8 ms·

I'm not convinced this is real, and I happen to think that MtGox is going to go bankrupt. But this doesn't smell right to me. If it's a hoax, then it's well d

by steven2012 13y ago

I'm not convinced this is real, and I happen to think that MtGox is going to go bankrupt. But this doesn't smell right to me. If it's a hoax, then it's well done. I would guess it's something done by an investment banker who knows how to write documents up like this. But the write up is far too melodramatic for me to believe this was written by someone actually involved in the situation. "At the risk of appearing hyperbolic, this could be the end of Bitcoin, at least for most of the public." "This isn’t about saving MtGox anymore." Why is there only a single line on preventing a run on MtGox? That to me would be the most pressing issue once MtGox opened up the floodgates.

stusmall 13y ago
Not only does it put a bigger focus on bitcoin as whole than MtGox, it is extremely negative about the company. I don't know what the intended audience for this is but it wouldn't do a good job of selling the company as a good investment or as good rallying cry for the troops. It reads like it was written by someone who believes in BTC but was burned by MtGox.
- pmorici 13y ago
  Probably targeted toward Gox's investors who are going to be the ones that have to deal with this mess.
deleted 13y ago
[deleted]
- Avalaxy 13y ago
  Doh, those are just events that already happened. Not rocket science here.
Yorn 13y ago
It also uses "robbery" in a really unbusiness-like way. Still, there's only a few things here and there that are kind of out-of-line, and might be of the sort I'd expect for a intended-to-be-internal document.
- krapp 13y ago
  Maybe, maybe not. But Mt. Gox isn't a business. It's an unregulated exchange, so there's really no point in taking for granted that they would meet some standard of professionalism which by definition they don't have to.
  - burnte 13y ago
    It most certainly is a business. They have employees, charge fees, and make a profit (or are supposed to). Exchanges are businesses, and MtGox is most certainly both an exchange and a business.
    - krapp 13y ago
      Fair enough I guess, but I could have an office with a secretary at the front desk and charge people money to extract their teeth, yet that wouldn't actually make me a dentist. I meant Mt.Gox isn't a business in the sense that businesses, typically, have regulatory frameworks they have to follow, and standards to meet. Particularly when they deal with currency. Maybe I should have said there's no reason to expect them to act like professionals.
      - icebraining 13y ago
        I could have an office with a secretary at the front desk and charge people money to extract their teeth, yet that wouldn't actually make me a dentist. Sure you would, just not a licensed one.
      - mcdougle 13y ago
        They're a business. Just not a good one.
ck2 13y ago
It's a clever way to get some $400-$500 BTC But that took some time to manufacturer if fake.
dustcoin 13y ago
I've found a potential inconsistency. The document states their USD assets are $22.5M liquid and $10.5M seized/locked ($33M total) and USD liabilities of $55M. How is this $22M deficit possible when the balance sheet on page 8 (look for the non-redacted version in this thread) shows a positive income for both the 2012 and 2013 fiscal years?
- patio11 13y ago
  They gain transaction fees on both sides of the trade, half in USD/etc and half in Bitcoin. It is possible that they valued their Bitcoin at e.g. market for the purpose of preparing the accounting reports, but did not actually sell it on their own exchange or otherwise. It was, therefore, part of the 120,000 they report as owing themselves, which (if you believe the document) was looted along with the bulk of customers' coins.
waterlesscloud 13y ago
It's not even particularly well done. Doesn't pass even a cursory inspection. It's fake.
- deleted 13y ago
  [deleted]
- cardamomo 13y ago
  Care to shed any light on your reasoning?
ChuckMcM 13y ago
It reads like someone's idea of what "should" be done, sort of an 'open letter' type approach. Time will tell.
deleted 13y ago
[deleted]
berberous 13y ago
It's melodramatic because it sounds like it was authored by, not MtGox, but an in-the-know bitcoin stakeholder who needs to convince other probably reluctant big stakeholders to help bail out MtGox. I'm reminded of the Federal Reserve calling in every major Wall Street bank CEO and demanding that they chip in to help rescue the imploding hedge fund Long Term Capital Management, lest it take down the entire market. http://en.wikipedia.org/wiki/Long-Term_Capital_Management http://en.wikipedia.org/wiki/Long-Term_Capital_Management First time I'm ever seriously considering just cashing out all my coins...
- girvo 13y ago
  If I had any BTC, I'd be cashing out right the hell now. This doesn't bode well for the short term future of bitcoin. Long term, it might overcome it, but I wouldn't take that bet right now.
  - dobbsbob 13y ago
    Check the plummeting price, down to $488 and sinking. Long term it will of course overcome, MtGox was no longer the big market mover it used to be. Their constant incompetence no longer 'goxed' the price like it once did on a regular basis when they were the only major option if it did BTC would be worth pennies again like back in 2011. Longterm things like colored coins are looking good for Bitcoin, plus exchanges not run by complete assclowns
selectodude 13y ago
Definitely real. Joint statement just released on Coinbase. http://blog.coinbase.com/post/77766809700/joint-statement-regarding-the-insolvency-of-mtgox http://blog.coinbase.com/post/77766809700/joint-statement-re... Edit: and now the MtGox website is totally down.
- deleted 13y ago
  [deleted]
- tlrobinson 13y ago
  Weird, Coinbase just updated the post to remove “insolvency”, implying they don’t actually know if Gox is insolvent, or at least they don't want to be the ones to announce it: http://blog.coinbase.com/post/77766809700/joint-statement-regarding-mtgox http://blog.coinbase.com/post/77766809700/joint-statement-re...
