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Author Topic: New Mt. Gox class action in U.S.  (Read 5667 times)
DrApricot
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June 13, 2014, 04:28:43 AM
 #41

Mt. Gox depositors could provide an ideal test-bed for testing out as many different versions of this mobile bitcoin ap as possible--one that will run on older smart and not-so-smart phones as well as the newer ones.
In Japan, most of the mobile phone service providers, such as DoCoMo, are also payment processors, registered under the Payment Services Act. Mobile payments work just fine in Japan. No need for Bitcoin.
I probably should have been a lot more clear. I was never suggesting a mobile bitcoin app was needed in Japan, but rather in Myanmar and Bangladesh for micropayments. As mentioned in an earlier post, the Ministry of Finance has had an interest in stimulating trade with these two developing countries and believes bitcoin can play an important role. They call it their "Asian Trade Revolution" strategy.

What I was proposing is much more of a tit-for-tat exchange. The Ministry helps the bitcoin community by lending its oversight to the Mt. Gox bankruptcy in order to help prevent delay and fraud, and members of the community assist with Japan's strategy by offering to test a mobile bitcoin app for them--one that will work well in both these two countries for micropayments. It needs to be tried out with a wide variety of devices, because the cell phones available in developing countries are much less homogeneous than you find in developed countries where virtually everyone has a smart phone or tablet.

I'll admit, my idea is kind of half-baked, and it needs further fleshing out, but you have to ask "why would the government of Japan help out Mt. Gox depositors?", and perhaps one answer is because depositors, through their participation in the bitcoin community, are offering to do something in return that the government values.
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June 13, 2014, 05:33:48 AM
 #42

The recovery effort is getting nowhere because nobody competent is pushing forward in the courts in Japan.

I'm not sure that's the problem. I'd say the recovery effort is going nowhere because the situation is beyond recovery. They seem to be something over a billion dollars in the hole. If they'd lost 20% or something they might be able to get back to solvency by getting some large creditors to take voluntary haircuts - this is what Intrade did - but if you've lost 80% there's pretty much no way that's going to work. Every creditor who refuses to get crammed down increases the amount you'd have to cram down the depositors who do agree. Unless they've secretly got a lot more assets left than they're letting on, the situation is impossible.

I don't really understand what Sunlot are trying to do but the best guesses would be:
a) There's some kind of scam involved like fixing the final price on the exchange at about $100 (note that it seems like somebody did actually try to fix the price like this), valuing bitcoins at that, then claiming that's how much you owe the bitcoin holders. You'd think the trustee would see through that, but I suppose once they'd sunk a lot of time and money into it prior to the bankruptcy you couldn't blame them for trying it on and hoping they get lucky.
b) They really expect liquidation to happen, but want a seat at the table to buy some cheap assets when it does.
c) They're getting strung along by their lawyers for fees...
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June 14, 2014, 07:07:31 AM
 #43

The recovery effort is getting nowhere because nobody competent is pushing forward in the courts in Japan.

I'm not sure that's the problem. I'd say the recovery effort is going nowhere because the situation is beyond recovery. They seem to be something over a billion dollars in the hole.
And where did it go? That's the big question. It didn't disappear by itself. Someone has the money (especially the bank deposits).
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June 14, 2014, 09:04:25 AM
 #44

The recovery effort is getting nowhere because nobody competent is pushing forward in the courts in Japan.

I'm not sure that's the problem. I'd say the recovery effort is going nowhere because the situation is beyond recovery. They seem to be something over a billion dollars in the hole.
And where did it go? That's the big question. It didn't disappear by itself. Someone has the money (especially the bank deposits).

Takes a lot of money to pursue the issue in Japan and apparently that money is not forthcoming.

Situation normal, all fucked up.

S.N.A.F.U.

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DrApricot
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June 14, 2014, 07:24:21 PM
 #45

The recovery effort is getting nowhere because nobody competent is pushing forward in the courts in Japan.

I'm not sure that's the problem. I'd say the recovery effort is going nowhere because the situation is beyond recovery. They seem to be something over a billion dollars in the hole.
And where did it go? That's the big question. It didn't disappear by itself. Someone has the money (especially the bank deposits).

Takes a lot of money to pursue the issue in Japan and apparently that money is not forthcoming.

Situation normal, all fucked up.

S.N.A.F.U.
Offer them a deal they can't resist?

There needs to be some kind of flanking maneuver.

