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I'm one of those who lost a good amount on MtGox. It wasn't in there because I thought they are a bank, I put it there because I like to speculate from time to

by Udo 13y ago

I'm one of those who lost a good amount on MtGox. It wasn't in there because I thought they are a bank, I put it there because I like to speculate from time to time. As such I was prepared to lose most if not all of it anyway. I didn't expect things to go wrong so thoroughly, but still that was the premise of my deposits there. So from that perspective, I'm not really mad about them losing the money. It's unfortunate, it even really sucks, but shit happens. Sometimes that shit is an apocalyptic event. What makes me angry though is their utter failure to communicate, to admit what happened. I feel like they're taunting their ex customers, or at the very least they don't give a crap about anything at all. That's what's really off-putting, and that's what breeds speculation about them being the ones who perpetrated the theft in the first place (which I personally don't believe). Instead what we see here is an absolute non-message from them. It's like this Seinfeld episode with the shirt at the dry cleaners. We know they shrunk it, they know they shrunk it, so they should just come right out and admit "we shrunk it"!

ck2 13y ago
I guess I am naive but I always thought Japan would actually have stricter regulations and penalties for businesses that do this kind of thing, relative to the US.
- pjc50 13y ago
  They might .. but enforcement is hardly automatic and tends to be slow. They might already be investigating.
  - hga 13y ago
    Exactly. The US has a pretty good, as these things go, food protection regime. But it hardly mattered when Peanut Corporation of America (https://en.wikipedia.org/wiki/Peanut_Corporation_of_America https://en.wikipedia.org/wiki/Peanut_Corporation_of_America) set up a factory in Texas and never informed any of the authorities so it could be regulated. (That wasn't the only facility that was rotten, but the one the regulators never had a chance to fail in dealing with.)
sneak 13y ago
> or at the very least they don't give a crap about anything at all They were the market leader, with substantial revenue and lots of cash flow. Why they didn't prioritize hiring some people and securing their platform is still beyond my understanding. It's up there with the $100+ billion in cash Apple is evidently not using to hire enough code reviewers or implement adequate security processes for their most important and sensitive code that supports their entire (massively profitable) business. I really wonder where people's priorities are. They're not total morons; it must be an interesting reason why these circumstances happen. It's not hard to solve these problems with money - so there has to be a neat (if utterly dysfunctional) story behind it. Seriously, guys. Spend $20 on a flu shot for your golden goose.
- rsanders 13y ago
  I couldn't agree with this more. It's human nature not to prepare for a theoretical risk. But once it's happened to you, and to many others in the same industry, it's just foolishness not to invest in prevention. I imagine there's also a bit of outsider-preference going on here. There's no lack of people who could have been hired to implement controls and audits that would have easily caught a slow leak of coins, but they're part of the Obsolete Fiat Economy and thus irrelevant. "Dunning-Krugerrands", indeed.
  - sneak 13y ago
    I don't think your (or their) equating "competent programmers and businesspeople with common sense" with "obsolete fiat economy" is what happened - it's not really a meaningful logical jump. There's got to be something else.
  - mtkd 13y ago
    > It's human nature not to prepare for a theoretical risk That's a substantial generalisation. Some people, especially in software engineering, spend a great deal of their day thinking how best to prepare for theoretical risk.
    - rsanders 13y ago
3rd3 13y ago
How much did you lose on it?
- Udo 13y ago
  Enough to feel uncomfortable telling people the amount ;)
  - kyberias 13y ago
    Bro-hug. :) Seriously.
sillysaurus3 13y ago
It's not even as simple as a failure to communicate. It's hard not to conclude that they outright lied. First it was malleability, then it was "we're waiting on bitcoin developers," then it was "we've moved due to protesters and security problems," and now it's "we've closed our site due to recent news reports." I wonder when precisely they realized that >700,000btc were missing.
- GigabyteCoin 13y ago
  If I'm not mistaken, mtgox has not publicly stated that >700k BTC are indeed missing.
  - waterlesscloud 13y ago
    I think it's extremely unlikely the total missing coins is anywhere near that number. Extremely.
- pliny 13y ago
  >I wonder when precisely they realized that >700,000btc were missing. Once they stole the 700,001st bitcoin?
- fnordfnordfnord 13y ago
  I have a speculation: This has been an ongoing issue for some time now. Kerpeles was hoping to solve the problem before it became known widely, and if lucky be able to continue operation as a fractional reserve (unbeknownst to MtGox clients). We could be really charitable to him and assume that he intended to eventually repay the missing BTC from the proceeds of MtGox. At some point, that became an impossibility, but Kerpeles clung to the belief that he could rectify the situation. Kerpeles didn't communicate succinctly with people outside his organization because that would risk alerting outsiders to the extent of the problem and cause a "run on the bank". >I wonder when precisely they realized that >700,000btc were missing. Stating the obvious, but it didn't occur all at once. If my speculation bears any resemblance to reality, it would be interesting to know when MtGox' solvency tipped past any chance of recovery, and how long Kerpeles has known that to be the case. I'm thinking that a year or more may have passed.
ig1 13y ago
If they're under investigation by a regulator or a criminal prosector they may be severely legally restricted as to what they can say publicly.
BlackDeath3 13y ago
OK... ... ... I shrunk it.
enscr 13y ago
There was a comment on some forum about a guy who interviewed with them for a job & learnt that they don't have a testing environment. They just push changes to the production code & see how it goes. In my opinion, they were asking for it. Edit : Here's the link : http://www.reddit.com/r/Bitcoin/comments/1x9gue/my_protest_at_mtgox_offices_5_to_7th_february/cf9dgei http://www.reddit.com/r/Bitcoin/comments/1x9gue/my_protest_a...

