If they were really making a serious effort to fix things...it probably would have been better to just halt trading altogether until they had a concrete solution. Am I wrong?
You're correct. What should've been done.
1. Daily updates on the situation.
2. Ask for the help of the community, fly in experts if necessary. While there are many loth mouthed silly people in the community, there are quite many skilled individuals with business skills, engineering skills, legals skills and other skills that would be happy to help with the situation. I've seen at least one individual on the bitcoin foundation forum offering professional teams that might want to help MtGox fix the situation.
3. Halt trading while the technical issues are sorted out.
4. Just get it done, fix the problems and push the changes to the live system. Seems like other exchanges managed to do this pretty fast...
Also, it's strikingly that all customers needed to suffer from the malleability issue. From what I understand, here's how it played out:
A customer withdraws a certain amount of bitcoin. The raw tx is snapped up, altered and then rebroadcast on the network, the original tx appears to never have gone through, so Gox support credits the customers account, or trys to resend the transactions since their system falsely shows it as failed. Thus, the customer might've doubled his coins.
However, if Gox on their side refused to rebroadcast a 'failed' tx, or refused to credit a customers account with btc when a 'failed' tx occurs, then this would not be an issue. Only the accounts that were affected would be frozen pending investigation, and if it was determined that some account holders indeed attempted to cheat MtGox, then appropriate action had to be taken.
So let's say MtGox has 1 million customers, and of which 0.15 million are active. How many exploited the malleability issue? I guess not too many. Maybe 1? Maybe 5? Naturally, if some cunning and experienced hackers found this loophole, they might've orchestrated a larger operation, and thus relieving MtGox of some substantional amount of bitcoins, but where's the evidence?
All we have is MtGox's words. I'm sure someone with more experienced blockchain analysis skills could have more extensive input on this issue.
So, simply freezing the account of anyone that have 'failed' transactions and only clearing it after a manual investigation, while all other accounts could operate normally, could be the way to go. That way there would be no run on MtGox like it's going to be now once bitcoin withdrawals are reactivated (if that happens).
The fact that MtGox does not do everything in their power to ensure that everything is working as it is supposed to (moving of funds is a hint) is very suspicious.
Also there's been rumours about a couple ongoing investigations which is 'confidential'. Who knows what kind of investigations these are, and what the consequences are, we all know that public prosecutors seized bank accounts in Germany and Poland for Bitcoin-24, because 'they needed to find out if anything suspicious was going on'. Note that the yankees seized the
US Accounts of MtGox, totalling up to 5 millions dollars.
There's also the
coinlab lawsuits where MtGox claims to have lost another $5.3million. Coinlab itself has its
slab of legal issues.
And apparently MtGox is
countersuing Coinlab for more than $5million and over 1400 btc.
Somebody with better auditing skills would probably be better at connecting the dots and see if it is feasible whether MtGox is insolvent or not, but if all these tales of lost funds are true perhaps there are reasons to worry?
Are client funds ringfenced? We have never learned if this is the case. Are client funds used for running and ongoing expenses?
Who exactly is running MtGox?
Mark Karpeles was the one who bought MtGox.
Gonzague Gay-Bouchery, Manager Business Development aka Marketing Officer aka MT.GOX Marketing Director and Corporate Communications Manager. Also he seems to have put online a lot of images
here. His
linkedln.
In addition he's
Marketing & Corporate Communication Manager at K.K. Tibanne.
Picture of the two and an
interview from July 2013And an interesting quite from the interview about how Mark come about to aquire MtGox:
Mark started another company in Japan called Tibanne which is a hosting and domain management business. Mark actually built a Bitcoin client in order to accept payments by Bitcoin for his hosting business. Through this, Mark met Jeb McCaleb, founder of Mt.Gox. McCaleb had started the company as an online card trading exchange called “Magic The Gathering Online eXchange” – hence the name, Mt.Gox. But when he built the Bitcoin exchange, it soon became the majority of the business.
From linkedln, it appears that Gay-Bouchery is the founder of NihonCar.com, checking how much that website is worth revelas it is worth less than 500 USD (use any website that calculates these sort of stuff). Also the articles on that website all cites wikipedia and the blog is only press releases from car manufactures. Since Gay-Bouchery has this on his CV, and he's been at it for more than 8 years, this seems rather strange. One should think it was much more developed with more content and was worth a whole lot more.
So, a dude with apparently no previous business experience (car journalist)(?), but with knowledge of french and english gets to hold position as business development manager at MtGox. To me it seems like this is a friend giving a friend a position. Nothing wrong with that, except I'm not sure if it is the best from a business perspective.
Who else is in the management at MtGox, anybody else but these?