Then the situation could be B.T.N. ("Better than normal"). At least there is always that hope.
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June 15, 2014, 01:11:37 AM
 #46

The recovery effort is getting nowhere because nobody competent is pushing forward in the courts in Japan.

I'm not sure that's the problem. I'd say the recovery effort is going nowhere because the situation is beyond recovery. They seem to be something over a billion dollars in the hole.
And where did it go? That's the big question. It didn't disappear by itself. Someone has the money (especially the bank deposits).

Takes a lot of money to pursue the issue in Japan and apparently that money is not forthcoming.

Situation normal, all fucked up.

S.N.A.F.U.
Offer them a deal they can't resist?

There needs to be some kind of flanking maneuver.

Then the situation could be B.T.N. ("Better than normal"). At least there is always that hope.

How much money you got?

What are you gonna do?

Threaten to nuke Tokyo?

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DrApricot
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June 15, 2014, 01:41:13 AM
 #47

The recovery effort is getting nowhere because nobody competent is pushing forward in the courts in Japan.
Offer them a deal they can't resist?
How much money you got?

What are you gonna do?

Threaten to nuke Tokyo?
I  don't have very much skin in this game and not a lot of money for it.

I've already outlined what I thought could work. It's human nature to respond better to carrots than sticks, so it would be counter-productive to ever threaten anyone with anything when you want to get their cooperation.

Simplistically stated, should you want to get a fair shake in Japan, try getting the Japanese authorities on your side. Offer them something they want in exchange for fair treatment.

While I'd love to be pleasantly surprised, it does not appear that right now the bankruptcy proceeding is being administered in the best interests of depositors. Rather, depositors will likely be lumped together with all other "unsecured creditors", and then apportioned some amount of cash from the proceeds of auctioning off the 200,000 bitcoins.

This really stinks, and there has to be a better way!
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June 15, 2014, 03:52:37 AM
 #48

The recovery effort is getting nowhere because nobody competent is pushing forward in the courts in Japan.

I'm not sure that's the problem. I'd say the recovery effort is going nowhere because the situation is beyond recovery. They seem to be something over a billion dollars in the hole.
And where did it go? That's the big question. It didn't disappear by itself. Someone has the money (especially the bank deposits).

I suspect the bank deposits were used to buy BTC on other exchanges at a discount and then sell BTC on GOX (prior to halting withdrawals).

As far as the BTC, I am not sure. If there was an issue with missing private keys I would think that they would have disclosed this by now, or originally.

 
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June 15, 2014, 04:03:29 AM
 #49

While I'd love to be pleasantly surprised, it does not appear that right now the bankruptcy proceeding is being administered in the best interests of depositors. Rather, depositors will likely be lumped together with all other "unsecured creditors", and then apportioned some amount of cash from the proceeds of auctioning off the 200,000 bitcoins.

I don't think there's any information in the public domain about that either way. But in any case it seems unlikely that Gox have substantial debts beyond what they owe depositors, so even if depositors were somehow considered to have priority it wouldn't make much difference to the eventual payout.
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June 15, 2014, 04:58:36 AM
 #50

While I'd love to be pleasantly surprised, it does not appear that right now the bankruptcy proceeding is being administered in the best interests of depositors. Rather, depositors will likely be lumped together with all other "unsecured creditors", and then apportioned some amount of cash from the proceeds of auctioning off the 200,000 bitcoins.

I don't think there's any information in the public domain about that either way. But in any case it seems unlikely that Gox have substantial debts beyond what they owe depositors, so even if depositors were somehow considered to have priority it wouldn't make much difference to the eventual payout.
Certain information is either known or can be conjectured from the available evidence.

There is the alleged missing $27 million in bank deposits. I presume Mizuho or one of Mt. Gox's other banks is probably sitting on it.

A second point is the proximate cause of Mt. Gox declaring itself bankrupt. It seems very likely that the company experienced a cash flow squeeze in which it was unable to service its debts, and said inability resulted in its banks calling in their loans. With no money, Mt. Gox could not continue to operate. Wages could not be covered; rent, service providers, etc. could not be paid, and these creditors would probably file suit in order to recover any outstanding balances. Bankruptcy was the only option at that point.

When a company is being stripped of its assets, the goal of the perpetrators often can be to force it into bankruptcy, and then pose as the saviours who will restructure and return it to profitability. Once they win control over the victim company, then they divide up the spoils, and leave behind an empty shell.

Asset stripping is a nasty business. That's why Mt. Gox depositors need a friend in court, and someone to look out for their interests.
 
