MTGOX Statement *NEW MAR 3RD*

[casinocoin]

Looks like they have updated their homepage.
Like a lot of you posting, I call fraud and believe MTGOX is committing major criminal negligence. Did they not monitor things on a daily basis.. There must have been a whole lot of ass picking going on.


Mark Karpeles
Representative Director
MtGox Co., Ltd.
Shibuya 2-11-5
Shibuya-ku, Tokyo

ANNOUNCEMENT REGARDING AN APPLICATION FOR COMMENCEMENT OF A PROCEDURE OF CIVIL REHABILITATION

MtGox Co., Ltd. made today an application for commencement of a procedure of civil rehabilitation (minji saisei) at the Tokyo District Court. This application was accepted on the same day. Further, MtGox Co., Ltd is under several orders issued by the Court : a preservative order prohibiting it from paying its debts, transferring its assets or establishing security over its assets, an order establishing a comprehensive prohibition of forced attachment of its assets by its creditors and a supervisory order ordering supervision by a supervisory committee. In consequence, MtGox hereby informs you as follows.
We first express our most sincere regrets and apologies for this situation and for causing so much inconvenience to all our users and other interested parties. We will fully respect the above orders and maintain our assets with all the necessary care.

Financial situation, reasons and timeline leading to this application
(1) As of now, the liabilities of MtGox Co., Ltd exceed its assets and its financial situation is as follows:

Total amount of assets    3,841,866,163
Total amount of current liabilities    6,501,119,371
(2)   The increase of current liabilities may be linked to a loss of bitcoins and customer funds. These are now investigated by an expert and all efforts are made to discover the truth. This application was prompted by the following troubles:

At the start of February 2014, illegal access through the abuse of a bug in the bitcoin system resulted in an increase in incomplete bitcoin transfer transactions and we discovered that there was a possibility that bitcoins had been illicitly moved through the abuse of this bug.
As a result of our internal investigation, we found that a large amount of bitcoins had disappeared. Although the complete extent is not yet known, we found that approximately 750,000 bitcoins deposited by users and approximately 100,000 bitcoins belonging to us had disappeared.
We believe that there is a high probability that these bitcoins were stolen as a result of an abuse of this bug and we have asked an expert to look at the possibility of a criminal complaint and undertake proper procedures.
On the same day (24th), we found out large discrepancies between the amount of cash held in financial institutions and the amount deposited from our users. The amounts are still under investigation and may vary but they approximate JPY 2.8 billion.
We are investigating the causes of these problems. Since there are probably a variety of causes including hacking by third parties, we need to investigate a huge amount of transaction reports in order to establish the truth. As of this date, we cannot confirm the exact amount of missing deposit funds and the total amount of bitcoins which disappeared.
Once we discovered that bitcoins had disappeared and the discrepancies between cash funds and deposit balances, we judged that it would be difficult to continue our activities normally and we therefore closed our site at noon on the 25th (Japan time).

(3)   Regarding the filing of a complaint or damages report, an expert has been mandated and investigations have started. We will make all efforts to ensure that crimes are punished and damages recovered.
Further we will fully cooperate with inquiries from authorities and investigations related to this matter, in Japan or overseas.

In order to increase repayments to our creditors, it is necessary to explore the possibility of having MtGox Co., Ltd. continue its business. This is why the civil rehabilitation procedure has been chosen, Rebuilding MtGox Co., Ltd under the supervision of the court in a legally organized procedure while giving proper explanations will not be for the sole benefit of the company but for that of the whole bitcoin community.
All efforts will now be made to restore the business and recover damages to repay debts to creditors. We hope for the understanding and cooperation of all.

Outline of the application
(1)   Application date   February 28, 2014
(2)   Jurisdiction   Tokyo District Court
(3)   Counsel of applicant
Baker & McKenzie (Gaikokuho Joint Enterprise)
Attorney-at-law   Junko Suetomi
Attorney-at-law   Yamamoto Hideyuki
Yodoyabashi & Yamagami Legal Professional Corporation
Attorney-at-law   Akio Shinomiya
Attorney-at-law   Kazumasa Kawai

(4)   Supervisor   Nagashima Ohno & Tsunematsu
Attorney-at-law   Nobuaki Kobayashi
(5)   Investigator   idem
(6)   Case no.    2014 (sai) 12Civil rehabilitation commencement application

Contact information
A call center has been established to respond to all inquiries. The call center is planned to start on March 3, 2014. All inquiries to MtGox Co., Ltd. should be made to the following telephone number:
Telephone number   +81 3-4588-3921
Working hours   Monday to Friday 10am to 5pm (Japan time)

Please refrain from contacting the office of the supervisor/investigator.

--- TIP for the topic. 12vaUMDQrw9wi6dvZ6E1GH3CVoCiRs2NsK ---c2tech---

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[eleuthria]

Cute.  ~40% of the assets (2.8b JPY in bank balances, the easiest ones to notice missing) were unaccounted for?  This isn't just incompetence.  This is criminal negligence.

[mcleo]

"On the same day (24th), we found out large discrepancies between the amount of cash held in financial institutions and the amount deposited from our users. The amounts are still under investigation and may vary but they approximate JPY 2.8 bil"

So a hacker made off with 700,000+ BTC and a magical fairy was able to hack the bank accounts.

Either a completely incompetence exchange or well thought out fraud.

In no way am I an I.T. expert, but I strongly believe it is the latter.

[spartagates]

850000 coins 

[dyask]

The worse thing is that they are still claiming it is a bug in Bitcoin instead of owning up to that fact that their software and procedures were at fault!   That's leads me to believe fraud on their part.   

[jojo69]

The worse thing is that they are still claiming it is a bug in Bitcoin instead of owning up to that fact that their software and procedures were at fault!   That's leads me to believe fraud on their part.   

this, malleability as a "bug" has been so debunked, outrageous

[frankenmint]

aaaaaaaaaaaaaaaaaannnnnnnnnnnnnddddddd its gone.


All hell breaks loose in 3....2......1

[btbrae]

So let me get this right, they lost $30 million that's MILLION, USD in their actual bank accounts, BESIDES the loss of BTCs. I don't even...

Or does this mean they were running fractional reserve and are now trying to cover it up as "discovered discrepancies on the 24th Feb". That'd be my guess.

[Justin00]

b..b...but the withdawl tests... wont somebody think of the withdraw tests!!!!

wheres the ol bitcoin foundation now... wonder how much they all split it.

[Artlover]

Given he apparently left France in a hurry, moving to Japan practically over night after his employers accused him of computer fraud, I think there is valid reason to suspect that it's more than incompetence, and that illegal activity on his part here is likely.

[BruceFenton]

It would be good to know who the "expert" is and get reports from him.

[sgravina]

A new, better MtGox!  A MtGox that does't lose customers funds.  This is such an awesome idea.

It's good for them to build on their strengths rather then trying to compete with the bitcoin eater address.

[turvarya]

There are just 2 realististic possibilities:

1. Mark Karpeles stole it
2. Somebody else from MtGox stole it.

The whole "there was a hacker, who used a bug to steal the Money"-Argument is just stupid.

[kevindeangelis]

To quote a scene from Office Space ... 

Money Laundering ... to .. to .. (looking up definition of money laundering) ...

[Ekaros]

There are just 2 realististic possibilities:

1. Mark Karpeles stole it
2. Somebody else from MtGox stole it.

The whole "there was a hacker, who used a bug to steal the Money"-Argument is just stupid.

This is the likeliest scenario if the amounts are really wrong...

Unless they have had some sort of bug in their implementation, which I can't leave out either. Meaning that trades have not been balanced on sheets...

[Rampion]

"On the same day (24th), we found out large discrepancies between the amount of cash held in financial institutions and the amount deposited from our users. The amounts are still under investigation and may vary but they approximate JPY 2.8 bil"

What a fucking joke. More BS from Gox. It's impossible they did not realize they had less money in the bank than they were supposed to have. To begin with they did know very well they were short of aprox. $10M because of  Coinlab and DHS.

