6 ms·

Statement Regarding Bitcoin Withdrawal Delays

106 points by sillysaurus2 13y ago

otoburb 13y ago
I really wish you had put in the word "temporarily" in your HN title. Thankfully, fiat withdrawals aren't affected, although there still remains the issue that fiat takes a while (more than 4 weeks) to get out of MtGox. EDIT: Thanks for updating the title appropriately.
- huwtheperson 13y ago
  It's annoying that people make these sensationalist titles when really all that's happened is another bug. Comes at a bad time though, with the latest $200 crash due to the war on Bitcoin apps.
  - ekianjo 13y ago
    > all that's happened is another bug It makes you wonder if it's really a bug if they are just using this an excuse to hide a more significant issue.
  - antics 13y ago
    > all that's happened is another bug Yes, all that's happened is a bug that completely halted trading at a financial service managing millions and millions of dollars worth of assets. At every point in the sad journey of Mt Gox -- from expertly storing passwords in plaintext (EDIT: actually it was unsalted MD5 hashes, but still, jesus christ) to this awful business of freezing the entire exchange -- the bitcoin community has fallen all over itself to forgive and excuse them. How much is too much? You people should be calling for someone's head on a damn platter.
    - jnbiche 13y ago
      You left out the inability to keep a trading engine running under modest load after two years of lost opportunity to fix the problem. Turns out most of those "DDos" attacks on Gox were simply their customers wanting to trade at modest to moderately-high Bitcoin volume (aka low volume in traditional exchanges).
- ihuman 13y ago
  A mod has edited the title of the submission to include the word "temporary"
- sillysaurus2 13y ago
  Sorry... I should have used the original title. I'm still sort of in shock. I allowed myself to believe it was a good idea to store all of my bitcoin in mtgox, due to their One Time Password protection features. Once I realized something was up, and realized that only small withdraws of <0.05 BTC were being processed, I spent the last 24 hours salvaging as much as I could. I was able to withdraw 3.4 BTC of my 9.2 total. There are still 0.65 in my MtGox account. The remaining 5.15 are stuck in "withdraw limbo" due to the technical problems. MtGox has set up a system to automatically refund all stuck withdraws exactly 7 days after they get stuck. So, hopefully 7 days from now I'll be able to withdraw the rest, if MtGox allows it. I hope their Monday update will bring good news... Once again, sorry about the original title.
  - otoburb 13y ago
    No worries, and thanks for updating the post title. I know plenty of people who have BTC and fiat stuck in MtGox. Congrats on getting at least a third of your holdings out. A bunch of people are looking forward to the MtGox update on Monday.
  - nwh 13y ago
    Before you get too worried, it's likely more a technical problem with their wallet software than them not having the funds to spend. It seems to be that they are losing track of which inputs they have spent and which ones haven't, and everything is getting backed up behind a mound of transactions with unmet dependancies. No doubt they'll sort it out and be back to processing withdrawals again in no time.
    - ekianjo 13y ago
      Not sure how you can be so confident there's no other issue. I certainly hope you are right, though...
      - Daniel_Newby 13y ago
        Historically, collapsing banks simply collapse all at once. There is no incentive to slowly unveil a fraud. The depositors might kill you.
- downandout 13y ago
  I stopped using Gox long ago because of the fiat withdrawal issues. Their reign as the king of the Bitcoin markets boggles my mind. Like Bitinstant, somehow the fact that they were among the first in this space has engendered undying loyalty in the face of outrageous problems that would be instant business killers for any site other than themselves. It's a fascinating study in brand loyalty, but is also ultimately hurtful to the Bitcoin community. Customer acceptance of Gox's mediocrity will only ensure that these and even more egregious issues continue to occur.
  - jnbiche 13y ago
    I agree -- I stopped having anything to do with them after the debacles of 2011. Karpales is a pretty stunning mix of hubris and incompetence -- the kind that only happens in a very few people. To be honest, I wouldn't mind another big crash if it finally woke people up to the incompetence, greed, and customer contempt that is Mt. Gox. Yet somehow, it never does...
- jaggederest 13y ago
  "More than 4 weeks" could as well read "More than 6 months", that's how long I was been waiting before I cancelled the attempt and pulled it via bitcoin.
kaonashi 13y ago
Bank runs, huh.
- sounds 13y ago
  Okay, let's break down the theory here. Traditional banks take deposits of USD, loan them out using fractional reserve, and fail if depositors all simultaneously run to the bank and close their account. Banks need loans to pay operating costs (I suppose) so any economy (specifically, currency) with loans going on will need deposit insurance, i.e. all banks will eventually end up subsidiaries of a single enormous bank - the Federal Reserve. MtGox does not do loans. In fact, BTC loans are so risky that no large scale lending happens in BTC. Unless MtGox embezzled funds or shredded BTC (see below), they will ultimately have the ability to honor all payment requests and _still_ have their profits. It is possible they've had some sort of error which has irretrievably sent BTC to random addresses where it can't feasibly be recovered. If this is true, they should say so. On their USD side, they are struggling and may have chosen to use some BTC deposits to generate USD funds to accelerate payouts. However, I find this unlikely since their USD payout problem has only gotten worse. I may be wrong; if MtGox is trying to play with their deposits, they should say so. In other words, check your assumptions. And MtGox of course has always had a problem with communication.
  - kristianp 13y ago
    Wasn't there a seizure of a portion of their USD funds though? That would affect their ability to refund all their customers.
    - sounds 13y ago
