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Author Topic: Are my BTC safe in Mt.Gox?  (Read 1719 times)
muasktak10
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September 08, 2013, 10:06:18 AM
 #1

I bought my btc with fiat at gox and now I have bitcoins, is there any downside to just keeping my bitcoins on their site? I'm planning to hold for the long run, so i could see the potential downsides to not moving them to a personal wallet, what I don't know if one of those potential downsides is a complete loss of all "btc's" as accounted in my mtgox account.

I have 2fa.

The reason I ask is I see lots of people stating "everyone is getting their money/btc out of gox" But I'm not, so I'm either doing something stupid by just leaving them there, or I'm not as paranoid as the rest of people, and feel safe with mt.gox.

Anybody care to enlighten me?

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culexevilman
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September 08, 2013, 10:10:27 AM
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Since you asked, I guess its against my code not to tell you that by leaving BTC on a site wallet that you don't control, means basically those BTC arent yours and can and will be lost in the not so distant future when shit hits the fan at MTGOX.

There hope that helped you make an educated decision on what to do next.

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September 08, 2013, 10:12:37 AM
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Go to blockchain.info and create a wallet to move your coins to. Make sure its backed up. Then do some research into paper wallets/offline storage. Coins which you are holding for the long term, move offline.

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September 08, 2013, 12:30:42 PM
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No BTC is safe in Mt. Gox.
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September 08, 2013, 01:12:36 PM
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I think the Bitcoins in Mt.Gox are safer than the Dollars there.

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September 08, 2013, 10:07:07 PM
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If you don't have the keys, nothing is completely safe.  

Are coins mostly safe there for the moment?  Sure, but if you are not going to do anything with them at Mt. Gox, move them out to a wallet that you control, not some third party.  And that goes for any third party, not just Mt. Gox.  There is always a risk if someone else holds your coins because they are in control, not you.  And they may even have ownership, and just owe you them by contract.

Anyway, as long as you don't have the keys, there is always a risk.  If you need to move them back to Mt. Gox (or elsewhere) later for some reason, you know how easy it is to do so.  

It is better to avoid the risk if you are at all worried, and given that you asked, it seems you might be a little.  Just make sure that wherever you move the coins is safe.

edit: Tirapon has good advice above.


I bought my btc with fiat at gox and now I have bitcoins, is there any downside to just keeping my bitcoins on their site? I'm planning to hold for the long run, so i could see the potential downsides to not moving them to a personal wallet, what I don't know if one of those potential downsides is a complete loss of all "btc's" as accounted in my mtgox account.

I have 2fa.

The reason I ask is I see lots of people stating "everyone is getting their money/btc out of gox" But I'm not, so I'm either doing something stupid by just leaving them there, or I'm not as paranoid as the rest of people, and feel safe with mt.gox.

Anybody care to enlighten me?
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September 09, 2013, 08:27:06 AM
 #7

Also, please make sure that if you decide to store coins offline in a paper wallet (probably the safest option), make sure you do it yourself. Had someone posting a month ago or so, he had bought a paper wallet from another forum member - unfortunately he lost all his coins: the creator of the paper wallet had kept copies of the private keys.

Basically do your research properly and use some common sense. If you get stuck, there are plenty of helpful people here on the forums who can give you advice.

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mgio
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September 09, 2013, 08:49:05 PM
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Not safe at all. You are putting all your faith in a third party not to run away with your bitcoins.

If Mt.Gox goes bankrupt and sells your coins to pay their debts you will NOT get your coins back. Mt.Gox is not a bank. Your bitcoin deposit is not FDIC insured.

I personally don't leave any coin in Mt.Gox unless I am planning on selling.

I'm not saying that Mt.Gox is going to go out of business or steal your money, but if they do, you have very little legal recourse to use to get your money back.
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September 09, 2013, 08:50:53 PM
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No.

Bitcoin is the first monetary system to credibly offer perfect information to all economic participants.
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September 09, 2013, 08:56:39 PM
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If Mt.Gox goes bankrupt and sells your coins to pay their debts you will NOT get your coins back.

This. These are not your coins as long as these are at Mt.Gox.
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September 09, 2013, 08:58:57 PM
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Gox's market share has more than halved in the past couple months. They're facing a $75m lawsuit. They're no longer used in pricing on most sites. They had millions of USD seized by DHS. They have months of USD withdrawal backlog they may never find a resolution for. They've actively lied to customers about processing withdrawals to mislead them into making bad decisions.