Something very fishy is going on. I hope they go down for good and never come back.

[ab8989]

We found that approximately 750,000 bitcoins deposited by users and approximately 100,000 bitcoins belonging to us had disappeared.
We have asked an expert to look at the possibility of a criminal complaint and undertake proper procedures.
On the same day (24th), we found out large discrepancies between the amount of cash held in financial institutions and the amount deposited from our users.

I am not sure what the text is referencing when it says "On the same day". Does it mean that they found out the cash missing from banks on the same day when they asked experts to look at things or does it mean that they found out the missing bitcoins on the same day when they found the missing cash on the 24th february.

I believe the motivation of this sentence is to claim that they filed for bankruptcy immediately after for the first time noticing that they are insolvent. I believe many countries have laws that is illegal to continue operation like nothing happened after you have found your company insolvent. I do not know about Japan. Given this assumed motivation I would assume the sentence wants to say that the ambiguous "same day" statement referes to the finding of missing bitcoins rather than asking experts which is pretty irrelevant which day that happened. I am sure they have asked experts on multitude of days.

However I think whatever they say about they found out on 24th of feb is a lie because are these issues not already mentioned on the leaked crisis memo which was done many weeks ago? How did the leaked crisis memo know about this stuff if MtGox only for the first time found about this on 24th of feb?

[rat]

they are proven liars about everything that they have said so far...

why are so many reaching to believe they are honest - and just victims...?

[Revelations86]

Something smells fishy about his statement.  Either that or he was truly incompetent.

[Loozik]

At the start of February 2014, illegal access through the abuse of a bug in the bitcoin system resulted in an increase in incomplete bitcoin transfer transactions and we discovered that there was a possibility that bitcoins had been illicitly moved through the abuse of this bug.
As a result of our internal investigation, we found that a large amount of bitcoins had disappeared. Although the complete extent is not yet known, we found that approximately 750,000 bitcoins deposited by users and approximately 100,000 bitcoins belonging to us had disappeared.
We believe that there is a high probability that these bitcoins were stolen as a result of an abuse of this bug and we have asked an expert to look at the possibility of a criminal complaint and undertake proper procedures.

So the hack took place between 1 Feb 2014 and 6 Feb 2014 (6 Feb is I believe when btc withdrawals were halted at Gox). During less than a week 850,000 were stolen.

Show me this in the blockchain  

EDIT: Can someone who uses blockchain API hooked to a statistical analysis software please calculate value / amount of coins sent on the Bitcoin network in period 1 - 6 Feb 2014. I want to know what % of all bitcoins sent in this period were the ''stolen'' coins.

[seriouscoin]

Only morons would believe a word from Mark

Including ppl still think this is "incompetent"

[bitserve]

I am not sure what the text is referencing when it says "On the same day". Does it mean that they found out the cash missing from banks on the same day when they asked experts to look at things or does it mean that they found out the missing bitcoins on the same day when they found the missing cash on the 24th february.

I believe the motivation of this sentence is to claim that they filed for bankruptcy immediately after for the first time noticing that they are insolvent. I believe many countries have laws that is illegal to continue operation like nothing happened after you have found your company insolvent. I do not know about Japan. Given this assumed motivation I would assume the sentence wants to say that the ambiguous "same day" statement referes to the finding of missing bitcoins rather than asking experts which is pretty irrelevant which day that happened. I am sure they have asked experts on multitude of days.

Yes, they should have had its insolvency reported as soon as they were aware of it. Now they are the ones that need to report that they weren't, which is very easy: Just publish the addresses of all cold wallets that belong to mtgox at each moment in time so that it is possible see exactly which balance they had at point. The same for bank accounts.

I donno which fantasy world does Karpeles thinks he live, but he has make some vague claims that he will have to back up with evidence. Not doing so means just one thing.

And no, its not that were just criminal negligent by not periodically reconciling balances... They were in fact doing it "All the time":

http://www.reddit.com/user/WeAreMtGox

WeAreMtGox 301 puntos 10 meses atrás

NO. Everything is accounted for (BTC and money). Fractional reserve is absolutely against our principles. In fact 90~95% of BTC are held in cold storage.

[–]WeAreMtGox 10 puntos 8 meses atrás

Absolutely not true. We do not operate a fractional reserve exchange. 100% of deposits and Bitcoins are accounted for at all times.


That was 8/10 months ago... Were they lying then or now? Pick your choice, because the two just doesn't match.

[nioc]

They were lying then and now

[Lethn]

If anyone ever puts their money into MTGOX and then complains afterwards after another catastrophe happens they really are beyond help.

[silenstorm]

There are some crazy transactions at bitstamp recently!

https://i.imgur.com/Eqp5XGs.png
https://i.imgur.com/2WGUvbL.png

Could it be mtgox buying cheap coins, so they can make profit later?

[alexeft]

The worse thing is that they are still claiming it is a bug in Bitcoin instead of owning up to that fact that their software and procedures were at fault!   That's leads me to believe fraud on their part.   

this, malleability as a "bug" has been so debunked, outrageous

He still means to do damage to bitcoin itself, doesn't he!!!

[grifferz]

Given he apparently left France in a hurry, moving to Japan practically over night after his employers accused him of computer fraud, I think there is valid reason to suspect that it's more than incompetence, and that illegal activity on his part here is likely.

That's interesting. Do you have any reference for this, even if it's just a reference to a rumour?

[Unacceptable]

   It makes sense now......that's why he couldn't/wouldn't give Coinbase the documents they needed......the cover would have been blown then,instead of later 

[ivroer]

So the hack took place between 1 Feb 2014 and 6 Feb 2014 (6 Feb is I believe when btc withdrawals were halted at Gox). During less than a week 850,000 were stolen.

Show me this in the blockchain  

EDIT: Can someone who uses blockchain API hooked to a statistical analysis software please calculate value / amount of coins sent on the Bitcoin network in period 1 - 6 Feb 2014. I want to know what % of all bitcoins sent in this period were the ''stolen'' coins.

I'm sure there will be more detailed blockchain forensics to come, but for now here's some pretty basic info.

Total output volume (includes "change" returning to peoples wallets)
https://blockchain.info/charts/output-volume?timespan=60days&daysAverageString=1&scale=0&address=
Estimated output volume not including change (some of this is "guess" work)
https://blockchain.info/charts/estimated-transaction-volume?timespan=60days&daysAverageString=1&scale=0&address=

If you expand the date range out, you can see there's nothing in your date range that really stands out from this basic analysis.

[seriouscoin]

  It makes sense now......that's why he couldn't/wouldn't give Coinbase the documents they needed......the cover would have been blown then,instead of later 

Yup.... but not Coinbase.... its Coinlab....

[Rannasha]

There are some crazy transactions at bitstamp recently!

https://i.imgur.com/Eqp5XGs.png
https://i.imgur.com/2WGUvbL.png

Could it be mtgox buying cheap coins, so they can make profit later?

MtGox is under control of Japanese authorities now. They can barely take a leak without supervision.

Anyway, I hope that the Japanese police will enlist the aid of one or more Bitcoin experts to do a thorough blockchain-analysis of the claims of theft by Gox.

[Unacceptable]

  It makes sense now......that's why he couldn't/wouldn't give Coinbase the documents they needed......the cover would have been blown then,instead of later 

Yup.... but not Coinbase.... its Coinlab....

Doh,my bad,thinking on the fly is my one true weakness 

[Brangdon]

So the hack took place between 1 Feb 2014 and 6 Feb 2014 (6 Feb is I believe when btc withdrawals were halted at Gox). During less than a week 850,000 were stolen.

I read them as saying that's when they discovered the loss, but the loss itself might have happened earlier. Basically, they saw a lot of failed transactions, investigated and discovered the cause was transaction mutability and that it could have caused coin loss, investigated some more and realised they'd lost vastly more than those recent failed transactions.

And they don't know how the losses happened. Though they want to blame transaction mutability for the big losses, that's just a guess, and they seem aware it doesn't account for the loss of fiat money that has also happened. They mention "a variety of causes".

