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Author Topic: Full Blown MtGox Audit - Get Ready To participate. Starting Sept 25th  (Read 4362 times)
allten (OP)
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September 11, 2011, 10:22:59 PM
 #1

I would like to hope that MtGox has been 100% trustworthy with the BitCoin market.
However, we bitcoiners should never assume, but hold every exchange accountable
from time to time.

I'm calling (proposing) all traders to take a break from mtGox starting Sept 25th
for a period of two weeks. In that time, withdraw all bitcoin and other money
depositing it into the next exchange of your choice. Or you could trade on various
exchanges which I do (not all eggs in one basket).

I will be withdrawing all my funds from mtgox during this period. If all funds are
available to all those who withdrew and there's no evidence of manipulation in
the mean-time then I will be happy to have the majority of my trading to
continue to occur on their platform.

Please join with me! For the long term health of bitcoin.
Please help announce this audit on all other forums and bitcoin related sites.
I have nothing against MtGox and I hope they succeed.
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September 11, 2011, 10:27:16 PM
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I'm calling (proposing) all traders to take a break from mtGox starting Sept 25th
for a period of two weeks. In that time, withdraw all bitcoin and other money
depositing it into the next exchange of your choice. Or you could trade on various
exchanges which I do (not all eggs in one basket).

I will be withdrawing all my funds from mtgox during this period. If all funds are
available to all those who withdrew and there's no evidence of manipulation in
the mean-time then I will be happy to have the majority of my trading to
continue to occur on their platform.


What makes you think that MtGox will waive the withdrawal limits in order for people to do this?  Expecting a business to forego two weeks of revenue is a pretty big ask.

All I can say is that this is Bitcoin. I don't believe it until I see six confirmations.
geek-trader
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September 11, 2011, 10:31:27 PM
 #3

I don't understand the reasoning behind this.  Why would I do this?

MtGox has been great for Bitcoin.  Why would I punish them by using other exchanges?

In my opinion, this is a stupid stunt.  Unless, of course, you work for another exchange and are trying to screw your main competition.  Then it's an evil stunt.

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September 11, 2011, 10:44:12 PM
 #4

He wants to make sure mtgox isn't doing any fractional reserve banking.
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September 11, 2011, 11:02:43 PM
 #5

He wants to make sure mtgox isn't doing any fractional reserve banking.

And he kind of has a point, it´s not like it is the first time for questions of this kind to appear about Mark/MtGox, more like the 4th or 5th round. Just because he´s "the last man standing" amongst major early bitcoin businesses doesn´t mean he shoud be excempted from scrunity, quite the contrary.
Though I don´t really see an audit happening. It´s been proposed before, it will be shouted down by the fanboys again.
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September 11, 2011, 11:03:03 PM
 #6

I would like to hope that MtGox has been 100% trustworthy with the BitCoin market.
However, we bitcoiners should never assume, but hold every exchange accountable
from time to time.

I'm calling (proposing) all traders to take a break from mtGox starting Sept 25th
for a period of two weeks. In that time, withdraw all bitcoin and other money
depositing it into the next exchange of your choice. Or you could trade on various
exchanges which I do (not all eggs in one basket).

I will be withdrawing all my funds from mtgox during this period. If all funds are
available to all those who withdrew and there's no evidence of manipulation in
the mean-time then I will be happy to have the majority of my trading to
continue to occur on their platform.

Please join with me! For the long term health of bitcoin.
Please help announce this audit on all other forums and bitcoin related sites.
I have nothing against MtGox and I hope they succeed.

LOL!  what a lame brained suggestion.  the trolls are back in force precisely b/c they're panicking about the huge reversal UP in price today.  your handlers are gonna fire you if you don't get the price back down.

for your information, i've moved large amounts of money thru mtgox with NEVER a problem or a penny missing.  Mark Karpeles is trustworthy and honest and has donated loads of bit coins to help the bit coin economy. you're just trying to start a run.  lame.
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September 11, 2011, 11:05:54 PM
 #7

This is oddly reminiscent of those "don't buy gas on XX/XX/20XX" chain emails.

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September 11, 2011, 11:07:51 PM
 #8

Didn´t take long for the fanboys to comment. As I said, it´s pointless raising valid questions about Mark/Mtgox, you´ll just get shouted down.
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September 11, 2011, 11:08:55 PM
 #9

An audit is not that unreasonable... I write payroll processing software for a living, and my customers demand audits.