Keeping money in there is boneheaded at best.

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September 10, 2013, 07:19:48 AM
 #12

If you don't have the keys, nothing is completely safe.  

This brings it to the point.  With Bitcoin (unlike fiat money except if you wish to keep your savings in cash somewhere hidden) everyone has the potential to safeguard their money without trusting any "bank" (Mt Gox in this case).  You need to understand how Bitcoin and keys work and be confident that you can manage to secure them, but I think this is the only way to go if you want to hold for the long run.

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September 11, 2013, 01:22:26 PM
 #13

Your Bitcoins are safe in Mt Gox, as long as you don't plan to withdraw them.

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optimator
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September 11, 2013, 01:44:35 PM
 #14

Leaving your bitcoins at an exchange represents a credit risk. More specifically, a counter-party or perhaps a sovereign country risk.

Part of the benefit of bitcoin is that it eliminates some types of counter-party risk, so when you leave bitcoins in Mt. Gox and thus expose your bitcoin to that risk some people may have immediate loud negative reactions.

Let's take a step back and look at counter-party risk with currency. You put money in a bank and then spend that money. You never think "what if the bank runs off with my money" - Banks in the U.S. are FDIC insured and maybe that gives you some confidence.

If you purchase something with a credit card and the vendor never delivers you don't worry about it because you would just call the credit card company and have them reverse the charge.

Both of these examples show how counter-party risk can be reduced or eliminated. However, the reduction of risk comes at a cost (e.g. the credit card fees charged to merchants which are ultimately passed along to the consumer).

Bitcoin eliminates the counter-party risk of money transmission because once transmitted the transaction is non-reputable.

Now back to your question. How much risk is there that the U.S. Government either directly or indirectly shutting down Mt.Gox? How much risk is there that the owner will abscond with your bitcoin? How much risk is there that the site will be hacked and the hacker run off with your bitcoin? How much risk is there that your computer will be hacked, your Mt. Gox keys discovered and your account emptied?

In reality it's near impossible to answer those questions but we know is a greater than zero risk. Because it's greater than zero many people would rather keep their coins in their own wallet. Additionally, because of the risk a security breach on your personal computer many people keep their coins in offline storage.

You decide your risk tolerance and make the appropriate risk-based decision.

Cheers!
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September 11, 2013, 09:16:41 PM
 #15

I bought my gold with dollars from the local pawn shop and now I have the gold, is there any downside to just leaving my gold in the shop? I'm planning to hold for the long run, so i could see the potential downsides to not moving the gold to the vault in my house, what I don't know if one of those potential downsides is a complete loss of the gold.

I have 2fa.

The reason I ask is I see lots of people stating "everyone is getting their gold out of that shop" But I'm not, so I'm either doing something stupid by just leaving it there, or I'm not as paranoid as the rest of people, and feel safe with We Sell Gold.

Anybody care to enlighten me?
rammy2k2
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September 11, 2013, 10:40:15 PM
 #16

Answer is simple : NO

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September 11, 2013, 10:48:01 PM
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BTC are never safe when held by a third party.

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September 11, 2013, 11:18:06 PM
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Mt.Gox is in violation of US banking law by not being registered as a money transmitter. They have been in violation since May 2011 when Mark Kapels got an account in Wells Fargo. This has so far made the Department of Homeland Security Seize that account with some millions on it. Further they were sued  by their American partners for breach of contract. I Don't know if that is related, but they have their hands full and are spending a lot of money on lawyers.

The funny thing is that I thought that I, as a foreign customer, was home free and only fell under my own country’s and Japanese regulation And "Gox Japan" was a separate business with their own book keeping. Stupid me!!

The good news is that they are not running anywhere, they are as stuck as is our money.

http://www.extremetech.com/extreme/155933-homeland-security-seizes-account-of-largest-bitcoin-exchange-mt-gox

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September 11, 2013, 11:24:44 PM
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Your Bitcoins are safe in Mt Gox, as long as you don't plan to withdraw them.

Funny, never thought about it this way but may become true soon!
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September 12, 2013, 04:40:05 AM
 #20

Make two wallets.  One, a paper wallet for long term storage.  Two, a blockchain wallet for purchases.  You can read up on the wiki if you don't know how to make a paper wallet, it's secure and very easy.

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