[Joohansson]

All efforts will now be made to restore the business and recover damages to repay debts to creditors

Does that means there is still (very little) hope to get bitcoins back? Am I a creditor if I have goxmoney?

[Rampion]

As I wrote in September 2013 during a typical argument with sturle:

Defendants are informed and believe that in March and April, 2013 MtGox customers, at the
suggestion of CoinLab, deposited $12,788,701.08 into one or more CoinLab bank accounts;
CoinLab then caused the amount of such funds to be credited to such customers' MtGox
accounts but CoinLab did not transfer the actual funds into the MtGox bank account. As a
result, such customers' MtGox account reflected a higher amount of currency funds available
to such customers than were actually in the MtGox bank account. In April, 2013, and upon
the demand of MtGox, CoinLab transferred a portion of those amounts, $ 7,473,490.29, to the
MtGox bank account, leaving a balance of approximately $ 5,315,210.79 to be transferred to
the MtGox account and which is being wrongfully held by CoinLab.

So they they are admitting they have a big hole, and they do not say anywhere that they had to cover the hole with their own money (I would have stated that clearly in the official document, to wipe out doubt about insolvency - wouldn't have you?). The only hard cold fact they are stating is "such customers' MtGox account reflected a higher amount of currency funds available to such customers than were actually in the MtGox bank account".

The most plausible explanation to the ongoing delays, given the above and the other information available to the public, is that Gox is low on cash and running a fractional reserve.

So, IMO the big question is not "if" they knew they were short of customer's money because it is painfully obvious THEY KNEW, the big question is: WHERE DID THAT MONEY GO???

$5.5M are held by Department of Home Security (the "Dwolla situation") and $5.3M by Coinlab, that's clear. But where did the rest of the money go, as they are claming they have a hole of $22M? We need to factor in that they have made +$10M in trading fees during the last year, so in reality the missing money is at least $32M...

Crazy stuff, you really can't make this shit up... And I'd bet that the hole was caused by a a few things compounded together:

1) Bad management, eg. considering customer funds as "assets" and thus using them to cover operational expenses believing they would cover that up with fees later on (something similar to what they did by crediting customers accounts with money they did not held in reality as per the Coinlab situation). Maybe they even tried to do some arbitrage with customers money and they fucked up - what I know for sure is that incompetence should NEVER be underestimated.

2) Seizures by LE. We know for sure that DHS is holding $5M of Gox's customers money and that $5.3M are held by Coinlab. It doesn't look like there's more than that because in the leaked docs they clearly listed that money (DHS+Coinlab) as "assets", and there was no other entry for other money that could have potentially been held by other parties.

3) Outright stealing. Right now that seems more plausible to me than a few months ago. I always thought Gox was "basically honest", but after seeing their business plan it seems to me they were just a bunch of amateurs playing with third party money like it was their own - that's criminal negligence at best. They were operating an exchange but their accounting looks like the one of a bank, listing customer deposits as assets of the company, like they could use that money to cover their own expenses. That's crazy (and criminal) in my book. At this point I wouldn't be surprised they even took out dividends from the company at some point, while knowing they were running fractional and virtually bankrupt... And that's stealing.

(crosspost from the Wall Observer thread)

 

[runam0k]

I stubbed my big toe the other day -- I looked down to see what it was and low and behold, transaction malleability. It's everywhere!

[Rampion]

I stubbed my big toe the other day -- I looked down to see what it was and low and behold, transaction malleability. It's everywhere!

Everyone is ragging on the poor guy but won't give him a chance to prove himself.  He's been handling MTGOX for years now with no problems and now because he has a small issue everybody wants to crucify him.  He looked really heartbroken at the press conference and I belive him when he says he is trying to sort it all out.  I believe the bug in the system is true cause for this and that the powers that be behind the Bitcoin program are not helping any.  Give Mark a break!

Sure, the "bug" made he lose 850k coins to hackers in a few days + dozens of millions in USD. Wow, we just discovered that the US dollar is also vulnerable to transaction malleability.

[vivalinux]

As I wrote in September 2013 during a typical argument with sturle:

Defendants are informed and believe that in March and April, 2013 MtGox customers, at the
suggestion of CoinLab, deposited $12,788,701.08 into one or more CoinLab bank accounts;
CoinLab then caused the amount of such funds to be credited to such customers' MtGox
accounts but CoinLab did not transfer the actual funds into the MtGox bank account. As a
result, such customers' MtGox account reflected a higher amount of currency funds available
to such customers than were actually in the MtGox bank account. In April, 2013, and upon
the demand of MtGox, CoinLab transferred a portion of those amounts, $ 7,473,490.29, to the
MtGox bank account, leaving a balance of approximately $ 5,315,210.79 to be transferred to
the MtGox account and which is being wrongfully held by CoinLab.

So they they are admitting they have a big hole, and they do not say anywhere that they had to cover the hole with their own money (I would have stated that clearly in the official document, to wipe out doubt about insolvency - wouldn't have you?). The only hard cold fact they are stating is "such customers' MtGox account reflected a higher amount of currency funds available to such customers than were actually in the MtGox bank account".

The most plausible explanation to the ongoing delays, given the above and the other information available to the public, is that Gox is low on cash and running a fractional reserve.

So, IMO the big question is not "if" they knew they were short of customer's money because it is painfully obvious THEY KNEW, the big question is: WHERE DID THAT MONEY GO???

$5.5M are held by Department of Home Security (the "Dwolla situation") and $5.3M by Coinlab, that's clear. But where did the rest of the money go, as they are claming they have a hole of $22M? We need to factor in that they have made +$10M in trading fees during the last year, so in reality the missing money is at least $32M...

Crazy stuff, you really can't make this shit up... And I'd bet that the hole was caused by a a few things compounded together:

1) Bad management, eg. considering customer funds as "assets" and thus using them to cover operational expenses believing they would cover that up with fees later on (something similar to what they did by crediting customers accounts with money they did not held in reality as per the Coinlab situation). Maybe they even tried to do some arbitrage with customers money and they fucked up - what I know for sure is that incompetence should NEVER be underestimated.

2) Seizures by LE. We know for sure that DHS is holding $5M of Gox's customers money and that $5.3M are held by Coinlab. It doesn't look like there's more than that because in the leaked docs they clearly listed that money (DHS+Coinlab) as "assets", and there was no other entry for other money that could have potentially been held by other parties.

3) Outright stealing. Right now that seems more plausible to me than a few months ago. I always thought Gox was "basically honest", but after seeing their business plan it seems to me they were just a bunch of amateurs playing with third party money like it was their own - that's criminal negligence at best. They were operating an exchange but their accounting looks like the one of a bank, listing customer deposits as assets of the company, like they could use that money to cover their own expenses. That's crazy (and criminal) in my book. At this point I wouldn't be surprised they even took out dividends from the company at some point, while knowing they were running fractional and virtually bankrupt... And that's stealing.

(crosspost from the Wall Observer thread)

 

Totally agree with what u said.

[fryarminer]

"These are now investigated by an expert"
I just hope that this single "expert" has any idea what bitcoin is.

[brokenchair]

(1) As of now, the liabilities of MtGox Co., Ltd exceed its assets and its financial situation is as follows:

Total amount of assets    3,841,866,163
Total amount of current liabilities    6,501,119,371

In fantasy land gox pays everyone a little more than half of their coins owed and calls it a day
 

[grifferz]

Given he apparently left France in a hurry, moving to Japan practically over night after his employers accused him of computer fraud, I think there is valid reason to suspect that it's more than incompetence, and that illegal activity on his part here is likely.

That's interesting. Do you have any reference for this, even if it's just a reference to a rumour?

Ah, I've seen http://gawker.com/does-mt-goxs-ceo-have-a-secret-history-of-online-payme-1534752110 now - is that the one?

[runam0k]

He's been handling MTGOX for years now with no major problems and now because he has a small issue it's reached a point where he can't hide it anymore everybody wants to crucify him.

FTFY.