This sort of audit is something I have to pay for.  But of course it makes my services more attractive, so it's a worthwhile investment.

Generally the way it works is an auditor flies in and does his thing, asks for records, asks to inspect certain things, and asks for statements on what controls are in place.  His product is a written opinion as to whether or not we're properly implementing the controls we say we're implementing, as well as a description of what those controls are.  Ours comes out to like 50 pages.  His product is called a "SAS 70 Type II audit".  The auditor has to be a CPA.

Want to put a burr under MtGox?  Persuade his competition to get and publish a SAS 70 type II or equivalent.  They cost maybe $10-$25k to get.  I can offer referrals.

Companies claiming they got hacked and lost your coins sounds like fraud so perfect it could be called fashionable.  I never believe them.  If I ever experience the misfortune of a real intrusion, I declare I have been honest about the way I have managed the keys in Casascius Coins.  I maintain no ability to recover or reproduce the keys, not even under limitless duress or total intrusion.  Remember that trusting strangers with your coins without any recourse is, as a matter of principle, not a best practice.  Don't keep coins online. Use paper or hardware wallets instead.
allten (OP)
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September 11, 2011, 11:12:22 PM
 #10


What makes you think that MtGox will waive the withdrawal limits in order for people to do this?  Expecting a business to forego two weeks of revenue is a pretty big ask.

That's why the proposed audit is a period of two weeks. Plenty of time for withdrawals.

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September 11, 2011, 11:14:27 PM
 #11


What makes you think that MtGox will waive the withdrawal limits in order for people to do this?  Expecting a business to forego two weeks of revenue is a pretty big ask.

That's why the proposed audit is a period of two weeks. Plenty of time for withdrawals.



can we please shut down Bank of America for 2wks since i think they should undergo a third party audit in light of the loads of evidence they're hiding all sorts of losses on their balance sheet, not to mention off balance sheets?  

this will give everyone plenty of time to make USD withdrawals to find out if their money is really there.
allten (OP)
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September 11, 2011, 11:17:00 PM
 #12

I don't understand the reasoning behind this.  Why would I do this?

MtGox has been great for Bitcoin.  Why would I punish them by using other exchanges?

In my opinion, this is a stupid stunt.  Unless, of course, you work for another exchange and are trying to screw your main competition.  Then it's an evil stunt.

If you think it is stupid, then please do not participate.
No, I do not work for another exchange. I just want honest markets.
We shouldn't just assume they are honest, but test them from time to time (Hold them accountable).
If I was mtGox, I would fully embrace and encourage this audit and be glad it was happening.
Sure, they would loose some short-term revenue, but the long term effect would ensure that they remain #1.
allten (OP)
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September 11, 2011, 11:20:38 PM
 #13

He wants to make sure mtgox isn't doing any fractional reserve banking.

Thank You. Fractional Reserve Banking is a very huge deal to me.
And should be to all.
If there is any fractional reserve banking going on within an exchange then it should be made known to the public.
That way the free markets could choose to avoid them if they see it as an issue.
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September 11, 2011, 11:22:43 PM
 #14

I don't understand the reasoning behind this.  Why would I do this?

MtGox has been great for Bitcoin.  Why would I punish them by using other exchanges?

In my opinion, this is a stupid stunt.  Unless, of course, you work for another exchange and are trying to screw your main competition.  Then it's an evil stunt.

If you think it is stupid, then please do not participate.
No, I do not work for another exchange. I just want honest markets.
We shouldn't just assume they are honest, but test them from time to time (Hold them accountable).
If I was mtGox, I would fully embrace and encourage this audit and be glad it was happening.
Sure, they would loose some short-term revenue, but the long term effect would ensure that they remain #1.

if you truly were just concerned about transparency and open markets instead of trying to inflict harm on the main btc exchange, you would lobby Mark to undergo an audit thru more traditional means such as mobilizing a petition or contacting him directly to move in a more constructive direction.

by recommending a full on bank run withdrawal you betray your true motivation which is to try and harm mtgox irreparably and to try and harm the btc community. 
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September 11, 2011, 11:23:23 PM
 #15

How is that a valid counterargument?

can we please shut down Bank of America for 2wks since i think they should undergo a third party audit in light of the loads of evidence they're hiding all sorts of losses on their balance sheet, not to mention off balance sheets?  

this will give everyone plenty of time to make USD withdrawals to find out if their money is really there.