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June 15, 2014, 08:28:55 PM
 #51

While I'd love to be pleasantly surprised, it does not appear that right now the bankruptcy proceeding is being administered in the best interests of depositors. Rather, depositors will likely be lumped together with all other "unsecured creditors", and then apportioned some amount of cash from the proceeds of auctioning off the 200,000 bitcoins.

I don't think there's any information in the public domain about that either way. But in any case it seems unlikely that Gox have substantial debts beyond what they owe depositors, so even if depositors were somehow considered to have priority it wouldn't make much difference to the eventual payout.

GOX has very few other creditors (may their employees, and possibly a few vendors).

Grouping depositors with these other groups would likely have a very small impact on the ultimate payout
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June 15, 2014, 10:43:50 PM
 #52

While I'd love to be pleasantly surprised, it does not appear that right now the bankruptcy proceeding is being administered in the best interests of depositors. Rather, depositors will likely be lumped together with all other "unsecured creditors", and then apportioned some amount of cash from the proceeds of auctioning off the 200,000 bitcoins.

I don't think there's any information in the public domain about that either way. But in any case it seems unlikely that Gox have substantial debts beyond what they owe depositors, so even if depositors were somehow considered to have priority it wouldn't make much difference to the eventual payout.

GOX has very few other creditors (may their employees, and possibly a few vendors).

Grouping depositors with these other groups would likely have a very small impact on the ultimate payout
It's unlikely the bankruptcy was declared merely because Mt. Gox couldn't repay all of its depositor's BTC and cash withdrawal requests. By its own admission it still held over 200K BTC (in the old-format wallet). It would have probably chosen first to play fractional reserve banking, or Bernie Madoff 2.0 with those 200K coins, rather than declaring itself bankrupt and risk having the company liquidated.

Most depositors would probably have been better off had the bankruptcy never been declared. At least the smaller depositors (say, those with fewer than 1,000 BTC) in  piecemeal fashion could have withdrawn their coins sourced from the 200K Mt. Gox wallet.

Did you mean to say that the bankruptcy was declared by mistake, because Mt. Gox still held 200K BTC, and could have used them to fund any withdrawal requests? If so, then I could probably come closer to agreeing with you.

You say that Mt. Gox had few debts, yet more than likely, the bankruptcy was brought on by a credit squeeze. Do you have some actual knowledge that would indicate otherwise?
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June 15, 2014, 11:35:18 PM
 #53

Uh, people.........................

It's over.

Deal with it.

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June 16, 2014, 11:46:55 PM
 #54

While I'd love to be pleasantly surprised, it does not appear that right now the bankruptcy proceeding is being administered in the best interests of depositors. Rather, depositors will likely be lumped together with all other "unsecured creditors", and then apportioned some amount of cash from the proceeds of auctioning off the 200,000 bitcoins.

I don't think there's any information in the public domain about that either way. But in any case it seems unlikely that Gox have substantial debts beyond what they owe depositors, so even if depositors were somehow considered to have priority it wouldn't make much difference to the eventual payout.

GOX has very few other creditors (may their employees, and possibly a few vendors).

Grouping depositors with these other groups would likely have a very small impact on the ultimate payout
It's unlikely the bankruptcy was declared merely because Mt. Gox couldn't repay all of its depositor's BTC and cash withdrawal requests. By its own admission it still held over 200K BTC (in the old-format wallet). It would have probably chosen first to play fractional reserve banking, or Bernie Madoff 2.0 with those 200K coins, rather than declaring itself bankrupt and risk having the company liquidated.

Most depositors would probably have been better off had the bankruptcy never been declared. At least the smaller depositors (say, those with fewer than 1,000 BTC) in  piecemeal fashion could have withdrawn their coins sourced from the 200K Mt. Gox wallet.

Did you mean to say that the bankruptcy was declared by mistake, because Mt. Gox still held 200K BTC, and could have used them to fund any withdrawal requests? If so, then I could probably come closer to agreeing with you.

You say that Mt. Gox had few debts, yet more than likely, the bankruptcy was brought on by a credit squeeze. Do you have some actual knowledge that would indicate otherwise?

GOX did not "know" about the 200k BTC wallet/address until after they filed bankruptcy.

They froze withdrawals when they though they had run out of coins. Over the next several weeks they tried to make back their coins by arbitrage, trading fees and customers depositing BTC. They were not successful.
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June 17, 2014, 03:54:25 AM
 #55

Did you mean to say that the bankruptcy was declared by mistake, because Mt. Gox still held 200K BTC, and could have used them to fund any withdrawal requests? If so, then I could probably come closer to agreeing with you.