Or were you being sarcastic?

[spin]

They still need someone to write things CLEARLY.

My thoughts:
Apology first.  (though this may be a cultural thing)
Liabilities: provide breakdown?  At what price? Currency? Breakdown of liabilities by currency?
What is the increase?  Who is the expert(s)?
Comment On the same day seems to refer to an earlier statement but it is unclear what it refers to.  What happened on that same day?  The investigation?  All that seems unclear is that they do not seem to be able to tell when they found out about the gap (trying to avoid jail time?)

Clear as mud...

[techstorm3]

No one could be that incompetent, losing 800K btc, if it looks like fraud, smells like fraud and sounds like fraud, guess what!!

 

[Mowcore]

Given he apparently left France in a hurry, moving to Japan practically over night after his employers accused him of computer fraud, I think there is valid reason to suspect that it's more than incompetence, and that illegal activity on his part here is likely.

That's interesting. Do you have any reference for this, even if it's just a reference to a rumour?

Ah, I've seen http://gawker.com/does-mt-goxs-ceo-have-a-secret-history-of-online-payme-1534752110 now - is that the one?

Fuck Gawker comments..

[loewen.brad]

I'm still gonna have to go with the incompetence argument. After all... Mt. Gox WAS originally created as a website for people to trade Magic: The Gathering cards with each other. Not EXACTLY something that takes a masters degree in business and economics to run properly, which is precisely what someone who heads a multi-million dollar financial institution should have.

[BitcoinObmen]

There are just 2 realististic possibilities:

1. Mark Karpeles stole it
2. Somebody else from MtGox stole it.

The whole "there was a hacker, who used a bug to steal the Money"-Argument is just stupid.

+1

[Loozik]

I'm still gonna have to go with the incompetence argument.

The incompetence argument (nice, naive fatty guy, probably incompetent) was created with fabricated ''leaks'', released on the right moments directed to the right people (the clueless ones):
- IRC chat discussions
- recovery plan
- business plan
- etc

The incompetence argument was so frequently used that it got imprinted in our brains. The incompetence served only as distraction for us so that we would never see that the grand theft of $ 0.5 billion was happening.

[Zeeks]

Anyone who even starts to believe any of that for even a moment ought to drop by service discussion or r/bitcoin and see how people are uncovering hundreds of thousands of bitcoins still sitting untouched in MtGOX wallets. As if somehow no one would notice.

[donking]

I can not see any way justice being served and Mark Gox coming out of this ordeal with any coins to his name.

[davida]

So, for less than 30 million usd technically a new owner could step in and restore all mtgox balances and continue business as normal?  (i say normal, obviously would have a lot of trust to regain)   

Surely in the long term some smart investors would be all over that???

[BitOnyx]

Interesting is this might be one of first cases where bitcoins would be seriously taken as assets. I don't like some of changes force in all of this statements but i bet they get good enough lawyers for that. Ironically there wouldn't be so many problems if maybe they bought themselves insurance or store data off-line. Or maybe just limit on bitcoins stored on people accounts. At some point they were not only exchange but also bank in some way.

[ab8989]

(1) As of now, the liabilities of MtGox Co., Ltd exceed its assets and its financial situation is as follows:
Total amount of assets    3,841,866,163
Total amount of current liabilities    6,501,119,371

This statement looks horribly unprofessional. Why is there no indication of which currency is used? I assume those are yen, but I should not have to guess whether they are yen or not!!!

If we convert the numbers to USD by approximately dividing by 100 we get that the assets are 38MUSD and liabilities 65MUSD.

The numbers from crisis memo were fiat assets 32MUSD and liabilities 55MUSD. We are in the same ballpark so that gives some indication that assumption the statement was in yen might have been correct.

However I took the numbers from the crisis draft without BTC. That indicates the effect of the lost 750kBTC is not included at all! Using USD500/BTC gives an additional liability of 375MUSD or 37,500,000,000 yen which is not included in the statement today!!!

I am out of ideas for any alternative explanation how these numbers could make any sense at all in some other way.

[exocytosis]

Given he apparently left France in a hurry, moving to Japan practically over night after his employers accused him of computer fraud, I think there is valid reason to suspect that it's more than incompetence, and that illegal activity on his part here is likely.

Word.

[exocytosis]

"These are now investigated by an expert"
I just hope that this single "expert" has any idea what bitcoin is.

The expert is called Mark Karpeles.

[electronistul]

I'm fascinated how nobody reports back on this forum (or I'm idiotic enough to not have found the relevant thread around here yet) on telephone inquiries.
I mean, ffs, they did list a couple of telephone numbers on their "press release", one of them was for English speaking customers, some thousand people must have already called over there - did they say anything at all ?!
I would probably pop only the relevant Qs at hand:
- "Will MtGox reimburse anything ?"
- "Will I get back a fraction of the fiat/BTC I had on my account at the time you wiped the site off the internet ?"
- "Was Karpeles buying some ~6k coins on Stamp earlier today so he could free his family from wrongdoers ?"
- "Are you (the telephone operator) gay ?"
- "Does God exist?"
... and some others I can swiftly think of ... 

[fryarminer]

I'm fascinated how nobody reports back on this forum (or I'm idiotic enough to not have found the relevant thread around here yet) on telephone inquiries.
I mean, ffs, they did list a couple of telephone numbers on their "press release", one of them was for English speaking customers, some thousand people must have already called over there - did they say anything at all ?!
I would probably pop only the relevant Qs at hand:
- "Will MtGox reimburse anything ?"
- "Will I get back a fraction of the fiat/BTC I had on my account at the time you wiped the site off the internet ?"
- "Was Karpeles buying some ~6k coins on Stamp earlier today so he could free his family from wrongdoers ?"
- "Are you (the telephone operator) gay ?"
- "Does God exist?"
... and some others I can swiftly think of ... 

Someone did report last evening on a different thread. All they did was refer him to the website.

[Rampion]

I'm fascinated how nobody reports back on this forum (or I'm idiotic enough to not have found the relevant thread around here yet) on telephone inquiries.
I mean, ffs, they did list a couple of telephone numbers on their "press release", one of them was for English speaking customers, some thousand people must have already called over there - did they say anything at all ?!
I would probably pop only the relevant Qs at hand:
- "Will MtGox reimburse anything ?"
- "Will I get back a fraction of the fiat/BTC I had on my account at the time you wiped the site off the internet ?"
- "Was Karpeles buying some ~6k coins on Stamp earlier today so he could free his family from wrongdoers ?"
- "Are you (the telephone operator) gay ?"
- "Does God exist?"
... and some others I can swiftly think of ... 

Here a link to a Gox call center conversation: http://www.youtube.com/watch?v=6HJt-MpoTP4

[frito]

I'm fascinated how nobody reports back on this forum (or I'm idiotic enough to not have found the relevant thread around here yet) on telephone inquiries.
I mean, ffs, they did list a couple of telephone numbers on their "press release", one of them was for English speaking customers, some thousand people must have already called over there - did they say anything at all ?!
I would probably pop only the relevant Qs at hand:
- "Will MtGox reimburse anything ?"
- "Will I get back a fraction of the fiat/BTC I had on my account at the time you wiped the site off the internet ?"
- "Was Karpeles buying some ~6k coins on Stamp earlier today so he could free his family from wrongdoers ?"
- "Are you (the telephone operator) gay ?"
- "Does God exist?"
... and some others I can swiftly think of ... 

Here a link to a Gox call center conversation: http://www.youtube.com/watch?v=6HJt-MpoTP4

sounds like karpeleses nurse moonlighting

[frito]

In order to increase repayments to our creditors, it is necessary to explore the possibility of having MtGox Co., Ltd. continue its business. This is why the civil rehabilitation procedure has been chosen, Rebuilding MtGox Co., Ltd under the supervision of the court in a legally organized procedure while giving proper explanations will not be for the sole benefit of the company but for that of the whole bitcoin community.
All efforts will now be made to restore the business and recover damages to repay debts to creditors. We hope for the understanding and cooperation of all.