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September 11, 2011, 11:24:43 PM
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How is that a valid counterargument?

can we please shut down Bank of America for 2wks since i think they should undergo a third party audit in light of the loads of evidence they're hiding all sorts of losses on their balance sheet, not to mention off balance sheets?  

this will give everyone plenty of time to make USD withdrawals to find out if their money is really there.

it isn't.  its actually as stupid a recommendation as his is for mtgox.

how about that bet btw?
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September 11, 2011, 11:24:50 PM
 #17

He wants to make sure mtgox isn't doing any fractional reserve banking.

Thank You. Fractional Reserve Banking is a very huge deal to me.
And should be to all.
If there is any fractional reserve banking going on within an exchange then it should be made known to the public.
That way the free markets could choose to avoid them if they see it as an issue.

How about just doing your due dilligence? There is a search function in this forum after all... Have a look and make up your mind. But this thread isn´t going to go anywhere, the "important" voices clearly are against you.
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September 11, 2011, 11:28:58 PM
 #18

I don't understand the reasoning behind this.  Why would I do this?

MtGox has been great for Bitcoin.  Why would I punish them by using other exchanges?

In my opinion, this is a stupid stunt.  Unless, of course, you work for another exchange and are trying to screw your main competition.  Then it's an evil stunt.

If you think it is stupid, then please do not participate.
No, I do not work for another exchange. I just want honest markets.
We shouldn't just assume they are honest, but test them from time to time (Hold them accountable).
If I was mtGox, I would fully embrace and encourage this audit and be glad it was happening.
Sure, they would loose some short-term revenue, but the long term effect would ensure that they remain #1.

if you truly were just concerned about transparency and open markets instead of trying to inflict harm on the main btc exchange, you would lobby Mark to undergo an audit thru more traditional means such as mobilizing a petition or contacting him directly to move in a more constructive direction.

by recommending a full on bank run withdrawal you betray your true motivation which is to try and harm mtgox irreparably and to try and harm the btc community. 

I don't want to harm MtGox or BitCoin; however, there is not even a public policy on Marc's website about fractional reserve banking and methods of ensuring that through audits to the public. This is an opportunity for Marc! I hope he embraces it and finds me as a friend not an enemy.
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September 11, 2011, 11:33:17 PM
 #19


I don't want to harm MtGox or BitCoin; however, there is not even a public policy on Marc's website about fractional reserve banking and methods of ensuring that through audits to the public. This is an opportunity for Marc! I hope he embraces it and finds me as a friend not an enemy.

You are advocating a bank run on his company.  Why in the world would he find you as a friend?  If I were him I would want to punch you in the face.

You come in with 14 posts and are already advocating the destruction of one of bitcoin's main pillars.  Why would anyone treat you as a friend?

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September 11, 2011, 11:33:30 PM
 #20

I don't understand the reasoning behind this.  Why would I do this?

MtGox has been great for Bitcoin.  Why would I punish them by using other exchanges?

In my opinion, this is a stupid stunt.  Unless, of course, you work for another exchange and are trying to screw your main competition.  Then it's an evil stunt.

If you think it is stupid, then please do not participate.
No, I do not work for another exchange. I just want honest markets.
We shouldn't just assume they are honest, but test them from time to time (Hold them accountable).
If I was mtGox, I would fully embrace and encourage this audit and be glad it was happening.
Sure, they would loose some short-term revenue, but the long term effect would ensure that they remain #1.

if you truly were just concerned about transparency and open markets instead of trying to inflict harm on the main btc exchange, you would lobby Mark to undergo an audit thru more traditional means such as mobilizing a petition or contacting him directly to move in a more constructive direction.

by recommending a full on bank run withdrawal you betray your true motivation which is to try and harm mtgox irreparably and to try and harm the btc community. 