You say that Mt. Gox had few debts, yet more than likely, the bankruptcy was brought on by a credit squeeze. Do you have some actual knowledge that would indicate otherwise?

GOX did not "know" about the 200k BTC wallet/address until after they filed bankruptcy.

They froze withdrawals when they though they had run out of coins. Over the next several weeks they tried to make back their coins by arbitrage, trading fees and customers depositing BTC. They were not successful.
Had Mt. Gox "known" about the 200K BTC in the old format-wallet, they may never have even declared bk, because they would still have been liquid enough to operate as a fractional-reserve "zombie" exchange, and in time could even have repaid everyone out of their trading fees. So, the bankruptcy declaration was doubtless a mistake.

As long as we're on the subject, it appears more than likely the claim that Mt. Gox lost 850,000 BTC could also have been wrong. They may never have had more than the 200,000 BTC found stashed in the old-format wallet. The narrative runs that 650,000 BTC are still missing, yet 650,000 is the exact same number of BTC traded by the two bots, Markus and Willy. If in fact the BTC traded by these bots were never paid for, then their trades could well constitute a massive uncovered short position, and this could easily explain why more BTC appear on the books than actually ever existed. For more on Markus and Willy, see http://www.theguardian.com/technology/2014/may/29/bitcoin-bots-bought-millions-in-the-last-days-of-mt-gox

Finally, you mentioned that Mt. Gox did not have many debts beside the bitcoins and cash owed to depositors. The actual amount of debt exclusive of what was owed depositors, as stated in the bankruptcy filing, was $63 million. Source: http://www.coindesk.com/mt-gox-files-bankruptcy-claims-63-6m-debt/
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June 17, 2014, 04:57:27 AM
 #56

Did you mean to say that the bankruptcy was declared by mistake, because Mt. Gox still held 200K BTC, and could have used them to fund any withdrawal requests? If so, then I could probably come closer to agreeing with you.

You say that Mt. Gox had few debts, yet more than likely, the bankruptcy was brought on by a credit squeeze. Do you have some actual knowledge that would indicate otherwise?

GOX did not "know" about the 200k BTC wallet/address until after they filed bankruptcy.

They froze withdrawals when they though they had run out of coins. Over the next several weeks they tried to make back their coins by arbitrage, trading fees and customers depositing BTC. They were not successful.
Had Mt. Gox "known" about the 200K BTC in the old format-wallet, they may never have even declared bk, because they would still have been liquid enough to operate as a fractional-reserve "zombie" exchange, and in time could even have repaid everyone out of their trading fees. So, the bankruptcy declaration was doubtless a mistake.

As long as we're on the subject, it appears more than likely the claim that Mt. Gox lost 850,000 BTC could also have been wrong. They may never have had more than the 200,000 BTC found stashed in the old-format wallet. The narrative runs that 650,000 BTC are still missing, yet 650,000 is the exact same number of BTC traded by the two bots, Markus and Willy. If in fact the BTC traded by these bots were never paid for, then their trades could well constitute a massive uncovered short position, and this could easily explain why more BTC appear on the books than actually ever existed. For more on Markus and Willy, see http://www.theguardian.com/technology/2014/may/29/bitcoin-bots-bought-millions-in-the-last-days-of-mt-gox

Finally, you mentioned that Mt. Gox did not have many debts beside the bitcoins and cash owed to depositors. The actual amount of debt exclusive of what was owed depositors, as stated in the bankruptcy filing, was $63 million. Source: http://www.coindesk.com/mt-gox-files-bankruptcy-claims-63-6m-debt/

You are correct, but only if they had known about the 200k wallet prior to halting withdrawals. I think they halted withdrawals because they thought they ran out of bitcoin. If they had found out about the 200k wallet after they stopped withdrawals then they would likely had a "run on the bank" Although this would be very unethical they could have sold that 200k btc on other exchanges and then purchase it back from customers on the GOX exchange. They probably couldn't have made 550k BTC (the amount of lost customer btc minus the 200 btc) from doing this but could have made a pretty penny.

I doubt the failure had anything to do with the bots. It wouldn't even make any sense for them to short via bots when the bots were what was making the prices go up. If anything then they should have been short cash and had extra BTC.  I personally do not believe any of the conspiracy theories about those bots, I believe that the bots were simply large investors trying to purchase large amounts of bitcoin without causing the price to spike.