      I specifically addressed why that would not affect their BTC payouts.
  - CamperBob2 13y ago
    MtGox does not loan out currency. Unless they've embezzled funds or shredded BTC (see below), they will ultimately have the ability to honor all payment requests and _still_ have their profits. Or unless they were hacked, and simply don't have the BTC anymore.
tomcorrigan 13y ago
The end of Mt Gox began a long time ago with delayed payouts of hard currency but this is surely the first nail in the coffin.
brokenmusic 13y ago
They should at least remove trading fees for a while, that's the least they can do to please the customers.
deleted 13y ago
[deleted]
lhl 13y ago
I've stayed away from MtGox due to their issues w/ fiat transfers from last year (which seem to be ongoing), however, technical problems aren't a new thing for them over the years. I've heard not so great things about the technical underpinnings of their custom Bitcoin protocol implementation. Here's a discussion from r/bitcoin that talks about how their implementation is out of spec, as well as some of the long-running bugs they have w/ unconfirmed coins, etc: http://www.reddit.com/r/Bitcoin/comments/1x91xq/mtgox_announcement_to_stop_btc_withdrawals/cf990ey http://www.reddit.com/r/Bitcoin/comments/1x91xq/mtgox_announ... and details on what may be the actual bug w/ their bitcoin_tx implementation: http://www.reddit.com/r/Bitcoin/comments/1x91xq/mtgox_announcement_to_stop_btc_withdrawals/cf99ugh http://www.reddit.com/r/Bitcoin/comments/1x91xq/mtgox_announ... When I got back into bitcoin recently, I tried signing up w/ a bunch of exchanges, but ended up using Coinbase and have been pretty happy with them. I've still been transferring coins into my own cold wallets though. The whole point of Bitcoin is that you don't need to introduce counterparty risk by having someone else hold your money.
- lhl 13y ago
  As a followup, someone apparently flew from Australia to Japan to try to get his BTC and has just posted an interesting writeup: http://www.reddit.com/r/Bitcoin/comments/1x9gue/my_protest_at_mtgox_offices_5_to_7th_february/ http://www.reddit.com/r/Bitcoin/comments/1x9gue/my_protest_a... MtGox has been building up failed transactions for over a week: http://falkvinge.net/2014/02/04/major-bitcoin-exchange-not-executing-withdrawals-now-owes-clients-38m-in-disappeared-money/ http://falkvinge.net/2014/02/04/major-bitcoin-exchange-not-e... Relatively realtime tx data: http://coinsight.org/mtgox.html http://coinsight.org/mtgox.html via http://thegoxreport.com/ http://thegoxreport.com/
- makomk 13y ago
  Oh dear. According to that, several transactions are using the same input, which basically means that they're trying to use the same Bitcoins to pay multiple people. So Mt Gox may never even have had enough Bitcoins in their hot wallet to make all the payments they claim to have already sent out.
jcfrei 13y ago
I'm confused: http://coinsight.org/mtgox.html http://coinsight.org/mtgox.html currently shows a sharp drop in stuck transactions. is that simply because they paused any pending withdrawal requests? or are funds leaving gox?
- mathrawka 13y ago
  They have been returning stuck transfers back to accounts. I'm not 100% sure if the API marks those as un-stuck though.
dschiptsov 13y ago
So, take your popcorn and watch the sell off.)
chrisBob 13y ago
Everyone says they want BTC because they don't trust the government, then puts their money into MtGox. I trust my government a lot more than I trust MtGox. Bitcoin might be the solution to a problem, but I am not sure exchanges like this are.
- hammock 13y ago
  There is some risk with early adoption. Reliability will be lower. That's why NASA built the space shuttles uses decades-old computers in its spacecraft. But that doesn't mean it's not the solution to a problem
- whileonebegin 13y ago
  What's not to trust? When your bank's name stands for "Magic: The Gathering Online Exchange".
jnbiche 13y ago
I think there's a lot of circumstantial evidence that the transaction that caused the huge spike in Bitcoin Days Destroyed yesterday was caused by Karpeles bringing some old coins out of cold storage: https://blockchain.info/charts/bitcoin-days-destroyed https://blockchain.info/charts/bitcoin-days-destroyed My guess is that he was finally convinced to do so by the "early adopter" described at the bottom of this post: http://www.reddit.com/r/Bitcoin/comments/1x9gue/my_protest_at_mtgox_offices_5_to_7th_february/ http://www.reddit.com/r/Bitcoin/comments/1x9gue/my_protest_a... I'd bet that this early adopter had some information or leverage that forced Karpeles's hand. This balance may be from an old Mt. Gox cold storage address, but it's equally possible that Karpeles is using some of his personal holdings to cover the amount owed for one big customer, or perhaps more. Furthermore, I actually now believe that Mt. Gox is having technical problems with Bitcoin withdrawals. Their poorly-designed custom Bitcoin node is evidently having problems coping with the newly-mined inputs a lot of people were directing straight into their Mt. Gox account. Before, I was thinking that people should just write off their Gox holdings, or prepare for a lawsuit if the holdings are big enough, but I now believe that there's a decent chance that people will be able to eventually withdraw their balance in Bitcoins (USD transfers still look impossible for most people). Finally, a personal note to those with coins stuck at Gox: Please, even if you are able to eventually recover your coins, and even if future trading opportunities on Mt. Gox are incredibly profitable, please, please don't do any further business at Gox. Gox has been harming the Bitcoin ecosystem since back in 2011, when their incompetence, greed, and contempt for customers first reared its ugly head. Since then, the same problems have repeated themselves, time after time. Please don't go back. Remember this pain.
blueskin_ 13y ago
What are the odds they're waiting for the price to drop before paying out? Fairly high, I'd say.
bobjordan 13y ago
My grandpa once told me there are two things you can't really trust anyone to hold for you: #1) your lady #2) your money. I laughed it off at first, but over the years, it's repeatedly proven true. These exchanges are a weak point.
- njloof 13y ago
  Tell us more about your #1 stories.

