to watch them bleed their business from the inside out any more easily than it already can by watching trade volume.

[superduh]

updated

[jubalix]

but gox prolly cant withdraw its own money (not)

however I am beginning to think that gox is fractional reserve USD and BTC....

I struggle to buy this can't withdraw usd any more"....its not plausible for some claiming xx million profit.

[Itcher]

Income of gox is in btc.

I have big respect for gox to continue business under these circumstances.

[Walsoraj]

am confused. so after gox's money was seized, they still credited trader accounts? that sound's stupid and possibly illegal.

[superduh]

am confused. so after gox's money was seized, they still credited trader accounts? that sound's stupid and possibly illegal.

they are a japanese company. what's so hard to understand? does every company in the world have to abide by USA's arbitrary decisions. please explain your "logic"

[TitanBTC]

Income of gox is in btc.

I have big respect for gox to continue business under these circumstances.

It's a pretty profitable business from what we can tell.  If I was MagicalTux, you would have to pry my cold dead hands off of the helm.  I'm sure they have investors that are pretty tenacious in the face of risk too, given their decision to invest in a currency that is still wading through regulatory muck worldwide.

[Qoheleth]

am confused. so after gox's money was seized, they still credited trader accounts? that sound's stupid and possibly illegal.

This is not about the money in Japan that is supposedly backing user accounts.

This is about the money in the Dwolla account owned by "Mutum Sigillum LLC" which was being used to process Dwolla withdrawls and deposits. It was seized because Mutum Sigillum LLC is a US company not registered as a money transmitter, but which was acting as a money transmitter by being the middleman between Gox and its customers.

Turns out - apparently - that that Dwolla account only contained $5 million, which means that (putting aside for the moment whatever else might be questionable about Gox's situation) most of the funds are still in their Japanese bank accounts. Of course, at currently reported volumes, Gox is only making like $200k-800k a month, so that's still a troubling loss.

[Walsoraj]

am confused. so after gox's money was seized, they still credited trader accounts? that sound's stupid and possibly illegal.

This is not about the money in Japan that is supposedly backing user accounts.

This is about the money in the Dwolla account owned by "Mutum Sigillum LLC" which was being used to process Dwolla withdrawls and deposits. It was seized because Mutum Sigillum LLC is a US company not registered as a money transmitter, but which was acting as a money transmitter by being the middleman between Gox and its customers.

Turns out - apparently - that that Dwolla account only contained $5 million, which means that (putting aside for the moment whatever else might be questionable about Gox's situation) most of the funds are still in their Japanese bank accounts. Of course, at currently reported volumes, Gox is only making like $200k-800k a month, so that's still a troubling loss.

Yea but that dwolla account did contain trader funds that were on their way to the japanese bank, right? Those funds didn't make it to the bank. So, did Gox credit the traders, at its own expense?

[joesmoe2012]

am confused. so after gox's money was seized, they still credited trader accounts? that sound's stupid and possibly illegal.

This is not about the money in Japan that is supposedly backing user accounts.

This is about the money in the Dwolla account owned by "Mutum Sigillum LLC" which was being used to process Dwolla withdrawls and deposits. It was seized because Mutum Sigillum LLC is a US company not registered as a money transmitter, but which was acting as a money transmitter by being the middleman between Gox and its customers.

Turns out - apparently - that that Dwolla account only contained $5 million, which means that (putting aside for the moment whatever else might be questionable about Gox's situation) most of the funds are still in their Japanese bank accounts. Of course, at currently reported volumes, Gox is only making like $200k-800k a month, so that's still a troubling loss.

This is full of a factual inaccuracies.

The 200-800k was calculates very roughly and is likey incorrect. Tux said they made 8mil in April I can't imagein them only making 10% of that last month....

Aso, dwolla account contained approximately 2.9mil, not 5.  The WF account had an additional 2.1 mil. Mark also had a personal account at WF that he was also likely using for customer funds, which we don't know the seized value of.

[Qoheleth]

The 200-800k was calculates very roughly and is likey incorrect. Tux said they made 8mil in April I can't imagein them only making 10% of that last month....

I'll admit that I was wrong about some stuff in that post. But as far as Mt. Gox's profit margins, you've got to remember that Mt. Gox makes their money in commissions per volume, and volume has dropped dramatically since April (when most of the bubble activity was going on).

Assuming everyone's paying full fees, and going by the volume from April as seen on bitcoincharts, 8 million sounds about right - they're grossing about 5.5 million from USD, 1.8 million from EUR, and some more change from less popular trading pairs. But, again, that's April. Current volume is like 15-20% of what it was at that time ($75M worth of exchanges in mtgoxUSD), which means that, yes, my $200-800k estimate was wrong. It's more like $1.5M this month.

That still means 3-4 months where all your money is going towards recuperating the cash that was seized.

[crazy_rabbit]

The 200-800k was calculates very roughly and is likey incorrect. Tux said they made 8mil in April I can't imagein them only making 10% of that last month....

I'll admit that I was wrong about some stuff in that post. But as far as Mt. Gox's profit margins, you've got to remember that Mt. Gox makes their money in commissions per volume, and volume has dropped dramatically since April (when most of the bubble activity was going on).

Assuming everyone's paying full fees, and going by the volume from April as seen on bitcoincharts, 8 million sounds about right - they're grossing about 5.5 million from USD, 1.8 million from EUR, and some more change from less popular trading pairs. But, again, that's April. Current volume is like 15-20% of what it was at that time ($75M worth of exchanges in mtgoxUSD), which means that, yes, my $200-800k estimate was wrong. It's more like $1.5M this month.

That still means 3-4 months where all your money is going towards recuperating the cash that was seized.

Which, in the big scheme of things for company isn't really so bad. It sucks for sure, but if it takes only 1 business quarter to right your ship, then you just suck it up and move on. Not to mention they might get that money back at some point.

[masterluc]

It is not critical to loose 5M for gox - if it were hidden looses. But since they are public it may activate chain panic withdrawals,  which is almost always death for money transmitter business.

[marcovaldo]

It is not critical to loose 5M for gox - if it were hidden looses. But since they are public it may activate chain panic withdrawals,  which is almost always death for money transmitter business.

mt.gox has not been processing withdrawals (usd) for months.

[Endgame]

It is not critical to loose 5M for gox - if it were hidden looses. But since they are public it may activate chain panic withdrawals,  which is almost always death for money transmitter business.

There is also the problem that having 5M frozen/seized by the government is going to be really harmful to their banking relationships, which could end up hurting them a lot more than the initial seizure.