I wanna be a shareholder and change the firm name to fritoX

[fryarminer]

I feel so sorry for those phone operators. This could officially make all of Japan hate bitcoin forever haha!

[murraypaul]

At the start of February 2014, illegal access through the abuse of a bug in the bitcoin system resulted in an increase in incomplete bitcoin transfer transactions and we discovered that there was a possibility that bitcoins had been illicitly moved through the abuse of this bug.
As a result of our internal investigation, we found that a large amount of bitcoins had disappeared. Although the complete extent is not yet known, we found that approximately 750,000 bitcoins deposited by users and approximately 100,000 bitcoins belonging to us had disappeared.
We believe that there is a high probability that these bitcoins were stolen as a result of an abuse of this bug and we have asked an expert to look at the possibility of a criminal complaint and undertake proper procedures.

So the hack took place between 1 Feb 2014 and 6 Feb 2014 (6 Feb is I believe when btc withdrawals were halted at Gox). During less than a week 850,000 were stolen.

If you read carefully, that isn't what it says.
It says:
a) At the start of February, there was an increase in incomplete transfers, which caused them to investigate
b) When they investigated, they found that 850,000 coins were missing
They don't say that the 850,000 coins were transferred in February, just that that was when they first noticed that coins were being transferred. The transfers could have been happening for months or years before that without them noticing.

[Money Raccoon]

So, for less than 30 million usd technically a new owner could step in and restore all mtgox balances and continue business as normal?  (i say normal, obviously would have a lot of trust to regain)   

Surely in the long term some smart investors would be all over that???

You're forgetting about the cost of replacing the "lost" 800btc. No one is buying MtGox unless they're recovered.

[alan929]

On the same day (24th), we found out large discrepancies between the amount of cash held in financial institutions and the amount deposited from our users. The amounts are still under investigation and may vary but they approximate JPY 2.8 billion.
We are investigating the causes of these problems. Since there are probably a variety of causes including hacking by third parties, we need to investigate a huge amount of transaction reports in order to establish the truth. As of this date, we cannot confirm the exact amount of missing deposit funds and the total amount of bitcoins which disappeared.
Once we discovered that bitcoins had disappeared and the discrepancies between cash funds and deposit balances, we judged that it would be difficult to continue our activities normally and we therefore closed our site at noon on the 25th (Japan time).



OK. So as a financial guy.....Here is my question.  It's one thing to get hacked and lose 100s of thousands of BTC.
How is the CASH on the 24th missing?  Shouldn't this have been audited on a daily basis, a weekly basis perhaps, but certainly on a monthly basis.  To say OOP...we lost 2.8 JPY is the most troubling thing here for me.

[bitserve]

If you read carefully, that isn't what it says.
It says:
a) At the start of February, there was an increase in incomplete transfers, which caused them to investigate
b) When they investigated, they found that 850,000 coins were missing
They don't say that the 850,000 coins were transferred in February, just that that was when the first noticed that coins were being transferred. The transfers could have been happening for months or years before that without them noticing.

If you choose to believe what MtGox says as truth, you can also consider true their claims that they were "AT ALL TIMES" accounting for BTC and FIAT balances.

 Hmmmm, no, you CAN'T consider them both to be true, its logically IMPOSSIBLE.

Anyway... We are still waiting for them to report at which exact time the balace discrepancy started. That's very easy to prove forensically matching internal accounting data with blockchain ledger.

[toknormal]

I don't believe it's possible not to notice 850,000 missing bitcoins for months or years.

Even if Gox didn't notice it, traders making withdrawals would have. That's who really are the eyes and ears of Gox and thats where the red flags would have started. The fact that they didn't makes me sceptical that 850,000 coins have actually gone "missing".

To withdraw funds there needs to be a blockchain transaction. So if there was a steady flow of withdrawals out of Gox up until the point they suspended withdrawals, they would have been coming from cold wallets with positive balances.

[murraypaul]

If you read carefully, that isn't what it says.
It says:
a) At the start of February, there was an increase in incomplete transfers, which caused them to investigate
b) When they investigated, they found that 850,000 coins were missing
They don't say that the 850,000 coins were transferred in February, just that that was when the first noticed that coins were being transferred. The transfers could have been happening for months or years before that without them noticing.

If you choose to believe what MtGox says as truth, you can also consider true their claims that they were "AT ALL TIMES" accounting for BTC and FIAT balances.

 Hmmmm, no, you CAN'T consider them both to be true, its logically IMPOSSIBLE.

Anyway... We are still waiting for them to report at which exact time the balace discrepancy started. That's very easy to prove forensically matching internal accounting data with blockchain ledger.

I said nothing at all about whether I believed their statement, I just explained what their statement actually said.

[murraypaul]

I don't believe it's possible not to notice 850,000 missing bitcoins for months or years.

Even if Gox didn't notice it, traders making withdrawals would have. That's who really are the eyes and ears of Gox and thats where the red flags would have started. The fact that they didn't makes me sceptical that 850,000 coins have actually gone "missing".

To withdraw funds there needs to be a blockchain transaction. So if there was a steady flow of withdrawals out of Gox up until the point they suspended withdrawals, they would have been coming from cold wallets with positive balances.

It would only have been a problem if there had been a net flow of BTC out of MtGox which exceeded the number of BTC they actually had left.
It seems perfectly plausible that most of their users fell into one of two camps:
a) Transferring BTC in, selling and withdrawing USD
b) Buying and selling BTC entirely on the exchange itself, which is just internal bookkeeping by MtGox, and never touches the blockchain.

As long as more BTC was being sent to MtGox to be sold than was being withdrawn to external wallets, they would never notice that they didn't actually have the huge pile of BTC that they thought they had.
(Alternatively, As long as more BTC was being sent to MtGox to be sold than was being withdrawn to external wallets, noone would ever find out that they didn't actually have the huge pile of BTC that they claimed they had.)

[freebit13]

At first I was thinking "how could all that cash go missing, how could they hack the bank accounts?" and then I realized they might not only have had a "bug" in their withdrawal code, but maybe also with their fiat deposit code. It occurred to me that it's possible someone was somehow making fake fiat deposits at gox, changing them into btc and withdrawing them. That possibility alone could account for "money missing from the bank" and "missing bitcoins". Perhaps the withdrawals were legit, but the deposits weren't... just a thought.

[Pangia]

So let me get this right, they lost $30 million that's MILLION, USD in their actual bank accounts, BESIDES the loss of BTCs. I don't even...

Or does this mean they were running fractional reserve and are now trying to cover it up as "discovered discrepancies on the 24th Feb". That'd be my guess.

I wrote this back in July 2013 in regards to a poster (OP) claiming that MTGOX must be solvent since they are permitting BTC transfers out. I received some nasty PM's as a result.

OP stated: If MTGOX supposedly is having liquidity probs --- Why the fuk are they still allowing bitcoin withdrawals? It doesn't matter whether u withdraw bitcoin or USD, if u do either the money is gone from their account. So I call BS on all this speculation they don't have any money left to run their shit.
--------------------------------------------------------------------------------------------------------------------------------------------------------------------

If you do either, the money ISN'T gone from their account. If you transfer a BTC out, then yes, the BTC is no longer on the MTGOX exchange. But, if you sell a BTC and then have funds in your account (or so it says on your MTGOX page) those "funds" aren't leaving MTGOX's account. Prove to yourself that those funds actually exist.

The notion that a lack of liquidity would prevent MTGOX from permitting BTC withdrawals is flawed.  The purchase of BTC's on MTGOX right now is being performed based on funds that are simply listed on your account. It's almost like a demo account with fake money, but the BTC's are real. If you can't get your funds out, how do you know that it actually exists?

Say MTGOX only has 2 customers (A and B). Customer A has 100 BTC's and B has enough USD in their MTGOX account to purchase all of those BTC's. Customer B with USD in GOX can't withdraw, so B buys all of Customer A 's BTC and transfers them to another exchange where B can sell those BTC's and make a withdrawal without an issue.