106 points by sillysaurus2 13y ago

I really wish you had put in the word "temporarily" in your HN title. Thankfully, fiat withdrawals aren't affected, although there still remains the issue that fiat takes a while (more than 4 weeks) to get out of MtGox. EDIT: Thanks for updating the title appropriately.

huwtheperson 13y ago
It's annoying that people make these sensationalist titles when really all that's happened is another bug. Comes at a bad time though, with the latest $200 crash due to the war on Bitcoin apps.
- ekianjo 13y ago
  > all that's happened is another bug It makes you wonder if it's really a bug if they are just using this an excuse to hide a more significant issue.
- antics 13y ago
  > all that's happened is another bug Yes, all that's happened is a bug that completely halted trading at a financial service managing millions and millions of dollars worth of assets. At every point in the sad journey of Mt Gox -- from expertly storing passwords in plaintext (EDIT: actually it was unsalted MD5 hashes, but still, jesus christ) to this awful business of freezing the entire exchange -- the bitcoin community has fallen all over itself to forgive and excuse them. How much is too much? You people should be calling for someone's head on a damn platter.
  - jnbiche 13y ago
    You left out the inability to keep a trading engine running under modest load after two years of lost opportunity to fix the problem. Turns out most of those "DDos" attacks on Gox were simply their customers wanting to trade at modest to moderately-high Bitcoin volume (aka low volume in traditional exchanges).
ihuman 13y ago
A mod has edited the title of the submission to include the word "temporary"
sillysaurus2 13y ago
Sorry... I should have used the original title. I'm still sort of in shock. I allowed myself to believe it was a good idea to store all of my bitcoin in mtgox, due to their One Time Password protection features. Once I realized something was up, and realized that only small withdraws of <0.05 BTC were being processed, I spent the last 24 hours salvaging as much as I could. I was able to withdraw 3.4 BTC of my 9.2 total. There are still 0.65 in my MtGox account. The remaining 5.15 are stuck in "withdraw limbo" due to the technical problems. MtGox has set up a system to automatically refund all stuck withdraws exactly 7 days after they get stuck. So, hopefully 7 days from now I'll be able to withdraw the rest, if MtGox allows it. I hope their Monday update will bring good news... Once again, sorry about the original title.
- otoburb 13y ago
  No worries, and thanks for updating the post title. I know plenty of people who have BTC and fiat stuck in MtGox. Congrats on getting at least a third of your holdings out. A bunch of people are looking forward to the MtGox update on Monday.
- nwh 13y ago
  Before you get too worried, it's likely more a technical problem with their wallet software than them not having the funds to spend. It seems to be that they are losing track of which inputs they have spent and which ones haven't, and everything is getting backed up behind a mound of transactions with unmet dependancies. No doubt they'll sort it out and be back to processing withdrawals again in no time.
  - ekianjo 13y ago
    Not sure how you can be so confident there's no other issue. I certainly hope you are right, though...
    - Daniel_Newby 13y ago
      Historically, collapsing banks simply collapse all at once. There is no incentive to slowly unveil a fraud. The depositors might kill you.
downandout 13y ago
I stopped using Gox long ago because of the fiat withdrawal issues. Their reign as the king of the Bitcoin markets boggles my mind. Like Bitinstant, somehow the fact that they were among the first in this space has engendered undying loyalty in the face of outrageous problems that would be instant business killers for any site other than themselves. It's a fascinating study in brand loyalty, but is also ultimately hurtful to the Bitcoin community. Customer acceptance of Gox's mediocrity will only ensure that these and even more egregious issues continue to occur.
- jnbiche 13y ago
  I agree -- I stopped having anything to do with them after the debacles of 2011. Karpales is a pretty stunning mix of hubris and incompetence -- the kind that only happens in a very few people. To be honest, I wouldn't mind another big crash if it finally woke people up to the incompetence, greed, and customer contempt that is Mt. Gox. Yet somehow, it never does...
jaggederest 13y ago
"More than 4 weeks" could as well read "More than 6 months", that's how long I was been waiting before I cancelled the attempt and pulled it via bitcoin.