I don't want to harm MtGox or BitCoin; however, there is not even a public policy on Marc's website about fractional reserve banking and methods of ensuring that through audits to the public. This is an opportunity for Marc! I hope he embraces it and finds me as a friend not an enemy.

well then if you're sincere, you would go about this an entirely different way.  your methods betray your motives.
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September 11, 2011, 11:35:25 PM
 #21

While I took everything I had out of Mt:Gox over the past couple of weeks, I have many friends who are still trading there. One just messaged me to say that his account was blocked as he was trying to offload his BTC's and jump ship.

I then see this posted on SA from the mtgox irc channel:

Quote
17:35 < molecular> flushing bad orders? How do I make a "bad sell order" at 30 USD? ^^
17:35 < xelister> molecular: =)
17:35 <@MagicalTux> molecular, I blocked ~2000 accounts created most likely for the purpose of killing bitcoin on 9/11
17:35 <@MagicalTux> their trades do remain however
17:35 < molecular> MagicalTux, holy moly!
17:35 <@MagicalTux> but they cannot execute, causing weird results

2000 accounts blocked? How can he be sure that innocent people who just wanted to trade BTC's in this volatile market are not caught up with this mass blocking? Will MtGox be held financially liable for any losses that these people incur should the $ price of BTC drop during the account freezes?
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September 11, 2011, 11:38:08 PM
 #22


I don't want to harm MtGox or BitCoin; however, there is not even a public policy on Marc's website about fractional reserve banking and methods of ensuring that through audits to the public. This is an opportunity for Marc! I hope he embraces it and finds me as a friend not an enemy.

You are advocating a bank run on his company.  Why in the world would he find you as a friend?  If I were him I would want to punch you in the face.

You come in with 14 posts and are already advocating the destruction of one of bitcoin's main pillars.  Why would anyone treat you as a friend?

MtGox fanboy much?
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September 11, 2011, 11:41:10 PM
 #23


I don't want to harm MtGox or BitCoin; however, there is not even a public policy on Marc's website about fractional reserve banking and methods of ensuring that through audits to the public. This is an opportunity for Marc! I hope he embraces it and finds me as a friend not an enemy.

You are advocating a bank run on his company.  Why in the world would he find you as a friend?  If I were him I would want to punch you in the face.

You come in with 14 posts and are already advocating the destruction of one of bitcoin's main pillars.  Why would anyone treat you as a friend?

MtGox fanboy much?

MtGox troll?
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September 11, 2011, 11:42:40 PM
 #24

More was posted from the irc channel onto SA (it is a great thread for monitoring what is going at the moment):

Quote
17:31 < kinlo> there is something wrong, how can it have gone above 10 when my sell order at 8 didn't occur?
17:31 < molecular> it didnt reall go above 10, I assume
17:31 < Ymgve> kinlo: bugs, the orders didn't happen or there was something wrong in the matching algorithm
17:32 < kinlo> MagicalTux: ?
17:32 < molecular> likely has to do with the "new currency markets"
17:32 <@MagicalTux> no
17:32 <@MagicalTux> has to do with hackers trying their best to do stuff normal people wouldn't by dropping large amounts of stolen funds/coins

Question: How does Marc know that these funds are stolen, and when he talks about hacking, is he talking about Mt:Gox being hacked?

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September 11, 2011, 11:50:16 PM
 #25


I don't want to harm MtGox or BitCoin; however, there is not even a public policy on Marc's website about fractional reserve banking and methods of ensuring that through audits to the public. This is an opportunity for Marc! I hope he embraces it and finds me as a friend not an enemy.

You are advocating a bank run on his company.  Why in the world would he find you as a friend?  If I were him I would want to punch you in the face.

You come in with 14 posts and are already advocating the destruction of one of bitcoin's main pillars.  Why would anyone treat you as a friend?

MtGox fanboy much?

MtGox troll?

Not really, if you´d bothered to read geek-traders comment, if MtGox is run purely as an exchange, there can´t be a bank run by definition/it would not do any harm. Threatening violence "punch you in the face" and the "one of bitcoin's main pillars" defence, where did I hear that last? oh yeah, the last two MtGox issues, mybitcoin and lately the unsavioury Bruce Wagner/onlyone.tv discussion.
Not that you have missed a beat in actively defending all of these either...
But go ahead, call me a troll.
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September 11, 2011, 11:53:32 PM
 #26


I don't want to harm MtGox or BitCoin; however, there is not even a public policy on Marc's website about fractional reserve banking and methods of ensuring that through audits to the public. This is an opportunity for Marc! I hope he embraces it and finds me as a friend not an enemy.