The article didn't mention exactly what the debts were, but wasn't that about what customers were owed that had fiat deposited with them? Say for example you wired $1,000 to GOX but did not buy any bitcoin from them. They would owe you $1,000 in dollars and nothing in BTC. If I had deposited 2 BTC with GOX and did not sell it then GOX would owe me 2 BTC and nothing in fiat
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June 17, 2014, 05:50:11 AM
 #57

You are correct, but only if they had known about the 200k wallet prior to halting withdrawals. I think they halted withdrawals because they thought they ran out of bitcoin. If they had found out about the 200k wallet after they stopped withdrawals then they would likely had a "run on the bank" Although this would be very unethical they could have sold that 200k btc on other exchanges and then purchase it back from customers on the GOX exchange. They probably couldn't have made 550k BTC (the amount of lost customer btc minus the 200 btc) from doing this but could have made a pretty penny.
The actual bankruptcy filing says a lot of interesting things, including blaming the shortfall on the bitcoin transaction malleability bug. However, this claim has elsewhere been thoroughly debunked. Mt. Gox appears to have experienced a very confusing situation, especially so far as losing the 200K bitcoins, and then later finding them again in the old-format wallet. It's very obvious though that they weren't really ever out of bitcoin, and certainly could have finessed this situation much better had they any mind to do it. It's not at all clear that they ever needed to declare bk. In fact depositors might have responded quite well to a frank admission that "we screwed up, but are going to fix it."
I doubt the failure had anything to do with the bots. It wouldn't even make any sense for them to short via bots when the bots were what was making the prices go up. If anything then they should have been short cash and had extra BTC.
I personally do not believe any of the conspiracy theories about those bots, I believe that the bots were simply large investors trying to purchase large amounts of bitcoin without causing the price to spike.
You are forgetting about the fact that there are always two sides to every trade. If the bots bought bitcoins, then they probably sold them too. The bots purpose may have been to suppress the price of bitcoin through a massive uncovered short position, not inflate it as claimed in the media. There were no trading fees charged for at least one of the two bots' trades, so perhaps their buys could have gone unfunded too.
The article didn't mention exactly what the debts were, but wasn't that about what customers were owed that had fiat deposited with them? Say for example you wired $1,000 to GOX but did not buy any bitcoin from them. They would owe you $1,000 in dollars and nothing in BTC. If I had deposited 2 BTC with GOX and did not sell it then GOX would owe me 2 BTC and nothing in fiat
I would assume like most businesses, Mt. Gox carried a line of credit with its bank to fund any routine needs for liquidity--for example, to pay back a depositor for an incomplete trade, as you mentioned. The actual status of cash deposits and withdrawals are very unclear in this situation, especially considering what the CCI investigators uncovered, suggesting that deposits bound for Mt. Gox from European depositors were deliberately  misrouted by its banks. These kinds of conditions could have resulted in a cash squeeze/illiquidity. Had its bank reacted by revoking Mt. Gox's line of credit, then that would completely dry up its access to cash.
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June 18, 2014, 01:53:56 AM
 #58

You are forgetting about the fact that there are always two sides to every trade. If the bots bought bitcoins, then they probably sold them too.

The truth will come out in the bankruptcy investigation if this is true and the investigator passed a basic college-level accounting class. It is far too easy to follow the money.

I would assume like most businesses, Mt. Gox carried a line of credit with its bank to fund any routine needs for liquidity--for example, to pay back a depositor for an incomplete trade, as you mentioned.

The bank forced cash - squeeze theory certainly has the right motive, but I don't think MtGox would have had a great need for a LOC. While they seemed to live a lavish lifestyle, from the numbers I've seen, it is not much for the profits they were generating.
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June 18, 2014, 08:31:51 PM
 #59

You are forgetting about the fact that there are always two sides to every trade. If the bots bought bitcoins, then they probably sold them too.

The truth will come out in the bankruptcy investigation if this is true and the investigator passed a basic college-level accounting class. It is far too easy to follow the money.

I would assume like most businesses, Mt. Gox carried a line of credit with its bank to fund any routine needs for liquidity--for example, to pay back a depositor for an incomplete trade, as you mentioned.

The bank forced cash - squeeze theory certainly has the right motive, but I don't think MtGox would have had a great need for a LOC. While they seemed to live a lavish lifestyle, from the numbers I've seen, it is not much for the profits they were generating.
I agree, and the more thorough and sooner it can be completed, the better.  So far, the investigation, perhaps understandably so, has been rather opaque--yet that's not exactly the open collaboration way of doing things.