- tzs 13y ago
  I may have just overlooked it since I am reading on a small screen, but I don't see anything in there that said anything about the legitimacy of the leaked document. This could just be a general statement on the Gox situation.
- graetzer 13y ago
  The statement doesn't imply anything about a insolvency
  - girvo 13y ago
    The original title specifically said "Insolvency of MtGox"
ev-dev-dev 13y ago
That this could be a ruse (and judging from the prices on Coinbase, a persuasive one) points out the law, the distribution of news, the reporting of news, and the technological systems around Bitcoin are so, so primativ
hristov 13y ago
He has to be hyperbolic, he is asking for a huge favor. He is asking that bitcoin owners essentially donate coins to mt gox in order for them to clear their losses. So in essence he is asking for tens of millions of dollars (at least, maybe hundreds) of free money. And not for charity, but for a profit based enterprise. This is a rather bold request. So to back it up he says the entire fate of bit-coin depends on this. There is only a single line about preventing a run on mtgox, because (a) trading will only start when mtgox is (mostly?) re-capitalized and has most people's bitcoins. And the prevention of a run on mtgox is pretty straightforward and non-controversial ... just limit the amount of withdrawals. I am pretty sure this document is the real thing. But one thing I cannot yet decide is whether he stole all or some of the coins or really lost them. The idea that he lost over 700K of coins over the years without noticing is very hard to believe. On the other hand if he did steal the coins, and now is asking for the community to donate them back to him, then he has an immeasurable amount of chutzpah.
- diydsp 13y ago
  That really does illuminate an angle of the U.S. bank bailouts before... ..that "too big to fail" really is not about jobs or anything like that, but about maintaining faith in the currency.
  - OnyeaboAduba 13y ago
    and stopping riots
    - logicchains 13y ago
      Name one historical instance of bank runs leading to riots.
      - jmnicolas 13y ago
        Wasn't it the case in Argentina ?
AJ007 13y ago
I've been watching the discussion here for the past few hours. Mt Gox failing doesn't surprise me. The number of people stepping up and saying this is a hoax or fake does surprise me. Over 2 months ago I responded to a poster on another bitcoin story who said they had waited over 5 months for their withdrawals. That means Mt Gox has not been solvent since at least last summer. How can there be a run on a bank you can't get your money from? While the recent freezes of USD and BTC withdrawals were only recently announced it appears that you couldn't really get your money out before either. I'm going to take a guess. An investor received this document, was appalled and published it. If I was an investor in Mt Gox and received a document like this, which is clearly an admission of very illegal activity, I would publish it publicly and forward it to the FBI. I don't think there will be a gox.com, but I do think someone will end up on an Interpol list in a few days. Mt Gox wasn't run by people who should be celebrated, it was run by criminals who knowingly took monetary deposits for their insolvent for-profit business.
- kyberias 13y ago
  You are incorrect. I got some money in January 2004 from MtGox. The transfer took 22 days. After that it has been much slower... :)
  - jondtaylor 13y ago
    2004?
    - kyberias 13y ago
      Quit living in the past! ;)
  - AJ007 13y ago
    20 days, 22 days, any entity thats solvent should be able to issue a withdrawal very quickly. It sounds like everyone was delayed, some far more than others for whichever reasons.
- tinco 13y ago
  I received a SEPA withdrawal from them last week, it was 20 days over due, but clearly authorized during the whole fiasco.
steven2012 13y ago
It's been 4 hrs and not a peep from MtGox, so I might be wrong about this being a hoax...
grey-area 13y ago
Why is there only a single line on preventing a run on MtGox? Because preventing one at this point is impossible. If they have truly lost almost everything (2000 BTC remaining), they have nothing, and those USD funds are probably frozen or to be frozen in various investigations. On the contrary, I find this document incredible because it actually envisages keeping mtgox open under new management. That's not going to be possible. Because of massive trust issues with anyone willing to go near this company, at best it's going to close down in an orderly fashion. Putting more money into it now is a lost cause, and without an audit by outside accountants, why should anyone trust them, no matter who the CEO is? If they actually have lots of USD (I am doubtful), the best outcome for them is a precipitous crash in the bitcoin price down to almost zero, at which point they can pay out all their customers in bitcoin easily by purchasing new bitcoin and walk away with millions of USD. They seem to have done their best to engineer this by being completely opaque about their situation, but I suspect that's just incompetence and panic. If they don't have accessible funds in USD, and have lost their BTC (as seems likely), no-one will get anything and the company will be wound up. Payouts have been glacial or nonexistent for months, so something has been badly wrong for quite some time. The best bet for customers now is to apply to financial authorities immediately to have the company shut down and investigated. Wiping their tweets and leaving it to now to shut down the website then showing a blank page shows you what level they are operating on - I suspect they have no appreciable assets available and are running on fumes, if not they would be acting in a far more rational manner and reassuring customers. They will not survive this panic and this will end badly when the financial authorities step in.

