SaveGox.com

[sturle]

An audit will trivially reveal if the trade data matches the balances caused by deposits and withdrawals.

An audit done by whom?  By Mark? Gonzague? Roger Ver?

Why are you trying to make this more difficult than it is by playing stupid?  They have just as much interest as us in finding the lost funds.  Which means they will put capable people on the task of figuring out exactly what happened to out funds.  There will probably be a criminal investigation as well.

[JorgeStolfi]

They have just as much interest as us in finding the lost funds.  Which means they will put capable people on the task of figuring out exactly what happened to out funds.  There will probably be a criminal investigation as well.

What makes you think that they really want to find the lost funds? Just because they said so?

[edmundedgar]

There main difference between this case and Madoff, is that the trades actually happened, and people were making their own trading decisions.

I don't know what the court will say, but they could say that the people were trading non-existent coins, so the balances are meaningless.

Actual deposits and withdrawals are numbers that the court can verify with the banks and in the blockchain.  The trades inside MtGOX are recorded only in Mark's database, and any information that comes from him must be treated as a mere hint that needs independent evidence to be trusted.  The database may have been doctored to give large bogus balances to some clients.

Nope, trades were published in real time, and more or less complete records can be retrieved from many locations.  The only unknown is which accounts the trades belonged to.  Faking account balances afterwards by switching which account did the trade will require a lot of work to make everything match up, and even more to seem credible.  Not sure if it will be possible at all if everyone will be allowed to verify their own data.  People have already been able to verify their balances for a while, and I haven't heard of an complaints.  An audit will trivially reveal if the trade data matches the balances caused by deposits and withdrawals.

That sounds like a good way to reach a binary decision about out whether the database is correct or incorrect; You could look at the feed, the account history, the blockchain and the account balance and see if everything matches. If it does, problem solved.

But what if it doesn't? If any data is missing or unreliable, eg the database has been hacked at unknown times, the bitcoins have been sent to unknown addresses and not properly logged, the code sometimes put the wrong information in the database or the feed, customer support made transactions that didn't show up in the feed, etc etc, it may not be possible to work out _what_ about the database is incorrect. Once you have any condition where money fails to get logged or money gets logged but fails to get spent as described, it becomes very hard to work out what may have fallen through which hole. It takes reasonably competent design to create good audit logs, and we're talking about an operation that didn't even use source control, so not only was their design probably incompetent and possibly deliberately incompetent, it won't even be possible to track which mistakes the system was making at what times.

[JorgeStolfi]

trades were published in real time, and more or less complete records can be retrieved from many locations.

Is that true?  I know some places where one can download chart data -- OHLC price and total volume, in 1-minute intervals.  Do you know any place that saved the individual trades?

The only unknown is which accounts the trades belonged to.  Faking account balances afterwards by switching which account did the trade will require a lot of work to make everything match up, and even more to seem credible.

Obviously this proposal is not much concerned with credibility.    Seriously, if clients do not find the result of the Sunlot investigation convincing, what can they do? They will have only 16.5% equity at best, so they cannot prevail on management by vote.

People can fake Rembrandts and Hitler diaries well enough to fool many experts.  With a computer, one could do amazingly complicated doctoring of the database.  The stakes are much higher than the price of a Rembrandt.

Not sure if it will be possible at all if everyone will be allowed to verify their own data.  People have already been able to verify their balances for a while, and I haven't heard of an complaints.  An audit will trivially reveal if the trade data matches the balances caused by deposits and withdrawals.

The doctoring need not alter other people's balances, only inflate those of certain "friends".   As you pointed out yourself recently, there are many accounts with substantial BTC and/or money balances that have not had any activity for years.  I cannot imagine who would "forget" hundreds of thousands of euros, unless the owner died or that money was "dirty" in some way.  Some of those accounts could have been used to doctor the database -- e.g. by switching the balances of a dead account and that of a friend.

Money deposits and withdrawals can only be verified by obtaining MtGOX's bank accounts, many of them closed long ago.  Bitcoin deposits and withdrawals cannot be verified independentlry without knowing the addresses used by MtGOX.  It is not obvious that the new management will have access to those records -- all of them -- and they have no obbligation to release them -- all f them -- to the clients.  