You are advocating a bank run on his company.  Why in the world would he find you as a friend?  If I were him I would want to punch you in the face.

You come in with 14 posts and are already advocating the destruction of one of bitcoin's main pillars.  Why would anyone treat you as a friend?

A BTC bank run on an organization that is 100% funded (both btc and all currencies) with lots of profits should absorb it just fine because they have 100% of funds available. If this is successful and everyone gets there money out and there's been no indication of market manipulation then I will defiantly increase the amount of reserve and amount of trading I do with them. Like I said before, they should embrace this opportunity. The short-term loss would not even compare with their long term gains and the increased confidence from the market they would receive.
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September 11, 2011, 11:55:19 PM
 #27

If Mtgox is alllowing bots to trade massive amounts of .25 btc etc... millions of MICRO trades to lower the value, I support this effort! There's already like 50+ threads relating to manipulation of the market by xx parties.

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September 12, 2011, 12:05:11 AM
 #28

All of the exchanges should be audited by an independent third party on a regular basis.  What the OP has proposed could create a false sense of security given the likelihood that many people won't try to withdraw their money/BTC - it's not going to conclusively prove than the exchange has enough on hand in segregated funds to cover 100% of user deposits.

All I can say is that this is Bitcoin. I don't believe it until I see six confirmations.
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September 12, 2011, 12:10:07 AM
 #29

"SAS 70 Type II or equivalent" is the magic thing to ask for if you want any meaningful results!

Companies claiming they got hacked and lost your coins sounds like fraud so perfect it could be called fashionable.  I never believe them.  If I ever experience the misfortune of a real intrusion, I declare I have been honest about the way I have managed the keys in Casascius Coins.  I maintain no ability to recover or reproduce the keys, not even under limitless duress or total intrusion.  Remember that trusting strangers with your coins without any recourse is, as a matter of principle, not a best practice.  Don't keep coins online. Use paper or hardware wallets instead.
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September 12, 2011, 12:23:00 AM
 #30

MtGox has been great for Bitcoin.  Why would I punish them by using other exchanges?

Are you serious?Huh
just look in the trading activity in the past 24 hours and think about if this is what an exchange should be doing.
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September 12, 2011, 12:27:01 AM
 #31

MtGox has been great for Bitcoin.  Why would I punish them by using other exchanges?

Are you serious?Huh
just look in the trading activity in the past 24 hours and think about if this is what an exchange should be doing.

i hear the panic in your voice as the Bitcoin price rises.
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September 12, 2011, 12:28:54 AM
 #32

how would this boycott prove anything? removing your funds won't prove anything. it would not make sense for mt gox or any other large exchange to leave all funds online and accessible all the time. I don't get it.

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September 12, 2011, 12:29:25 AM
 #33

"SAS 70 Type II or equivalent" is the magic thing to ask for if you want any meaningful results!

Not an accountant, but wouldn´t you need a SAS 55 too, to be sure? Also, from what I remember, isn´t this standard geared towards nonfinancial companies rather than financial organizations? In how far does this apply to MtGox, given that they are based in Japan, given that it is a US standard? What would be the japanese equivalent to ask for?
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September 12, 2011, 12:30:25 AM
 #34

I will not be removing my coin from mtgox, and I am sure many others will not as well.  


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September 12, 2011, 12:35:45 AM
 #35

how would this boycott prove anything? removing your funds won't prove anything. it would not make sense for mt gox or any other large exchange to leave all funds online and accessible all the time. I don't get it.

you're not supposed to "get it".  he expects you to mindlessly go along with his hair brained proposal.
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September 12, 2011, 12:40:32 AM
 #36

I'm okay with an audit.

However, convincing everyone to remove their money on X day for Y period is the most inefficient way I can think of doing it.

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September 12, 2011, 12:41:31 AM
 #37

whats wrong with this idea? i think its a good idea, mtgox should not be doing FRB, but i think 2 weeks if a bit much, maby 3 days?

allten (OP)
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September 12, 2011, 12:55:19 AM
 #38

All of the exchanges should be audited by an independent third party on a regular basis.  What the OP has proposed could create a false sense of security given the likelihood that many people won't try to withdraw their money/BTC - it's not going to conclusively prove than the exchange has enough on hand in segregated funds to cover 100% of user deposits.