stusmall 13y ago

Not only does it put a bigger focus on bitcoin as whole than MtGox, it is extremely negative about the company. I don't know what the intended audience for this is but it wouldn't do a good job of selling the company as a good investment or as good rallying cry for the troops. It reads like it was written by someone who believes in BTC but was burned by MtGox.

pmorici 13y ago
Probably targeted toward Gox's investors who are going to be the ones that have to deal with this mess.

deleted 13y ago

[deleted]

Avalaxy 13y ago
Doh, those are just events that already happened. Not rocket science here.

Yorn 13y ago

It also uses "robbery" in a really unbusiness-like way. Still, there's only a few things here and there that are kind of out-of-line, and might be of the sort I'd expect for a intended-to-be-internal document.

krapp 13y ago
Maybe, maybe not. But Mt. Gox isn't a business. It's an unregulated exchange, so there's really no point in taking for granted that they would meet some standard of professionalism which by definition they don't have to.
- burnte 13y ago
  It most certainly is a business. They have employees, charge fees, and make a profit (or are supposed to). Exchanges are businesses, and MtGox is most certainly both an exchange and a business.
  - krapp 13y ago
    Fair enough I guess, but I could have an office with a secretary at the front desk and charge people money to extract their teeth, yet that wouldn't actually make me a dentist. I meant Mt.Gox isn't a business in the sense that businesses, typically, have regulatory frameworks they have to follow, and standards to meet. Particularly when they deal with currency. Maybe I should have said there's no reason to expect them to act like professionals.
    - icebraining 13y ago
      I could have an office with a secretary at the front desk and charge people money to extract their teeth, yet that wouldn't actually make me a dentist. Sure you would, just not a licensed one.
    - mcdougle 13y ago
      They're a business. Just not a good one.