Moving the discussion to a higher level:  the proposal implies that the clients will put their 800'000 BTC (the 200'000 that are there and the 600'000 that disappeared) and a lot of cash under control of certain people.  It is extremely naive to trust that those people will do what they say they will do, without making sure that they will go to jail if they don't do it.  This requires reading the proposal very carefully, keeping in mind that they may be dishonest (perhaps even the thieves themselves) and very smart.  Namely, if there is a loophole that will let them take some or all of that money without going to jail, you must assume that they will use it.  

[edmundedgar]

Moving the discussion to a higher level:  the proposal implies that the clients will put their 800'000 BTC (the 200'000 that are there and the 600'000 that disappeared) and a lot of cash under control of certain people.  It is extremely naive to trust that those people will do what they say they will do, without making sure that they will go to jail if they don't do it.  This requires reading the proposal very carefully, keeping in mind that they may be dishonest (perhaps even the thieves themselves) and very smart.  Namely, if there is a loophole that will let them take some or all of that money without going to jail, you must assume that they will use it.  

Right, especially when the people the creditors are supposed to trust are on record making clearly bogus and/or deliberately misleading claims, like saying Japanese bankruptcies take 10 years or implying that the trustee will somehow spend over a hundred million dollars administering the liquidation.

[KingOfSports]

Like anyone in bitcoin REALLY is willing to spend money on SAVING or CARING for someone / something else...NOT. Should have been red flag #1, everyone here is for themself, a scammer, or someone with a heart who eventually gets scammed and falls into category number 1.

[sturle]

They have just as much interest as us in finding the lost funds.  Which means they will put capable people on the task of figuring out exactly what happened to out funds.  There will probably be a criminal investigation as well.

What makes you think that they really want to find the lost funds? Just because they said so?

Ah, you are playing idiot again.  No, saying so makes no difference.

There are several parts to this: 1. Find out how the funds leaked out.  2. Find out to where.  3. Find out who received the funds.

1 and 2 should be possible though a thorough audit.  3 may be possible to the extent of finding accounts which received double payments, reversed bank transfers, etc.  Finding the people may be more difficult.  At least those people are unlikely to make any claims.

[sturle]

The doctoring need not alter other people's balances, only inflate those of certain "friends".

Have you done any accounting in your life?  Obviously not.  You cannot inflate the balances of anyone without lowering other balances.  And you will have to do this by altering trading records.  Bank records and the blockchain are in the hands hands of other people.

As you pointed out yourself recently, there are many accounts with substantial BTC and/or money balances that have not had any activity for years. I cannot imagine who would "forget" hundreds of thousands of euros, unless the owner died or that money was "dirty" in some way.  Some of those accounts could have been used to doctor the database -- e.g. by switching the balances of a dead account and that of a friend.

By changing trading records for years back, and have those match the other records all the way?  Good luck with that.  The fees has to match as well, and match previously leaked databases.  The high valued old accounts are known to be locked accounts, btw.  Bitcoinica, Baron, etc.

Money deposits and withdrawals can only be verified by obtaining MtGOX's bank accounts, many of them closed long ago.  Bitcoin deposits and withdrawals cannot be verified independentlry without knowing the addresses used by MtGOX.  It is not obvious that the new management will have access to those records -- all of them -- and they have no obbligation to release them -- all f them -- to the clients.  

The criminal investigation will have access to all of them, and their findings should match what other investigators find.  Another complicating factor if you want to fake trades.

[JorgeStolfi]

What makes you think that they really want to find the lost funds? Just because they said so?

Ah, you are playing idiot again.  No, saying so makes no difference. There are several parts to this: [ ... ]

Perhaps the problem will be easier to understand if explained in a bigger font:

What makes you think that they really want to find the lost funds?

[JorgeStolfi]

The criminal investigation will have access to all of them, and their findings should match what other investigators find.

That is the point: what criminal investigation?

[edmundedgar]

The criminal investigation will have access to all of them, and their findings should match what other investigators find.  Another complicating factor if you want to fake trades.

Up-thread you were saying they were going to pay out the bitcoins without waiting for the criminal investigation, because their audit would be able to find everything on its own.