Customer A now has USD in their GOX account, however it's USD that they can't withdraw and there are no other customers to purchase BTC's from, so A is stuck with his/her USD in GOX and no way to get it out --- No one to buy BTC's from and no way to get the USD out because MTGOX isn't processing the withdrawal.  Now the million dollar question is this: DO THE FUNDS NOW IN CUSTOMER A's ACCOUNT ACTUALLY EXIST? It say's that they have it on their MTGOX account, but does it really exist?

It's not like MTGOX has an independent 3rd party that can audit them to say that they indeed have everyone's funds and are solvent. All we are left with is an account page that says that you have $xxxxxx.00 

You can purchase BTC's with those funds listed there, because for the moment, everyone believes that those funds are real. But can you all withdraw your funds right now?

What's working in the MTGOX's favor right now is the fact that they obviously don't have just 2 customers. Additionally, customers are depositing funds.  What's saving them from a collapse is that the simplified scenario above is being prevented by the thousands of MTGOX customers who aren't heading for the door at once. BUT, if something were to trigger a panic, we'd see the price of BTC's on MTGOX shoot up and those willing to take a lose by purchasing BTC's at panic prices will be able to get their funds out through the transfer of BTC's and those left holding USD will be out of luck. Those left holding USD will have their USD delineated on their MTGOX page, but are those funds really there? Since there wouldn't be anyone to "buy" BTC's from (because they left with the BTC's that you sold them), you could put in a request to withdraw those funds, but when that request doesn't get fulfilled (like the stories that we keep reading on this forum), is your money really in your account?

You can "buy" BTC's with the funds listed on your MTGOX account because everyone believes that those funds really exist and accept them (electronically), even if they can't withdraw those funds.  You can then transfer those BTC's out and it has nothing to do with the liquidity of MTGOX. The acquisition of BTC's and the transfer of BTC's is solely based on the belief that the funds listed on your MTGOX account are real.

If you can prove that those funds in your account actually exist, then your belief that MTGOX is solvent is founded.

However, the fact that BTC's can be transferred out of MTGOX does not prove that MTGOX is solvent.

[QuestionAuthority]

Why is everyone focusing on the amount of money Gox lost? That's inconsequential compared to the irreparable damage done to Bitcoins reputation. Every one I know is telling me how sorry they are for me and reminding me that they warned me that whole Bitcoin thing was a scam. I tell them that I didn't lose any money and they respond, "Well, you got lucky this time. Better stay away from nonsense like that from now on".

[grifferz]

I'm looking at bitcoin at $610 and a bunch of new bitcoin-related services announced since mtgox suspended withdrawals, and finding it hard to see there has been any irreparable damage.

[BitChick]

Why is everyone focusing on the amount of money Gox lost? That's inconsequential compared to the irreparable damage done to Bitcoins reputation. Every one I know is telling me how sorry they are for me and reminding me that they warned me that whole Bitcoin thing was a scam. I tell them that I didn't lose any money and they respond, "Well, you got lucky this time. Better stay away from nonsense like that from now on".

Some damage has been done but "irreparable" is probably an overstatement.  My parents thought we lost everything too.  BitchicksHusband tried to explain to my dad how he would never leave his coins in someone's wallet for any length of time and how we only used Mt.Gox for some trades and have not used them lately.  It was confusing to my dad.  The whole thing is confusing to many people that do not really understand how Bitcoin works.

But I am just waiting for BTC to reach a new ATH in which the news will then say, "Bitcoin's BACK!" or something like that and that will renew confidence and even spark some interest from those that thought Bitcoin had suffered from a fatal blow.  

[Gabi]

I wonder if they lost the 750.000 bitcoins instantly or over years.

That's inconsequential compared to the irreparable damage done to Bitcoins reputation

C'mon don't be silly, things like this happened tons of times since 2011, this is not the first time.

[HorseCoin]

so a gathering of Magicians happened, and the Magicians performed tricks to obtain teh BTC

[seriouscoin]

so a gathering of Magicians happened, and the Magicians performed tricks to obtain teh BTC

Stop buying clearance at Jokes R Us you cheap fck.

[QuestionAuthority]

Why is everyone focusing on the amount of money Gox lost? That's inconsequential compared to the irreparable damage done to Bitcoins reputation. Every one I know is telling me how sorry they are for me and reminding me that they warned me that whole Bitcoin thing was a scam. I tell them that I didn't lose any money and they respond, "Well, you got lucky this time. Better stay away from nonsense like that from now on".

Some damage has been done but "irreparable" is probably an overstatement.  My parents thought we lost everything too. BitchicksHusband tried to explain to my dad how he would never leave his coins in someone's wallet for any length of time and how we only used Mt.Gox for some trades and have not used them lately.  It was confusing to my dad.  The whole thing is confusing to many people that do not really understand how Bitcoin works.

But I am just waiting for BTC to reach a new ATH in which the news will then say, "Bitcoin's BACK!" or something like that and that will renew confidence and even spark some interest from those that thought Bitcoin had suffered from a fatal blow.  

Therein lies the problem. Bitcoin is, at best, confusing to most people and now they have a good reason to avoid it like the plague. The rumors I hear the most from people is that they knew the hype over the Bitcoin price was fake. Nothing is worth that much that fast. It would never be worth that much if someone like that Gox exchange on the news wasn't fixing the price.

Everyone is going to have a serious uphill battle that didn't exist before Karpeles started the "Bitcoin Bug" lie to cover his ass. People that I had on the verge of convinced to use Bitcoin are now avidly against it. One business operator that I convinced to try it is now against it claiming that the news of Bitinstant and Gox is, "too much for me".  

[freebit13]

Therein lies the problem. Bitcoin is, at best, confusing to most people and now they have a good reason to avoid it like the plague. The rumors I hear from most from people is that they knew the hype over the Bitcoin price was fake. Nothing is worth that much that fast. It would never be worth that much if someone like that Gox exchange on the news wasn't fixing the price.

Everyone is going to have a serious uphill battle that didn't exist before Karpeles started the "Bitcoin Bug" lie to cover his ass. People that I had on the verge of convinced to use Bitcoin are now avidly against it. One business operator that I convinced to try it is now against it claiming that the news of Bitinstant and Gox is, "too much for me".  

^^^ Totally agree, and contradictory statements like this are not going to help things at all:

At the start of February 2014, illegal access through the abuse of a bug in the bitcoin system resulted in an increase in incomplete bitcoin transfer transactions and we discovered that there was a possibility that bitcoins had been illicitly moved through the abuse of this bug.

In order to increase repayments to our creditors, it is necessary to explore the possibility of having MtGox Co., Ltd. continue its business. This is why the civil rehabilitation procedure has been chosen, Rebuilding MtGox Co., Ltd under the supervision of the court in a legally organized procedure while giving proper explanations will not be for the sole benefit of the company but for that of the whole bitcoin community.
All efforts will now be made to restore the business and recover damages to repay debts to creditors. We hope for the understanding and cooperation of all.

How can continually blaming things on a bug in the bitcoin software help the whole community?

[Artlover]

Given he apparently left France in a hurry, moving to Japan practically over night after his employers accused him of computer fraud, I think there is valid reason to suspect that it's more than incompetence, and that illegal activity on his part here is likely.

That's interesting. Do you have any reference for this, even if it's just a reference to a rumour?

http://www.reddit.com/r/Bitcoin/comments/1z91p8/interview_with_anne_karpeles_french/

http://www.lejsl.com/saone-et-loire/2014/03/01/un-qi-superieur-a-la-moyenne

http://www.reddit.com/r/Bitcoin/comments/1z92dk/karpeles_accused_of_computer_fraud_before_moving/

http://blog.magicaltux.net/2006/01/16/histoire-d-une-garde-a-vue-pas-comme-les-autres/

[Artlover]

I stubbed my big toe the other day -- I looked down to see what it was and low and behold, transaction malleability. It's everywhere!