Having a LOC is a very common business practice in order to help manage cash flow. Most businesses of any size use them. It's not related to them 'livin' large', or not.
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June 19, 2014, 06:32:33 AM
 #60

You are correct, but only if they had known about the 200k wallet prior to halting withdrawals. I think they halted withdrawals because they thought they ran out of bitcoin. If they had found out about the 200k wallet after they stopped withdrawals then they would likely had a "run on the bank" Although this would be very unethical they could have sold that 200k btc on other exchanges and then purchase it back from customers on the GOX exchange. They probably couldn't have made 550k BTC (the amount of lost customer btc minus the 200 btc) from doing this but could have made a pretty penny.
The actual bankruptcy filing says a lot of interesting things, including blaming the shortfall on the bitcoin transaction malleability bug. However, this claim has elsewhere been thoroughly debunked. Mt. Gox appears to have experienced a very confusing situation, especially so far as losing the 200K bitcoins, and then later finding them again in the old-format wallet. It's very obvious though that they weren't really ever out of bitcoin, and certainly could have finessed this situation much better had they any mind to do it. It's not at all clear that they ever needed to declare bk. In fact depositors might have responded quite well to a frank admission that "we screwed up, but are going to fix it."
I doubt the failure had anything to do with the bots. It wouldn't even make any sense for them to short via bots when the bots were what was making the prices go up. If anything then they should have been short cash and had extra BTC.
I personally do not believe any of the conspiracy theories about those bots, I believe that the bots were simply large investors trying to purchase large amounts of bitcoin without causing the price to spike.
You are forgetting about the fact that there are always two sides to every trade. If the bots bought bitcoins, then they probably sold them too. The bots purpose may have been to suppress the price of bitcoin through a massive uncovered short position, not inflate it as claimed in the media. There were no trading fees charged for at least one of the two bots' trades, so perhaps their buys could have gone unfunded too.
The article didn't mention exactly what the debts were, but wasn't that about what customers were owed that had fiat deposited with them? Say for example you wired $1,000 to GOX but did not buy any bitcoin from them. They would owe you $1,000 in dollars and nothing in BTC. If I had deposited 2 BTC with GOX and did not sell it then GOX would owe me 2 BTC and nothing in fiat
I would assume like most businesses, Mt. Gox carried a line of credit with its bank to fund any routine needs for liquidity--for example, to pay back a depositor for an incomplete trade, as you mentioned. The actual status of cash deposits and withdrawals are very unclear in this situation, especially considering what the CCI investigators uncovered, suggesting that deposits bound for Mt. Gox from European depositors were deliberately  misrouted by its banks. These kinds of conditions could have resulted in a cash squeeze/illiquidity. Had its bank reacted by revoking Mt. Gox's line of credit, then that would completely dry up its access to cash.


I don't think they every actually "lost the 200k" wallet, they rather tried to take bitcoin out of their cold storage only too see that the cold storage was (virtually) empty. As far as I can tell they did not have a good way to keep track of their cold storage addresses and they assumed that all were empty. When they later discovered that they controlled 200k in bitcoin they disclosed it.

They blamed the malleability issue, other exchanges looked into the issue and determined it would really not be a threat to them. There have been reports that malleability could not have done the damage that was done to GOX but the scope of time that this research did was less then the time that GOX was in existence, it would be very possible that a large part of this kind of attack happened several years ago, in GOX's early days when bitcoin was worth much less.This kind of attack could have happened when the price of bitcoin was much lower and would not have had as large of an impact at the time.

As far as the bot trading is concerned, anything that says the were manulipating the price of bitcoin is crazy. There is evidence that they were trading on behalf of large investors. If they were buying from others without any "real" person paying the price that the bots paid for the bitcoin and receiving the bitcoin that the bots purchased then the exchange would have a massive shortage of fiat. If the bots were "trying to suppress he price of bitcoin via a massive uncovered short positiion" then the exchange would have a massive surplus of fiat to the turn of tens (if not hundreds) of millions of dollars. The trades that the bots executed were (almost) always buy orders so a short position would make even less sense. I don't think there is evidence that has been leaked that shows the bots sold bitcoin to that degree.

I don't follow your logic to say that GOX would have needed a credit line to fund their short term liquidity needs. It is my understanding that GOX only used one bank (it was in Japan) for receiving deposits from customers and processing withdrawals for customers (and for any other banking needs that the exchange had).
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