That's a good point.
Thanks.

I still hope people consider the proposed audit. If not, please provide a better solution.
A full transparant audit is neccessary and I would at least hope that everyong agrees with that.
allten (OP)
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September 12, 2011, 12:59:25 AM
 #39

I will not be removing my coin from mtgox, and I am sure many others will not as well.  



If many choose not to then yes it would render this audit uneffective.
what proposals do you have for a full transparant audit?
I do hope you see the need.
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September 12, 2011, 01:01:54 AM
 #40

i wouldn't mind an audit either.  my whole argument is how you're going about it.  the way you propose will damage mtgox and i can't understand how you can't see that.  or maybe you do.
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September 12, 2011, 01:07:27 AM
 #41

MTGOX is making a good deal of money/coin.  Just take the volume and multiply by the fee charged.  I have confidence that mtgox has my money and extra to spare.  With the money they are taking in they have the resources to secure their servers against attacks that have already happened.  They have served the community and helped out many times when they had no responsibility to do so. 

I have coin in other exchanges as well, and use which gives me the best execution at the moment I need it done. 

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September 12, 2011, 01:08:49 AM
 #42

i wouldn't mind an audit either.  my whole argument is how you're going about it.  the way you propose will damage mtgox and i can't understand how you can't see that.  or maybe you do.

Great to hear that you agree that an audit makes sense. Given that you seem to be in close contact with the former as well as the current owner:

because Jed has told me it was his acct that got hacked after the SQL injection.

still doesn't absolve Mark.

maybe you can pass along the common sentiment of this thread to Mark.
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September 12, 2011, 01:13:58 AM
 #43

whats wrong with this idea? i think its a good idea, mtgox should not be doing FRB, but i think 2 weeks if a bit much, maby 3 days?

It takes time to get funds into and out of the exchanges, so if people did withdraw their funds and waited three days to see whether they received them (I think some methods take even longer than this to process), they'd then have to wait for those funds to hit their MtGox account when they redeposited them before they could trade again.  I suspect that many people would find this unacceptable, especially as some forms of deposit and withdrawal cost money.

Audits are a good idea but you need access to the financial records of the company in order for them to establish anything.  

That said, it would be nice to know whether it's one of the exchanges which is currently moving large amounts of coins around from blocks 144916 and 144917. 

All I can say is that this is Bitcoin. I don't believe it until I see six confirmations.
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September 12, 2011, 01:24:26 AM
 #44

i wouldn't mind an audit either.  my whole argument is how you're going about it.  the way you propose will damage mtgox and i can't understand how you can't see that.  or maybe you do.

Great to hear that you agree that an audit makes sense. Given that you seem to be in close contact with the former as well as the current owner:

because Jed has told me it was his acct that got hacked after the SQL injection.

still doesn't absolve Mark.

maybe you can pass along the common sentiment of this thread to Mark.

its not b/c i have any special privileges at all.  its b/c i take an active interest in my investments and want to know the people i'm trusting as much as possible in this type of environment.  all it takes is for you to go on IRC, PM him, email him, etc. and you will get answers to all your questions.

and i will mention that he publish a third party audit.  you should too.
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September 12, 2011, 01:35:49 AM
 #45


its not b/c i have any special privileges at all.  its b/c i take an active interest in my investments and want to know the people i'm trusting as much as possible in this type of environment.  all it takes is for you to go on IRC, PM him, email him, etc. and you will get answers to all your questions.

and i will mention that he publish a third party audit.  you should too.

Great, we´re finally getting somewhere! You promised to get in touch with Mark to impress the need for an external audit on him, I will do so too and if I got you right, you would encourage all the others reading and posting on this thread to do likewise. This might actually get things moving, thanks.