ck2 13y ago

It's a clever way to get some $400-$500 BTC But that took some time to manufacturer if fake.

dustcoin 13y ago

I've found a potential inconsistency. The document states their USD assets are $22.5M liquid and $10.5M seized/locked ($33M total) and USD liabilities of $55M. How is this $22M deficit possible when the balance sheet on page 8 (look for the non-redacted version in this thread) shows a positive income for both the 2012 and 2013 fiscal years?

patio11 13y ago
They gain transaction fees on both sides of the trade, half in USD/etc and half in Bitcoin. It is possible that they valued their Bitcoin at e.g. market for the purpose of preparing the accounting reports, but did not actually sell it on their own exchange or otherwise. It was, therefore, part of the 120,000 they report as owing themselves, which (if you believe the document) was looted along with the bulk of customers' coins.

waterlesscloud 13y ago

It's not even particularly well done. Doesn't pass even a cursory inspection. It's fake.

deleted 13y ago
[deleted]
cardamomo 13y ago
Care to shed any light on your reasoning?

ChuckMcM 13y ago

It reads like someone's idea of what "should" be done, sort of an 'open letter' type approach. Time will tell.

deleted 13y ago

[deleted]

berberous 13y ago

It's melodramatic because it sounds like it was authored by, not MtGox, but an in-the-know bitcoin stakeholder who needs to convince other probably reluctant big stakeholders to help bail out MtGox. I'm reminded of the Federal Reserve calling in every major Wall Street bank CEO and demanding that they chip in to help rescue the imploding hedge fund Long Term Capital Management, lest it take down the entire market. http://en.wikipedia.org/wiki/Long-Term_Capital_Management http://en.wikipedia.org/wiki/Long-Term_Capital_Management First time I'm ever seriously considering just cashing out all my coins...

girvo 13y ago
If I had any BTC, I'd be cashing out right the hell now. This doesn't bode well for the short term future of bitcoin. Long term, it might overcome it, but I wouldn't take that bet right now.
- dobbsbob 13y ago
  Check the plummeting price, down to $488 and sinking. Long term it will of course overcome, MtGox was no longer the big market mover it used to be. Their constant incompetence no longer 'goxed' the price like it once did on a regular basis when they were the only major option if it did BTC would be worth pennies again like back in 2011. Longterm things like colored coins are looking good for Bitcoin, plus exchanges not run by complete assclowns

selectodude 13y ago

Definitely real. Joint statement just released on Coinbase. http://blog.coinbase.com/post/77766809700/joint-statement-regarding-the-insolvency-of-mtgox http://blog.coinbase.com/post/77766809700/joint-statement-re... Edit: and now the MtGox website is totally down.

deleted 13y ago
[deleted]
tlrobinson 13y ago
Weird, Coinbase just updated the post to remove “insolvency”, implying they don’t actually know if Gox is insolvent, or at least they don't want to be the ones to announce it: http://blog.coinbase.com/post/77766809700/joint-statement-regarding-mtgox http://blog.coinbase.com/post/77766809700/joint-statement-re...
tzs 13y ago
I may have just overlooked it since I am reading on a small screen, but I don't see anything in there that said anything about the legitimacy of the leaked document. This could just be a general statement on the Gox situation.
graetzer 13y ago
The statement doesn't imply anything about a insolvency
- girvo 13y ago
  The original title specifically said "Insolvency of MtGox"

ev-dev-dev 13y ago

That this could be a ruse (and judging from the prices on Coinbase, a persuasive one) points out the law, the distribution of news, the reporting of news, and the technological systems around Bitcoin are so, so primativ

