Dear MT GOX - Stop accepting Dwolla for BTC, use Dwolla only for payouts

[Littleshop]

We all know the risks of taking Dwolla as an incoming payout from random users.  Even if just 1% of the users can get away with scamming you, it is going to hurt your bottom line and lead to greater problems.   And while many of us do not like centralization, we see the value of your service.  You have been an important part of the bitcoin community.  Please do not accept reversible, sources for deposit.   

Please DO keep using Dwolla for withdrawals.  It is the lowest cost method to withdraw USD for American users. This low cost keeps BTC sellers coming to your site.  Most of the other exchanges who have stopped Dwolla altogether have suffered drops in volume.   Sites that charge $5 fee for withdrawals are charging 1% on a $500 transaction are seeing higher BTC prices and therefore no buyers.  The Dwolla withdrawal model really helps.   

To make all of this work, you need to do better at re-filling your Dwolla account.  I am not sure how you do this, but you need to do this more often and with larger amounts.  Slowing standard transactions down to 7 days makes you seem illiquid and should be unnecessary with your profits. 

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[NothinG]

I would say just use https://www.bitinstant.com/ to do the deposit into Dwolla.

[Inaba]

Bitinstant is way too expensive and the $500 limit makes it basically useless.

[DeathAndTaxes]

If MtGox stopped accepting Dwolla then they would have even a greater imbalance of funds and thus require more capital to float.

For example (hypothetical numbers):

Before Dwolla went "crazy" on deposit restrictions.
Dwolla In:  $10K per day
Dwolla Out $12K per day.
Net net Gox had move move $2K USD through banking system to "reload" the Dwolla account.

Since Dwolla went "crazy" on deposit restrictions.
Dwolla In:  $5K per day
Dwolla Out $12K per day.
Net net Gox now has to move move $7K USD through banking system to "reload" the Dwolla account.  The lag in reloading is what has increased the cashout times from hours to days and now weeks.

If MtGox were to stop accepting Dwolla
Dwolla In:  $0K per day
Dwolla Out $12K per day.
Net net Gox now has to move move $12K USD through banking system to "reload" the Dwolla account.  Either cashout times take longer or Gox needs a huge amount of capital.  Say the lag is 4 days.  That would mean they need to have ~$50K in idle cash.  Now I think Gox cashout rate is a lot higher than the hypothetical $12K per day.  If it is say $80K per day then to cover a 4 day lag (and make withdrawals instant to end user) requires ~$300K in capital.

[terrytibbs]

Bitinstant is way too expensive and the $500 limit makes it basically useless.

Most of their market (read: drug users) doesn't agree with you

[NothinG]

Bitinstant is way too expensive and the $500 limit makes it basically useless.

Well, I had my Dwolla -> Mt.Gox frozen for about a week and decided to setup a second transaction through Bitinstant, which took about 15 minutes to get some coins.
It helped me out of a pinch, that's all I've got to say.

[Littleshop]

If MtGox stopped accepting Dwolla then they would have even a greater imbalance of funds and thus require more capital to float.

For example (hypothetical numbers):

Before Dwolla went "crazy" on deposit restrictions.
Dwolla In:  $10K per day
Dwolla Out $12K per day.
Net net Gox had move move $2K USD through banking system to "reload" the Dwolla account.

Since Dwolla went "crazy" on deposit restrictions.
Dwolla In:  $5K per day
Dwolla Out $12K per day.
Net net Gox now has to move move $7K USD through banking system to "reload" the Dwolla account.  The lag in reloading is what has increased the cashout times from hours to days and now weeks.

If MtGox were to stop accepting Dwolla
Dwolla In:  $0K per day
Dwolla Out $12K per day.
Net net Gox now has to move move $12K USD through banking system to "reload" the Dwolla account.  Either cashout times take longer or Gox needs a huge amount of capital.  Say the lag is 4 days.  That would mean they need to have ~$50K in idle cash.  Now I think Gox cashout rate is a lot higher than the hypothetical $12K per day.  If it is say $80K per day then to cover a 4 day lag (and make withdrawals instant to end user) requires ~$300K in capital.