Really looking forward to seeing the outcome.
allten (OP)
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September 12, 2011, 01:53:34 AM
 #46

Thanks many for your comments and suggestions on my OP.
After getting a taste of your comments. The proposed audit appears to be a no go.
It really seemed like a good idea to me, and maybe it still is, but If the BTC community
cannot be convinced then, yes please, let's discuss other options.
I hear of third party audits that have already taken place.
Where can I find the details of those audits?
Are they published on MTgox's web site?
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September 12, 2011, 05:04:29 AM
 #47

Thanks many for your comments and suggestions on my OP.
After getting a taste of your comments. The proposed audit appears to be a no go.
It really seemed like a good idea to me, and maybe it still is, but If the BTC community
cannot be convinced then, yes please, let's discuss other options.
I hear of third party audits that have already taken place.
Where can I find the details of those audits?
Are they published on MTgox's web site?

Due to the sensitive nature of the information you're asking about, no it has not been posted anywhere. But I'm sure our coins and money are well looked after and accounted for! (As long as you don't get hacked!)
casascius
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September 12, 2011, 05:12:38 AM
 #48

"SAS 70 Type II or equivalent" is the magic thing to ask for if you want any meaningful results!

Not an accountant, but wouldn´t you need a SAS 55 too, to be sure? Also, from what I remember, isn´t this standard geared towards nonfinancial companies rather than financial organizations? In how far does this apply to MtGox, given that they are based in Japan, given that it is a US standard? What would be the japanese equivalent to ask for?

It only applies to the extent we as his customer base demand it of him.  For him to get a SAS 70 he wouldn't be doing it to comply with any law, he would be doing it to fufill our demand for an independent report detailing his controls and an opinion on their effectiveness as practiced, all signed by somebody with their credentials on the line.  There might be a Japanese equivalent, but personally I'd rather read a SAS 70 from a US-based auditor, possibly because I don't speak any Japanese.

And SAS 70 already has a recipe for things to look for in an "application service provider"... for example, the scope of such an audit is already documented and known to cover procedures such as backups, who has access to modify data, who has access to modify source code, security solutions being used, etc.

I have been mentioning SAS 70 to Mark as of several months ago.  No interest was displayed.  Besides asking in numbers, the best way to persuade him to do it, in my opinion, is to go get TradeHill and Camp BX to get one done, so he'll be left out.




Companies claiming they got hacked and lost your coins sounds like fraud so perfect it could be called fashionable.  I never believe them.  If I ever experience the misfortune of a real intrusion, I declare I have been honest about the way I have managed the keys in Casascius Coins.  I maintain no ability to recover or reproduce the keys, not even under limitless duress or total intrusion.  Remember that trusting strangers with your coins without any recourse is, as a matter of principle, not a best practice.  Don't keep coins online. Use paper or hardware wallets instead.
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September 12, 2011, 03:48:29 PM
 #49

I have been mentioning SAS 70 to Mark as of several months ago.  No interest was displayed.  Besides asking in numbers, the best way to persuade him to do it, in my opinion, is to go get TradeHill and Camp BX to get one done, so he'll be left out.



Oh wow.  That looks kinda shady. 

If an audit would increase confidence among a few and demonstrate good housekeeping, I don't see why not.  If they resist that's a red flag for me.

I hope TH and CampBX step up.

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September 12, 2011, 04:00:04 PM
 #50

An audit is not that unreasonable... I write payroll processing software for a living, and my customers demand audits.

This sort of audit is something I have to pay for.  But of course it makes my services more attractive, so it's a worthwhile investment.

Generally the way it works is an auditor flies in and does his thing, asks for records, asks to inspect certain things, and asks for statements on what controls are in place.  His product is a written opinion as to whether or not we're properly implementing the controls we say we're implementing, as well as a description of what those controls are.  Ours comes out to like 50 pages.  His product is called a "SAS 70 Type II audit".  The auditor has to be a CPA.

Want to put a burr under MtGox?  Persuade his competition to get and publish a SAS 70 type II or equivalent.  They cost maybe $10-$25k to get.  I can offer referrals.

That is the most logical and by far the most effective proposition I have yet to hear on dealing with the latest MTGox accusations.

To respond to the OP, it is preposterous to think that every single person who has money in MTGox is going to withdraw it for 2 weeks. It makes zero sense and it would never happen.

 I think MTGox should get a SAS 70 Type II audit, it would do wonders for their business and to boost the legitimacy of Bitcoin to the world.

thank you for that.
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September 12, 2011, 05:17:26 PM
 #51


 I think MTGox should get a SAS 70 Type II audit, it would do wonders for their business and to boost the legitimacy of Bitcoin to the world.

thank you for that.


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