by Udo 13y ago

ck2 13y ago

I guess I am naive but I always thought Japan would actually have stricter regulations and penalties for businesses that do this kind of thing, relative to the US.

pjc50 13y ago
They might .. but enforcement is hardly automatic and tends to be slow. They might already be investigating.
- hga 13y ago
  Exactly. The US has a pretty good, as these things go, food protection regime. But it hardly mattered when Peanut Corporation of America (https://en.wikipedia.org/wiki/Peanut_Corporation_of_America https://en.wikipedia.org/wiki/Peanut_Corporation_of_America) set up a factory in Texas and never informed any of the authorities so it could be regulated. (That wasn't the only facility that was rotten, but the one the regulators never had a chance to fail in dealing with.)

sneak 13y ago

> or at the very least they don't give a crap about anything at all They were the market leader, with substantial revenue and lots of cash flow. Why they didn't prioritize hiring some people and securing their platform is still beyond my understanding. It's up there with the $100+ billion in cash Apple is evidently not using to hire enough code reviewers or implement adequate security processes for their most important and sensitive code that supports their entire (massively profitable) business. I really wonder where people's priorities are. They're not total morons; it must be an interesting reason why these circumstances happen. It's not hard to solve these problems with money - so there has to be a neat (if utterly dysfunctional) story behind it. Seriously, guys. Spend $20 on a flu shot for your golden goose.

rsanders 13y ago
I couldn't agree with this more. It's human nature not to prepare for a theoretical risk. But once it's happened to you, and to many others in the same industry, it's just foolishness not to invest in prevention. I imagine there's also a bit of outsider-preference going on here. There's no lack of people who could have been hired to implement controls and audits that would have easily caught a slow leak of coins, but they're part of the Obsolete Fiat Economy and thus irrelevant. "Dunning-Krugerrands", indeed.
- sneak 13y ago
  I don't think your (or their) equating "competent programmers and businesspeople with common sense" with "obsolete fiat economy" is what happened - it's not really a meaningful logical jump. There's got to be something else.
- mtkd 13y ago
  > It's human nature not to prepare for a theoretical risk That's a substantial generalisation. Some people, especially in software engineering, spend a great deal of their day thinking how best to prepare for theoretical risk.
  - rsanders 13y ago

3rd3 13y ago

How much did you lose on it?

Udo 13y ago
Enough to feel uncomfortable telling people the amount ;)
- kyberias 13y ago
  Bro-hug. :) Seriously.

sillysaurus3 13y ago

It's not even as simple as a failure to communicate. It's hard not to conclude that they outright lied. First it was malleability, then it was "we're waiting on bitcoin developers," then it was "we've moved due to protesters and security problems," and now it's "we've closed our site due to recent news reports." I wonder when precisely they realized that >700,000btc were missing.

GigabyteCoin 13y ago
If I'm not mistaken, mtgox has not publicly stated that >700k BTC are indeed missing.
- waterlesscloud 13y ago
  I think it's extremely unlikely the total missing coins is anywhere near that number. Extremely.
pliny 13y ago
>I wonder when precisely they realized that >700,000btc were missing. Once they stole the 700,001st bitcoin?
fnordfnordfnord 13y ago
I have a speculation: This has been an ongoing issue for some time now. Kerpeles was hoping to solve the problem before it became known widely, and if lucky be able to continue operation as a fractional reserve (unbeknownst to MtGox clients). We could be really charitable to him and assume that he intended to eventually repay the missing BTC from the proceeds of MtGox. At some point, that became an impossibility, but Kerpeles clung to the belief that he could rectify the situation. Kerpeles didn't communicate succinctly with people outside his organization because that would risk alerting outsiders to the extent of the problem and cause a "run on the bank". >I wonder when precisely they realized that >700,000btc were missing. Stating the obvious, but it didn't occur all at once. If my speculation bears any resemblance to reality, it would be interesting to know when MtGox' solvency tipped past any chance of recovery, and how long Kerpeles has known that to be the case. I'm thinking that a year or more may have passed.

ig1 13y ago

If they're under investigation by a regulator or a criminal prosector they may be severely legally restricted as to what they can say publicly.

BlackDeath3 13y ago

OK... ... ... I shrunk it.

enscr 13y ago

There was a comment on some forum about a guy who interviewed with them for a job & learnt that they don't have a testing environment. They just push changes to the production code & see how it goes. In my opinion, they were asking for it. Edit : Here's the link : http://www.reddit.com/r/Bitcoin/comments/1x9gue/my_protest_at_mtgox_offices_5_to_7th_february/cf9dgei http://www.reddit.com/r/Bitcoin/comments/1x9gue/my_protest_a...