kaonashi 13y ago

Bank runs, huh.

sounds 13y ago
Okay, let's break down the theory here. Traditional banks take deposits of USD, loan them out using fractional reserve, and fail if depositors all simultaneously run to the bank and close their account. Banks need loans to pay operating costs (I suppose) so any economy (specifically, currency) with loans going on will need deposit insurance, i.e. all banks will eventually end up subsidiaries of a single enormous bank - the Federal Reserve. MtGox does not do loans. In fact, BTC loans are so risky that no large scale lending happens in BTC. Unless MtGox embezzled funds or shredded BTC (see below), they will ultimately have the ability to honor all payment requests and _still_ have their profits. It is possible they've had some sort of error which has irretrievably sent BTC to random addresses where it can't feasibly be recovered. If this is true, they should say so. On their USD side, they are struggling and may have chosen to use some BTC deposits to generate USD funds to accelerate payouts. However, I find this unlikely since their USD payout problem has only gotten worse. I may be wrong; if MtGox is trying to play with their deposits, they should say so. In other words, check your assumptions. And MtGox of course has always had a problem with communication.
- kristianp 13y ago
  Wasn't there a seizure of a portion of their USD funds though? That would affect their ability to refund all their customers.
  - sounds 13y ago
    I specifically addressed why that would not affect their BTC payouts.
- CamperBob2 13y ago
  MtGox does not loan out currency. Unless they've embezzled funds or shredded BTC (see below), they will ultimately have the ability to honor all payment requests and _still_ have their profits. Or unless they were hacked, and simply don't have the BTC anymore.

tomcorrigan 13y ago

The end of Mt Gox began a long time ago with delayed payouts of hard currency but this is surely the first nail in the coffin.

brokenmusic 13y ago

They should at least remove trading fees for a while, that's the least they can do to please the customers.

deleted 13y ago

[deleted]

lhl 13y ago

I've stayed away from MtGox due to their issues w/ fiat transfers from last year (which seem to be ongoing), however, technical problems aren't a new thing for them over the years. I've heard not so great things about the technical underpinnings of their custom Bitcoin protocol implementation. Here's a discussion from r/bitcoin that talks about how their implementation is out of spec, as well as some of the long-running bugs they have w/ unconfirmed coins, etc: http://www.reddit.com/r/Bitcoin/comments/1x91xq/mtgox_announcement_to_stop_btc_withdrawals/cf990ey http://www.reddit.com/r/Bitcoin/comments/1x91xq/mtgox_announ... and details on what may be the actual bug w/ their bitcoin_tx implementation: http://www.reddit.com/r/Bitcoin/comments/1x91xq/mtgox_announcement_to_stop_btc_withdrawals/cf99ugh http://www.reddit.com/r/Bitcoin/comments/1x91xq/mtgox_announ... When I got back into bitcoin recently, I tried signing up w/ a bunch of exchanges, but ended up using Coinbase and have been pretty happy with them. I've still been transferring coins into my own cold wallets though. The whole point of Bitcoin is that you don't need to introduce counterparty risk by having someone else hold your money.