The imbalance can be resolved by depositing the funds in as you have described above.  The probable missing funds due to fraud are the problem here.  It is my hunch that they are loosing money due to Dwolla fraud. 

[waltmarkers]

I'd really love to see mtgox submit to regular independent audits to insure they have the fiat and coin balances to cover their accounts. Quarterly would be nice. It's one of the reasons I dont leave large balances there.

[Mt.Gox Support]

I'd really love to see mtgox submit to regular independent audits to insure they have the fiat and coin balances to cover their accounts. Quarterly would be nice. It's one of the reasons I dont leave large balances there.

We will love this too, however in our case this is not as easy as some want to believe. We contacted several companies for that, and all came with some rather impressive cost estimation, something that is far beyond what we are currently paying for our law firm (Details in our last transparency doc). This would also involve us paying  for their travel expenses in six different countries and stay there as long as they feel it is necessary to complete the audit.

We are not against the audit, hell we would love to get this done and not only for us but for any anyone, but this will come to a cost that will have an impact on how our customers are using Mt.Gox today.

[EnergyVampire]

I'd really love to see mtgox submit to regular independent audits to insure they have the fiat and coin balances to cover their accounts. Quarterly would be nice. It's one of the reasons I dont leave large balances there.

We will love this too, however in our case this is not as easy as some want to believe. We contacted several companies for that, and all came with some rather impressive cost estimation, something that is far beyond what we are currently paying for our law firm (Details in our last transparency doc). This would also involve us paying  for their travel expenses in six different countries and stay there as long as they feel it is necessary to complete the audit.

We are not against the audit, hell we would love to get this done and not only for us but for any anyone, but this will come to a cost that will have an impact on how our customers are using Mt.Gox today.

Hello, what would you consider a reasonable price for these audits?

I have a family member who is a CPA in the USA. This person has a long resume which includes major accounting firms, major financial firms and various Government Financial Crimes Units. He/she specializes in financial audits, forensic accounting and US tax laws. I don't know what the fee is but I can make introductions if you are interested.

[shtylman]

Please DO keep using Dwolla for withdrawals.  It is the lowest cost method to withdraw USD for American users. This low cost keeps BTC sellers coming to your site.  Most of the other exchanges who have stopped Dwolla altogether have suffered drops in volume.   Sites that charge $5 fee for withdrawals are charging 1% on a $500 transaction are seeing higher BTC prices and therefore no buyers.  The Dwolla withdrawal model really helps.   

This is no longer true. At Bitfloor we offer Free ACH withdraw (direct deposit) to your American bank accounts. We can do this faster and cheaper than Dwolla.

Since we have stopped Dwolla and provided cash deposit and ACH withdraw our volume has only gone up. Not only that, but cash deposits are free and faster than new users getting started and having to deal with Dwolla.

[Raize]

I would love to use Bitfloor as a replacement for Dwolla/MtGox, primarily because Dwolla puts in requirements and then MtGox misinterprets them and this has been going on now for a while. Dwolla puts in a requirement for verification and MtGox won't return the money of customers that choose not to verify, because they have to via Dwolla.

I'd just as soon deal with one vendor and avoid all this nonsense, but the nearest deposit location is like 2 hours from me.

[shtylman]

I would love to use Bitfloor as a replacement for Dwolla/MtGox, primarily because Dwolla puts in requirements and then MtGox misinterprets them and this has been going on now for a while. Dwolla puts in a requirement for verification and MtGox won't return the money of customers that choose not to verify, because they have to via Dwolla.

I'd just as soon deal with one vendor and avoid all this nonsense, but the nearest deposit location is like 2 hours from me.

We also accept ING P2P and popmoney deposits for free. If you have no Chase branches near you, I suggest using one of those methods.