hristov 13y ago

He has to be hyperbolic, he is asking for a huge favor. He is asking that bitcoin owners essentially donate coins to mt gox in order for them to clear their losses. So in essence he is asking for tens of millions of dollars (at least, maybe hundreds) of free money. And not for charity, but for a profit based enterprise. This is a rather bold request. So to back it up he says the entire fate of bit-coin depends on this. There is only a single line about preventing a run on mtgox, because (a) trading will only start when mtgox is (mostly?) re-capitalized and has most people's bitcoins. And the prevention of a run on mtgox is pretty straightforward and non-controversial ... just limit the amount of withdrawals. I am pretty sure this document is the real thing. But one thing I cannot yet decide is whether he stole all or some of the coins or really lost them. The idea that he lost over 700K of coins over the years without noticing is very hard to believe. On the other hand if he did steal the coins, and now is asking for the community to donate them back to him, then he has an immeasurable amount of chutzpah.

diydsp 13y ago
That really does illuminate an angle of the U.S. bank bailouts before... ..that "too big to fail" really is not about jobs or anything like that, but about maintaining faith in the currency.
- OnyeaboAduba 13y ago
  and stopping riots
  - logicchains 13y ago
    Name one historical instance of bank runs leading to riots.
    - jmnicolas 13y ago
      Wasn't it the case in Argentina ?

AJ007 13y ago

I've been watching the discussion here for the past few hours. Mt Gox failing doesn't surprise me. The number of people stepping up and saying this is a hoax or fake does surprise me. Over 2 months ago I responded to a poster on another bitcoin story who said they had waited over 5 months for their withdrawals. That means Mt Gox has not been solvent since at least last summer. How can there be a run on a bank you can't get your money from? While the recent freezes of USD and BTC withdrawals were only recently announced it appears that you couldn't really get your money out before either. I'm going to take a guess. An investor received this document, was appalled and published it. If I was an investor in Mt Gox and received a document like this, which is clearly an admission of very illegal activity, I would publish it publicly and forward it to the FBI. I don't think there will be a gox.com, but I do think someone will end up on an Interpol list in a few days. Mt Gox wasn't run by people who should be celebrated, it was run by criminals who knowingly took monetary deposits for their insolvent for-profit business.

kyberias 13y ago
You are incorrect. I got some money in January 2004 from MtGox. The transfer took 22 days. After that it has been much slower... :)
- jondtaylor 13y ago
  2004?
  - kyberias 13y ago
    Quit living in the past! ;)
- AJ007 13y ago
  20 days, 22 days, any entity thats solvent should be able to issue a withdrawal very quickly. It sounds like everyone was delayed, some far more than others for whichever reasons.
tinco 13y ago
I received a SEPA withdrawal from them last week, it was 20 days over due, but clearly authorized during the whole fiasco.

steven2012 13y ago

It's been 4 hrs and not a peep from MtGox, so I might be wrong about this being a hoax...

grey-area 13y ago

Why is there only a single line on preventing a run on MtGox? Because preventing one at this point is impossible. If they have truly lost almost everything (2000 BTC remaining), they have nothing, and those USD funds are probably frozen or to be frozen in various investigations. On the contrary, I find this document incredible because it actually envisages keeping mtgox open under new management. That's not going to be possible. Because of massive trust issues with anyone willing to go near this company, at best it's going to close down in an orderly fashion. Putting more money into it now is a lost cause, and without an audit by outside accountants, why should anyone trust them, no matter who the CEO is? If they actually have lots of USD (I am doubtful), the best outcome for them is a precipitous crash in the bitcoin price down to almost zero, at which point they can pay out all their customers in bitcoin easily by purchasing new bitcoin and walk away with millions of USD. They seem to have done their best to engineer this by being completely opaque about their situation, but I suspect that's just incompetence and panic. If they don't have accessible funds in USD, and have lost their BTC (as seems likely), no-one will get anything and the company will be wound up. Payouts have been glacial or nonexistent for months, so something has been badly wrong for quite some time. The best bet for customers now is to apply to financial authorities immediately to have the company shut down and investigated. Wiping their tweets and leaving it to now to shut down the website then showing a blank page shows you what level they are operating on - I suspect they have no appreciable assets available and are running on fumes, if not they would be acting in a far more rational manner and reassuring customers. They will not survive this panic and this will end badly when the financial authorities step in.