[sturle]

What makes you think that they really want to find the lost funds? Just because they said so?

Ah, you are playing idiot again.  No, saying so makes no difference. There are several parts to this: [ ... ]

Perhaps the problem will be easier to understand if explained in a bigger font:
What makes you think that they really want to find the lost funds?

1. They have money invested themselves.  What makes you believe they want to lose their own money?
2. The finder is entitled to 10% of the lost funds.

[sturle]

The criminal investigation will have access to all of them, and their findings should match what other investigators find.  Another complicating factor if you want to fake trades.

Up-thread you were saying they were going to pay out the bitcoins without waiting for the criminal investigation, because their audit would be able to find everything on its own.

If they find everything on their own, and they can be sure of it, why wait for the criminal investigation?  The results should match, however.  If not, and the new owners have been altering the books, they will have a problem.  Likewise, if the previous owner altered the books, and the new owner didn't do their audit well enough.

[Nagle]

I'm more interested in the audit being done by the trustee appointed by the Tokyo District Court. I doubt the Sunlot deal will go anywhere until that happens.

[JorgeStolfi]

1. They have money invested themselves.  What makes you believe they want to lose their own money?
2. The finder is entitled to 10% of the lost funds.

I don't know how my experience with accounting compares with yours, but it seems that I have a bit more imagination. 

[JayJuanGee]

There main difference between this case and Madoff, is that the trades actually happened, and people were making their own trading decisions.

I don't know what the court will say, but they could say that the people were trading non-existent coins, so the balances are meaningless.

Actual deposits and withdrawals are numbers that the court can verify with the banks and in the blockchain.  The trades inside MtGOX are recorded only in Mark's database, and any information that comes from him must be treated as a mere hint that needs independent evidence to be trusted.  The database may have been doctored to give large bogus balances to some clients.

sure some of your speculation may be correct; however, if NO one is contesting their balance, then the rest of your speculation does NOT matter.  If customers agree that they had X amount of BTC and Y amount of Fiat, then what else is there to question?

[JayJuanGee]

An audit will trivially reveal if the trade data matches the balances caused by deposits and withdrawals.

An audit done by whom?  By Mark? Gonzague? Roger Ver?

Why are you trying to make this more difficult than it is by playing stupid?  They have just as much interest as us in finding the lost funds.  Which means they will put capable people on the task of figuring out exactly what happened to out funds.  There will probably be a criminal investigation as well.

Jorge likes to make matters difficult, to spread FUD, to exaggerate the most unlikely scenario, and to distract from meaningful communications.  He's a troll, and we probably entertain him too much, even though every once in a while he may make a good point.

[JayJuanGee]

What makes you think that they really want to find the lost funds? Just because they said so?

Ah, you are playing idiot again.  No, saying so makes no difference. There are several parts to this: [ ... ]

Perhaps the problem will be easier to understand if explained in a bigger font:

What makes you think that they really want to find the lost funds?

You do seem to have a good sense of humor, though... even though you ask trolling questions.... that have obvious answers.  Everyone wants to find the coins, except for the ones that stole them..,. You cannot necessarily assume all (or a majority of) actors have malicious motives, even though some actors may have malicious motives.

[JayJuanGee]

1. They have money invested themselves.  What makes you believe they want to lose their own money?
2. The finder is entitled to 10% of the lost funds.

I don't know how my experience with accounting compares with yours, but it seems that I have a bit more imagination. 

Agreed.  If one cannot think of anything positive to say about you, Jorge, at least, one can say you (and your team) seems to have a pretty good imagination.

[T.Stuart]

I wouldn't say that you need a particularly fertile imagination to suppose that the balances have been out for years, say because Mark or some associates decided to borrow, sell, short or whatever at the wrong time.

Then it would help to simply inflate the balances of those in on the scam. These are Goxcoins we are talking about here, remember; I don't see why inflating some balances would necessarily require deflating others.

One thing is for sure. The people wanting to take over have BTC in their eyes. Being one of those with "funds" in Gox I personally would like to see some kind of rehabilitation. But a 16.5% stake stinks. The sum of balance holders should have at least parity with the new owners - 50%, nothing less.