Gox Report stating it is 50% solvent? Thoughts?

[Imerman2]

http://es.scribd.com/doc/209050732/MtGox-Situation-Crisis-Strategy-Draft

On the page with the Strategy Timeline infographic, it states that step 1 is Assets/Liabilities cover the 624,809 Bitcoin.  It says its methods, but then says Target: 50% covered?  Thoughts?  How could they legally have obtained that many BTC?  Someone offering to buy the company, maybe expecting huge future profits from running an exchange for cryptos?  MtGox is dead, but their trading engine and staff still have some value, but is it possible they have sold for 50% of their Bitcoins or do they mean 50% of their initial 200,000 BTC target?  Goxxed again?

[1713880127]

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[1713880127]

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[digimag]

They underestimate their liability anyway…

744,408 BTC (MtGox av price 160 USD= 119,105,280 USD)

The real price is 500 USD if not more.

[BreathOfZen]

I think that the report is probably fake, but also that they are probably much less then 50% solvent.  For them to have to shut down fiat and btc withdrawals their solvency must have been running on vapors.

[orlinm]

They underestimate their liability anyway…

744,408 BTC (MtGox av price 160 USD= 119,105,280 USD)

The real price is 500 USD if not more.

I think in the end they will offer users to withdraw fiat only and they will pay $100 - $150 per bitcoin or whatever was the last price. I also think that now they will try to sell their clients' bitcoins to other exchanges at $500+ . This is the only way they can pay. Either that or they will not pay anything to anyone.

[T.Stuart]

They underestimate their liability anyway…

744,408 BTC (MtGox av price 160 USD= 119,105,280 USD)

The real price is 500 USD if not more.

I think in the end they will offer users to withdraw fiat only and they will pay $100 - $150 per bitcoin or whatever was the last price. I also think that now they will try to sell their clients' bitcoins to other exchanges at $500+ . This is the only way they can pay. Either that or they will not pay anything to anyone.

Yes... but you are forgetting that apparently they don't have their client's bitcoins!

I'm starting to think that this could be the sale of the century for Mark et al.

EDIT: a team with the skills needs to hunker down and start an audit of every transaction related to Gox since the start. Is this already underway somewhere?

[Squeaker]

This is just a good example of why we need to pressure ALL exchanges to make available full and complete transaction histories for our accounts. Not just the most recent X on a ledger page somewhere (or legend page, depending on your spelling skills)

CryptoStocks and Vircurex... while I have always liked Vircurex for their any-pair reversible trading, he seriously has got to do something about transaction histories... we HAVE to be able to get our complete history (preferably in CSV form, but even plain unformatted text would be acceptable too, compared to what we have now)

How many times I have placed orders on CryptoStocks for example, just to have the issuer wipe the order book for one reason or another, and I am left with no idea where I had those sells placed, and history doesn't go back far enough for me to be able to know what my buy-in point was? (forget about trying to graph out my portfolio...)

It seems to me, having a per-account audit available (via transaction history) is the absolute minimum required for any business involved in handling our funds. Every last bit of a transaction that impacts our balance should be reflected, with a separate entry for related fees charged as well.

Just how many exchanges, right now, are we able to account for our balances properly?

And, if we can't even be able to audit our own accounts, doesn't that say something about the exchange being able to audit their whole business? They should be pulling from all of the same data.

Just a peeve of mine when dealing with many exchanges, how logging/auditing seems to be such a low priority, when it should be the top priority.

=squeak=

edit: oh... and "but you can get it through the API"... just isn't good enough...

[Nagle]

I suspect that document is fake. Likely it was created outside Mt. Gox, or it was created within Mt. Gox as a deniable deception.

It's in the interest of Mt. Gox management that outside "hackers", not they, be blamed for losses. That's suspicious. No way could they lose that much via an outside attack. Inside help would be needed.

[Phinnaeus Gage]

They underestimate their liability anyway…

744,408 BTC (MtGox av price 160 USD= 119,105,280 USD)

The real price is 500 USD if not more.

I think in the end they will offer users to withdraw fiat only and they will pay $100 - $150 per bitcoin or whatever was the last price. I also think that now they will try to sell their clients' bitcoins to other exchanges at $500+ . This is the only way they can pay. Either that or they will not pay anything to anyone.

Yes... but you are forgetting that apparently they don't have their client's bitcoins!

I'm starting to think that this could be the sale of the century for Mark et al.

EDIT: a team with the skills needs to hunker down and start an audit of every transaction related to Gox since the start. Is this already underway somewhere?

Yes! Jack Black is on it...


"And poof! Bitcoinica disappears."

...along with his side project.


"Stand over there holding a frappuccino so that I can adjust the sights."

[hilariousandco]

I think that the report is probably fake, but also that they are probably much less then 50% solvent.  For them to have to shut down fiat and btc withdrawals their solvency must have been running on vapors.

Yeah, people really need to wait for some concrete / confirmed info before commenting on this stuff. There's a lot of misinformation and speculation about, but I'm sure all will be revealed shortly.

