What did they do with all them money everyone keeps saying they don't have any. They would only need to have 1/10 of the cash on hand for all the deposits they owe to do arbitrage. Do this 2 times and you have 12/10 to cover the deposits.
Money doesn't just stop at $0... How much debt do you think they have/had?
We can go further even and say they only had 5% of the money left do arbitrage. Do that a few times and your black again. How could they not be buying at their own exchange at these low prices and selling on the other exchanges. Each time you do this you gain 600% or 6 times the money so 5% x 6 = 30%.
They were likely selling on the other exchanges for quite some time since the forfeiture of their bank accounts. They have to pay debts to keep operating and the trading fees only go so far. That money they lost wasn't profit... That was their Gross. They lost the
top line of their balance sheet.
Having only 5% money of what is owed to everyone can be used to do arbitrage 3 times and makes more then enough money to cover everyone. That and all the fees they have been collecting from allowing trading to continue.
That's exactly what the "conspiracy" is about... They can't buy Bitcoins back from their own exchange with the proceeds of arbitrage as they sold the real coins on other exchanges; there aren't many Bitcoins left and it's a viscous cycle. The only thing they can do is pay out fiat and buy the "gox coins" which
aren't Bitcoins.I don't understand these conspiracy theories around how Mt.Gox is bankrupt, or Mt.Gox was hack, or Mark Karpeles spent all the coins on coffee, or Mt.Gox is a scam and they ran off with the money. None of them make any since and none of them are rational. I think its a slim chance that their insolvent and even if they are it would not be that hard to make up the difference.
Have you ever owned a business? Do you even know how narrow the margins are in real life? We're talking about Net Profit of less than 1% annul for this type of business. Businesses can fail for
much less than this and do so every day all around you. Gox is only a few years old; do you honestly think they've been around long enough to grow the type of financial infrastructure that can absorb the scope of these losses? If they did then they must've paid off the initial investment in
record time then...
Everyone says all the coins are gone I not only find that offensive to the people who have coins in the exchange but illogical and irrational. All the things I mention above and the fact that they had cold storage just makes it more absurd on how they could get hacked and have all the coins stolen.
The coins weren't hacked. They were re-appropriated into bailing out a sinking ship. When it became clear that the ship
will sink and it's completely outside of their control, they made a plan; do you think they want to go to prison? They will pay their members out in fiat from buying all the "Gox coins" at far less than average value, most at less than $100 each. Nobody will get BTC back from Gox, and even the amount they sold in arbitrage likely won't cover the debts owed by the company. They will probably declare bankruptcy and everybody will have to deal with it and move on.
The best possible outcome that I can see here is that their users are at least reimbursed some fiat before they declare bankruptcy.