lhl 13y ago
As a followup, someone apparently flew from Australia to Japan to try to get his BTC and has just posted an interesting writeup: http://www.reddit.com/r/Bitcoin/comments/1x9gue/my_protest_at_mtgox_offices_5_to_7th_february/ http://www.reddit.com/r/Bitcoin/comments/1x9gue/my_protest_a... MtGox has been building up failed transactions for over a week: http://falkvinge.net/2014/02/04/major-bitcoin-exchange-not-executing-withdrawals-now-owes-clients-38m-in-disappeared-money/ http://falkvinge.net/2014/02/04/major-bitcoin-exchange-not-e... Relatively realtime tx data: http://coinsight.org/mtgox.html http://coinsight.org/mtgox.html via http://thegoxreport.com/ http://thegoxreport.com/
makomk 13y ago
Oh dear. According to that, several transactions are using the same input, which basically means that they're trying to use the same Bitcoins to pay multiple people. So Mt Gox may never even have had enough Bitcoins in their hot wallet to make all the payments they claim to have already sent out.

jcfrei 13y ago

I'm confused: http://coinsight.org/mtgox.html http://coinsight.org/mtgox.html currently shows a sharp drop in stuck transactions. is that simply because they paused any pending withdrawal requests? or are funds leaving gox?

mathrawka 13y ago
They have been returning stuck transfers back to accounts. I'm not 100% sure if the API marks those as un-stuck though.

dschiptsov 13y ago

So, take your popcorn and watch the sell off.)

chrisBob 13y ago

Everyone says they want BTC because they don't trust the government, then puts their money into MtGox. I trust my government a lot more than I trust MtGox. Bitcoin might be the solution to a problem, but I am not sure exchanges like this are.

hammock 13y ago
There is some risk with early adoption. Reliability will be lower. That's why NASA built the space shuttles uses decades-old computers in its spacecraft. But that doesn't mean it's not the solution to a problem
whileonebegin 13y ago
What's not to trust? When your bank's name stands for "Magic: The Gathering Online Exchange".

jnbiche 13y ago

I think there's a lot of circumstantial evidence that the transaction that caused the huge spike in Bitcoin Days Destroyed yesterday was caused by Karpeles bringing some old coins out of cold storage: https://blockchain.info/charts/bitcoin-days-destroyed https://blockchain.info/charts/bitcoin-days-destroyed My guess is that he was finally convinced to do so by the "early adopter" described at the bottom of this post: http://www.reddit.com/r/Bitcoin/comments/1x9gue/my_protest_at_mtgox_offices_5_to_7th_february/ http://www.reddit.com/r/Bitcoin/comments/1x9gue/my_protest_a... I'd bet that this early adopter had some information or leverage that forced Karpeles's hand. This balance may be from an old Mt. Gox cold storage address, but it's equally possible that Karpeles is using some of his personal holdings to cover the amount owed for one big customer, or perhaps more. Furthermore, I actually now believe that Mt. Gox is having technical problems with Bitcoin withdrawals. Their poorly-designed custom Bitcoin node is evidently having problems coping with the newly-mined inputs a lot of people were directing straight into their Mt. Gox account. Before, I was thinking that people should just write off their Gox holdings, or prepare for a lawsuit if the holdings are big enough, but I now believe that there's a decent chance that people will be able to eventually withdraw their balance in Bitcoins (USD transfers still look impossible for most people). Finally, a personal note to those with coins stuck at Gox: Please, even if you are able to eventually recover your coins, and even if future trading opportunities on Mt. Gox are incredibly profitable, please, please don't do any further business at Gox. Gox has been harming the Bitcoin ecosystem since back in 2011, when their incompetence, greed, and contempt for customers first reared its ugly head. Since then, the same problems have repeated themselves, time after time. Please don't go back. Remember this pain.

blueskin_ 13y ago

What are the odds they're waiting for the price to drop before paying out? Fairly high, I'd say.

bobjordan 13y ago

My grandpa once told me there are two things you can't really trust anyone to hold for you: #1) your lady #2) your money. I laughed it off at first, but over the years, it's repeatedly proven true. These exchanges are a weak point.

njloof 13y ago
Tell us more about your #1 stories.