Everyone is ragging on the poor guy but won't give him a chance to prove himself.  He's been handling MTGOX for years now with no problems and now because he has a small issue everybody wants to crucify him.  He looked really heartbroken at the press conference and I belive him when he says he is trying to sort it all out.  I believe the bug in the system is true cause for this and that the powers that be behind the Bitcoin program are not helping any.  Give Mark a break!

Are you trying to be funny? 

[windpath]

"We will make all efforts to ensure that crimes are punished and damages recovered."

I sure hope so.....

[leopard2]

I wonder if they lost the 750.000 bitcoins instantly or over years.

I don't know which one is worse. To lose 750000 coins in a few weeks? How the fuck can that happen?

Or never, ever doing any accounting at all over years?

NO FUCKING BOOKKEEPING; EVER? Everybody says their accounting is bad but hey, I disagree, they did not have any accounting at all. Or he's the grandmaster of all liars, even for Jewish businessmen that is extraordinary abuse of the truth.

Fatso needs to spend time in a Japanese jail until he coughs up the truth. Where are the cold wallets? Did you ever do any balance sheet since the company was founded, and was there an imbalance then?

This company is like a bizarre comic strip on crack. 

[dyask]

I wonder if they lost the 750.000 bitcoins instantly or over years.

I don't know which one is worse. To lose 750000 coins in a few weeks? How the fuck can that happen?

Or never, ever doing any accounting at all over years?

NO FUCKING BOOKKEEPING; EVER? Everybody says their accounting is bad but hey, I disagree, they did not have any accounting at all. Or he's the grandmaster of all liars, even for Jewish businessmen that is extraordinary abuse of the truth.

Fatso needs to spend time in a Japanese jail until he coughs up the truth. Where are the cold wallets? Did you ever do any balance sheet since the company was founded, and was there an imbalance then?

This company is like a bizarre comic strip on crack. 

One has to wonder how many coins made it into his personal wallets.  Transaction malleability strikes again!   

[itsunderstood]

How can continually blaming things on a bug in the bitcoin software?

This page is fun:

https://en.bitcoin.it/wiki/Lazy_API

Problem

Lazy web designer wants to use bitcoins without dealing with installing bitcoin on a server, installing a shopping cart interface, or using ugly merchant services with callbacks.

Solution for sending bitcoins

Use the MtGox API which allows you to use the offchain payment network.

Solution for receiving bitcoins

---Input a list of bitcoin receiving addresses to your database
---Give a bitcoin address to a potential customer
---Have the customer tell you when they have sent the coins and have at least 1 confirmation (you can choose a number higher than 1 if you are worried about double-spending)
---Check blockexplorer to see if they sent the right amount (i.e. http://blockexplorer.com/q/getreceivedbyaddress/19hMEAaRMbEhfSkeU4GT8mgSuyR4t4M6TH/1) - the /1 is the number of confirmations you require
---Give them what they paid for
---After a reasonable amount of time has passed, you can re-use the address for another customer

Risks

External Service

BlockExplorer is a service that is provided by a private party. There is no guarantee that the information provided by BlockExplorer matches the blockchain.

There have not been any reports that BlockExplorer has reported transaction data incorrectly.

Double Spending

A merchant is exposed to a double-spending attack when recognizing a payment before it has been confirmed with a sufficient number of blocks.

For an attacker to be successful with this double spend tactic a significant effort is required and thus the risk of this attack being made against the typical retail merchant is pretty minimal. It would not be advisable for a merchant with little to no recourse against an attacker to accept payment without a sufficient number of confirmations however.
See Also

Well, lawyers take note: good process and bad process can be found everywhere.

I like how the only entry under "risk" is blockexplorer, haha, not any one person.

[Trading]

I don't have evidence, but some conclusions seem clear:

1) He is lying about the date when the facts happened. It's absurd to believe that so many coins were stolen and also money and he only realized that at the same time. Of course, the withdrawal delays were caused by lack of funds. Probably, the bitcoins were stolen months ago and they tried to cover it up to keep business as usual hoping to pay with fees. The rise of the price of bitcoin was a nightmare to him, making more hard to pay the loss. At some point, he understood he was completely screwed, but probably decided to let things go on, hoping for a miracle. I bet his life hasn't been easy. He told he gained all that weight because of stress. I can believe him.
2) He is lying because if he confessed he knew the bitcoins were stolen many months ago, he would be facing criminal charges. He directed a business on fractional reserve, lying to new customers on the real financial situation. Gox has been bankrupted for long, but he kept accepting new deposits. That breaks many corporate rules.
3) I suspect he is hiding a million or so for the raining days to come, but I don't think this was an inside job. He just lost thousands of bitcoins because of an hack and lied to everyone on that. The lack of fiat was probably caused by the buying of bitcoins on market to keep the bitcoins withdrawals up. He knew the day he stopped bitcoins withdrawals would be the end.

[Bit_Happy]

Given he apparently left France in a hurry, moving to Japan practically over night after his employers accused him of computer fraud, I think there is valid reason to suspect that it's more than incompetence, and that illegal activity on his part here is likely.

That's interesting. Do you have any reference for this, even if it's just a reference to a rumour?

Ah, I've seen http://gawker.com/does-mt-goxs-ceo-have-a-secret-history-of-online-payme-1534752110 now - is that the one?

Fuck Gawker comments..

wow
Mark?


    Indeed, during my misspent youth, I made a huge, huge mistake. Enough silliness that I found myself locked into custody and brought temporarily placed in the "mousetrap" (souricière: possibly "n.f. (pol.): 'Baited trap' laid by the forces of law-and-order."). This was followed by an investigation of more than a year, which eventually ended in a trial.

    I will not give too much detail about what I did wrong, just say it concerns payment systems on the Internet. I spent two years taking risks becoming larger, perhaps because it was an exciting side … whatever, I ended up getting arrested (in rather bizarre circumstances, noting that when I was arrested, I was just in a police station to file a complaint for something else). Anyway, I was released four days later and placed under "judicial review". Basically I did not have the right to leave France and I had to go regularly to the courthouse to speak to someone who was going to see if I lived in "the right way".

    ...

    In the end, the trial was not concluded too bad for me (3 months suspended sentence disappearing after 5 years, and nothing in the criminal record).

A Google translate for the blog post returns the same story, albeit in less smooth English.

[YipYip]

I stubbed my big toe the other day -- I looked down to see what it was and low and behold, transaction malleability. It's everywhere!

Everyone is ragging on the poor guy but won't give him a chance to prove himself.  He's been handling MTGOX for years now with no problems and now because he has a small issue everybody wants to crucify him.  He looked really heartbroken at the press conference and I belive him when he says he is trying to sort it all out.  I believe the bug in the system is true cause for this and that the powers that be behind the Bitcoin program are not helping any.  Give Mark a break!

STFU  noob

[row5_seat47]

some gox info Re: CoinLab  buried in here
https://bitcointalk.org/index.php?topic=498972.0

[Phinnaeus Gage]

Given he apparently left France in a hurry, moving to Japan practically over night after his employers accused him of computer fraud, I think there is valid reason to suspect that it's more than incompetence, and that illegal activity on his part here is likely.

Don't make me dig through all my posts to dig up what I said about this very same thing about two years ago. Taxing my memory, I believe I took a lot of heat due to it because at the time Mt Gox was still Bitcoin's favorite son.

Unfortunately, I'll held onto another piece of the puzzle for just as long and same reason that I wish there was somebody else I could trust to release it instead of me.

[casinocoin]

Given he apparently left France in a hurry, moving to Japan practically over night after his employers accused him of computer fraud, I think there is valid reason to suspect that it's more than incompetence, and that illegal activity on his part here is likely.

Don't make me dig through all my posts to dig up what I said about this very same thing about two years ago. Taxing my memory, I believe I took a lot of heat due to it because at the time Mt Gox was still Bitcoin's favorite son.

Unfortunately, I'll held onto another piece of the puzzle for just as long and same reason that I wish there was somebody else I could trust to release it instead of me.

You may be praised now if you can dig up the posts tried looking through, but too many pages

[analytics]

Has Bitstamp chimed in yet if it was Mark or Jeb who did the y 10K coin sell last week?