[T.Stuart]

I suspect that document is fake. Likely it was created outside Mt. Gox, or it was created within Mt. Gox as a deniable deception.

It's in the interest of Mt. Gox management that outside "hackers", not they, be blamed for losses. That's suspicious. No way could they lose that much via an outside attack. Inside help would be needed.

I think it could possibly be a half-assed report knocked up on behalf of a potential buyer of Gox who released it in spite when their offer was refused. TwoBitIdiot, who "released" the document, said  "I also received a 27 page business plan, written in 2014, entitled “Business Plan Europe 2014-2017”." Apparently this document is a "polished" study - perhaps the real internal Gox proposal.

http://two-bit-idiot.tumblr.com/post/77817993185/motives-disclosures-suspicions-mt-gox-update#disqus_thread

Just speculating of course.

[hgamezoom]

Where are Gox's employee ? They were still working on verifying accounts just yesterday!

Now the site is shut down, it is reported by the protester that no employee come to office today, seems they goona lose their job, why not say something to the public?

[hilariousandco]

Where are Gox's employee ? They were still working on verifying accounts just yesterday!

Now the site is shut down, it is reported by the protester that no employee come to office today, seems they goona lose their job, why not say something to the public?

Is that guy still outside? They probably haven't been turning up because they relocated offices for 'security reasons'. Wether it was a double bluff or not, I don't know.

[richmke]

Transaction Maleabliilty caused the lost of 750,000 of BTC. What caused the loss of $30 million fiat?

[T.Stuart]

After looking at things for a day, I'm sure the crisis document is fake.

I think Two-Bit-Idiot has not confirmed all the figures with multiple sources close to Gox as he says. He's now off spinning yarns about endless dark rabbit holes and such on his blog.

Whether it was faked in collusion with Gox or some external trouble-maker I don't know.

[bitcoinminer]

After looking at things for a day, I'm sure the crisis document is fake.

I think Two-Bit-Idiot has not confirmed all the figures with multiple sources close to Gox as he says. He's now off spinning yarns about endless dark rabbit holes and such on his blog.

Whether it was faked in collusion with Gox or some external trouble-maker I don't know.

It would take 30 seconds for GoXXX to crack open their books and show everybody, and give out the cold wallet addresses to verify the coins are there.

[melvster]

http://es.scribd.com/doc/209050732/MtGox-Situation-Crisis-Strategy-Draft

On the page with the Strategy Timeline infographic, it states that step 1 is Assets/Liabilities cover the 624,809 Bitcoin.  It says its methods, but then says Target: 50% covered?  Thoughts?  How could they legally have obtained that many BTC?  Someone offering to buy the company, maybe expecting huge future profits from running an exchange for cryptos?  MtGox is dead, but their trading engine and staff still have some value, but is it possible they have sold for 50% of their Bitcoins or do they mean 50% of their initial 200,000 BTC target?  Goxxed again?

Under fractional reserve banking this makes it one of the best capitalized financial institutions in the world.  They are probably far more solvent than most banks.

So, what's the problem here.

The problem is that bitcoin is so darn efficient.

The cost of moving bitcoins from your trusted third party to your own storage is minimal.  Compare that with the cost of withdrawing cash from a bank -- almost impossible.  That's why banks get away with 10:1 reserve rations, and sometimes more.  

And gox is a 'victim' of bitcoin's efficiency.  It may be possible to save gox ... but I think other exchanges will take market share...

[richmke]

Under fractional reserve banking this makes it one of the best capitalized financial institutions in the world.  They are probably far more solvent than most banks.

Your analysis presumes that MtGox is a bank, and that the BTC is their "reserves". Unfortunately, they are not a bank. They do not have "loans receivables" and other assets that makes their overall balance sheet solvent.

[jr3951]

they currently at least have an excellent opportunity to buy some of their debt back at 10:1 on bitcoin builder

[repentance]

I suspect that document is fake. Likely it was created outside Mt. Gox, or it was created within Mt. Gox as a deniable deception.

It's in the interest of Mt. Gox management that outside "hackers", not they, be blamed for losses. That's suspicious. No way could they lose that much via an outside attack. Inside help would be needed.

I think it could possibly be a half-assed report knocked up on behalf of a potential buyer of Gox who released it in spite when their offer was refused. TwoBitIdiot, who "released" the document, said  "I also received a 27 page business plan, written in 2014, entitled “Business Plan Europe 2014-2017”." Apparently this document is a "polished" study - perhaps the real internal Gox proposal.

http://two-bit-idiot.tumblr.com/post/77817993185/motives-disclosures-suspicions-mt-gox-update#disqus_thread

Just speculating of course.

It's likely that the 27 page Business Plan was put together a long time ago and reflects plans which might have been viable under the circumstances which existed at the time (thus the absence of any reference to MtGox's financial woes).  Trying to take elements of it and turn it into a "Crisis Strategy" which will work under totally changed circumstances is an exercise in futility. 

In fact, MtGox should have paid proper consultants to come up with a proper crisis strategy if they believed there was any hope of the company being salavaged.