MTGox lost 750K Bitcoins?

[Pierre]

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[64dimensions]

Is someone bringing the penny biotech stock dump and pump playbook to bitcoin?

The 750k lost bitcoin rumor whether true or not pushes a lot of investor buttons!

[frito]

The rumor does not fit it into the transaction malleability scheme, confirmed to be a fact by foundation people.
All big withdrawals were checked manually,Gox has tight withdrawal limits on unverified accounts(on verified in fact too).
Therefore stealing 750k is i think iMPOSSIBLE.

[pedrog]

They may be insolvent, they may have lost coins, but 750 000 bitcoins is a very big number, it's something like $ 375 000 000, they may not be the brightest people on the industry, but this too much.

[Revelations86]

Site is now down and Yes, I find it equally suspicious that $750K was stolen under their noses without them noticing.  I smell greed in the picture.

[repentance]

Site isn't down.  It's just totally empty now.

[pedrog]

Well, I guess everyone already read the joint statement from the other exchanges, are there any confirmations on how big is the damage?

[repentance]

The rumor does not fit it into the transaction malleability scheme, confirmed to be a fact by foundation people.
All big withdrawals were checked manually,Gox has tight withdrawal limits on unverified accounts(on verified in fact too).
Therefore stealing 750k is i think iMPOSSIBLE.

Nobody said that they lost 750k BTC to transaction malleability.  gmaxwell pointed out a few days back that it was possible that they'd lost more than they claimed to that issue but it was far from their only problem.

We have no idea when MtGox was last independently audited.  It's entirely possible that it's only in trying to determine their losses due to the transaction malleability issue that they've looked far enough into their accounts to uncover other losses of which they were previously unaware.  Small companies, in particular, have a bad habit of not looking below the surface often enough.  

Huge financial institutions have constant checks and balances in place, spend billions on infrastructure,  and still incur losses.  It's all too easy to believe that MtGox had infrastructure totally insufficient for keeping track of their true financial situation.

Well, I guess everyone already read the joint statement from the other exchanges, are there any confirmations on how big is the damage?

MtGox hasn't even acknowledged the latest accusations yet.  They'd be foolish to issue any public statement without expert legal advice at this point, so I wouldn't expect anything definitive any time soon unless it's a public statement saying that they're filing for insolvency protection.

[Pierre]

Nobody said that they lost 750k BTC to transaction malleability.

Er... yes they did. It's right there in the Gox document.

[androidboss]

that is to dead,i do not care it.

it arleady dead in my heart!

[repentance]

Nobody said that they lost 750k BTC to transaction malleability.

Er... yes they did. It's right there in the Gox document.

Half of that document isn't even in comprehensible English.

If you notice, it also says that cold storage got wiped out due to a leak in the hot wallet.  That can't be explained by transaction malleability alone. Something had to be very, very wrong with MtGox's accounting procedures for them not to realise that they had paid out more than they should have over such a long period of time.  

In fact the document explicitly says that "regardless of malleability and regulatory issues, MtGox's main problems are massive robbery and poor bitcoin accounting".

The short-fall should have shown up when they reconciled their accounts because the funds left their wallets twice even though it only showed up once in their accounts.  The discrepancy would have shown up when the hot wallet balance was lower than what it should have been according to "the books" - just the same as if the bank double processed every bill payment you made, you'd notice when you checked your bank balance because it would be lower than it should be.

A business that size should be reconciling their accounts at least daily.  There should have been procedures in place to ensure that the amount of funds shown as going out of the hot-wallet was the same as the amount which actually left the hot-wallet and it shouldn't have been possible to refill the hot wallet unless those two amounts reconciled.  If they weren't reconciling the hot wallet balance against the books then they had no mechanism in place to protect against embezzlement, either.

The malleability issue may have uncovered something deeper, but it's definitely not the whole story.  Just their book-keeping procedures should have revealed this.  If it's a long-standing problem, then a short-fall should have shown up when their financial statements were prepared last year (remember the Japanese financial year ends 31 March).

[Lordas]

If it is possible to loose 750K bitcoins, the only way - never never care what assests you have and what transactions you make. I do not think is it possible. This is just 3rd (?) fake message to public to cover something else, in my oppinion.

[mayne]

FUDDDDDDD

https://twitter.com/CharlieShrem/status/438111755093671936

Charlie Shrem is slowly becoming my hero

your hero fails

[justusranvier]

A business that size should be reconciling their accounts at least daily.

This is the 21st century.

There's no excuse for any Bitcoin company not to reconcile their BTC holdings each and every block.

[Xell]

I remain skeptical about its authenticity for many reasons, not least of all because it reads like something put together by a complete amateur.

Remember this is Mt.Gox, so sounds about right

[nioc]

So tell me again how their cold wallet "leaked" to their hot wallet?  And did this for a total of 750k coins.

That seems more like a river than a leak.

[repentance]

A rather interesting question is whether the failure of MtGox to maintain proper accounting measures rises to the level of negligence.  I sure as hell wouldn't like to be the person explaining to whoever investigates corporate failures in Japan exactly why their accounting systems were so woefully inadequate.

[Pierre]

Losing $300 million of customer funds over the course of many months is not just a screw-up. It's criminal.

[MrPiggles]

So MtGox got SilkRoaded?

[harkonnen]

Somebody please say it isn't so.

http://two-bit-idiot.tumblr.com/

Sounds like it's true.
http://www.nytimes.com/2014/02/25/business/apparent-theft-at-mt-gox-shakes-bitcoin-world.html?_r=1

MtGox bought gox.com just like the document said. And gox.com is not pointing mtgox.com

There is even a website like http://goxbalance.com/