Bitstamp and BTC-E I hope are working with audit experts to ferret out where the coins are.

[alfabitcoin]

Why would mtgox held 100k btc of theirown on the server? That prooves how they never had cold storage or offline paper wallet.
Mark is a lier and fraudster. He wont get away, some people wont let this go away.

[V4Vendettas]

I just hope one day we all get to know what actually happened.

For me this was a massive loss and I wont lie it has caused many sleepless nights. Every night I just cant stop my mind from trying to workout how I can get back to where I was.

I suppose that's a good thing in a way. Its better than going over and over what might have happened at Mt.Gox.

So many just say "just move on"   "lolz you lost your coins"   "I'm glad". Screw them its just not possible for for some of us to just give up our life savings without a fight.

I do however recognise its also important to not stop living and moving forward in some kind of positive way.

Way I see it every day I spent doing nothing positive over the last 2 weeks was a day everyone else got a little more ahead of me in the bitcoin game.

For me at least its time to drag myself back up and start bouncing back from almost nothing.

FU Mark/Hackers/FBI/who ever and thanks for the lesson.

[jojo69]

I just hope one day we all get to know what actually happened.

For me this was a massive loss and I wont lie it has caused many sleepless nights. Every night I just cant stop my mind from trying to workout how I can get back to where I was.

I suppose that's a good thing in a way. Its better than going over and over what might have happened at Mt.Gox.

So many just say "just move on"   "lolz you lost your coins"   "I'm glad". Screw them its just not possible for for some of us to just give up our life savings without a fight.

I do however recognise its also important to not stop living and moving forward in some kind of positive way.

Way I see it every day I spent doing nothing positive over the last 2 weeks was a day everyone else got a little more ahead of me in the bitcoin game.

For me at least its time to drag myself back up and start bouncing back from almost nothing.

FU Mark/Hackers/FBI/who ever and thanks for the lesson.

It is important that you recognize your part in this; YOU chose to leave your life savings in the cloud.

[OhShei8e]

I just hope one day we all get to know what actually happened.

For me this was a massive loss and I wont lie it has caused many sleepless nights. Every night I just cant stop my mind from trying to workout how I can get back to where I was.

I suppose that's a good thing in a way. Its better than going over and over what might have happened at Mt.Gox.

So many just say "just move on"   "lolz you lost your coins"   "I'm glad". Screw them its just not possible for for some of us to just give up our life savings without a fight.

I do however recognise its also important to not stop living and moving forward in some kind of positive way.

Way I see it every day I spent doing nothing positive over the last 2 weeks was a day everyone else got a little more ahead of me in the bitcoin game.

For me at least its time to drag myself back up and start bouncing back from almost nothing.

FU Mark/Hackers/FBI/who ever and thanks for the lesson.

Very sad. 

But you are not alone:

https://bitcointalk.org/index.php?topic=498851.0

I can very well empathize with what you're going through now.

I was totally done and still I am.

We thought that we know Mark because he's a nerd. Not one of these pretty and easy boys but a 'good' boy like Jed and others. Mt. Gox was always guided by nerds and it was somehow always there. No matter what happened Gox has survived.

Gox had hardware 2FA and a sensible API when others were still in their infancy.

And now? Gox seems to be the lie of the decade. We have lied to ourselves. We never should have allowed a single man to entrust all coins. This was our biggest mistake.

Nevertheless: Cheer up! Be good to yourself!

If possible we will find a solution.

I will go on vacation soon. After my vacation, you can find me with others on the list. Don't give up!

[V4Vendettas]

I just hope one day we all get to know what actually happened.

For me this was a massive loss and I wont lie it has caused many sleepless nights. Every night I just cant stop my mind from trying to workout how I can get back to where I was.

I suppose that's a good thing in a way. Its better than going over and over what might have happened at Mt.Gox.

So many just say "just move on"   "lolz you lost your coins"   "I'm glad". Screw them its just not possible for for some of us to just give up our life savings without a fight.

I do however recognise its also important to not stop living and moving forward in some kind of positive way.

Way I see it every day I spent doing nothing positive over the last 2 weeks was a day everyone else got a little more ahead of me in the bitcoin game.

For me at least its time to drag myself back up and start bouncing back from almost nothing.

FU Mark/Hackers/FBI/who ever and thanks for the lesson.

It is important that you recognize your part in this; YOU chose to leave your life savings in the cloud.

Not for one second have I ever refuted the part I played in my loss.


@OhShei8e   big hugs bro

[sobriket]

Given he apparently left France in a hurry, moving to Japan practically over night after his employers accused him of computer fraud, I think there is valid reason to suspect that it's more than incompetence, and that illegal activity on his part here is likely.

Don't make me dig through all my posts to dig up what I said about this very same thing about two years ago. Taxing my memory, I believe I took a lot of heat due to it because at the time Mt Gox was still Bitcoin's favorite son.

Unfortunately, I'll held onto another piece of the puzzle for just as long and same reason that I wish there was somebody else I could trust to release it instead of me.

So why wouldn't you release this "other piece of the puzzle"?

[jojo69]

Not for one second have I ever refuted the part I played in my loss.

That is good, that is the only way the lesson is learned.  Please don't get me wrong, I have coins in many places to spread risk (even cold storage has risks) and I lost some on Gox, and some on BFL before that, and some on Bitcoinica before that...it stings for sure, I do feel your pain.

[btc237ftw]

So... I spoke with their English representative.

I asked if there is anything I need to do to get a Creditor status or do I get it automatically. He said there's nothing I can or need to do, except checking the website for updates. He said they are waiting for the court to release its' decision about how to move forward from here.

I asked if he has an ETA for when that will be released, he said no.

I asked if there is anything I can or need to do at this time and he said no. He said "all I can recommend you to do is check the website from time to time as we will add updates there."

[V4Vendettas]

So... I spoke with their English representative.

I asked if there is anything I need to do to get a Creditor status or do I get it automatically. He said there's nothing I can or need to do, except checking the website for updates. He said they are waiting for the court to release its' decision about how to move forward from here.

I asked if he has an ETA for when that will be released, he said no.

I asked if there is anything I can or need to do at this time and he said no. He said "all I can recommend you to do is check the website from time to time as we will add updates there."

Thank you for saving me a long distance call. I would send a btc tip but well gox.

[mp420]

What baffles me more than the loss of BTC is the loss of fiat.

They claim that they have $30 million less than they thought they had, and that they don't know where the money went. This is insane. Just look at the bank statements and add them up. There you see where the money went. Simple as that.

[phazon307]

What do you expect from a bunch of dorks that use to run a Magic the Gathering online trading site rofl lmao magic the gathering so dorky.

[grifferz]

What do you expect from a bunch of dorks that use to run a Magic the Gathering online trading site rofl lmao magic the gathering so dorky.

I suspect if you've made a considerable number of posts to a cryptocurrency forum then you are as dorky or more dorky than the typical M:tG player. That after all is at least a social game.

I do think I'm pretty dorky for posting here, and I'm okay with that.

[itsunderstood]

What do you expect from a bunch of dorks that use to run a Magic the Gathering online trading site rofl lmao magic the gathering so dorky.

I suspect if you've made a considerable number of posts to a cryptocurrency forum then you are as dorky or more dorky than the typical M:tG player. That after all is at least a social game.

I do think I'm pretty dorky for posting here, and I'm okay with that.

nice

[freebit13]

What baffles me more than the loss of BTC is the loss of fiat.

They claim that they have $30 million less than they thought they had, and that they don't know where the money went. This is insane. Just look at the bank statements and add them up. There you see where the money went. Simple as that.

I've postulated that perhaps their fiat deposit script was compromised... that would mean that the money was never there in the first place, so wouldn't show up on the statements as going out and wouldn't be that easy to see. They would need to compare the bank accounts with the gox database to see if all the incoming deposits on the site were actually coming in to the bank and then trace that back to where those fake deposits were coming from and where the bitcoin bought with them went to... my 2 centoshis