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They also mentioned buying back at low prices in one of those leaked documents. What I don't understand is why people would continue selling at any reasonable

by dcosson 13y ago

They also mentioned buying back at low prices in one of those leaked documents. What I don't understand is why people would continue selling at any reasonable volumes at firesale prices when other exchanges are doing "fine" (Bitstamp down ~25% vs 2 months ago). Unless I misunderstand it, the malleability bug won't prevent sending btc to other wallets. Is mtgox going to block their users from sending btc and only allow them to sell internally? That would be pretty much equivalent to seizing all their users' coins. Is it just the combination of lots people who own small enough amounts of btc not to care going "fuck it, I just want out"? People not trusting other exchanges after this, or betting that other exchanges will crash too before they can get accounts verified at them and sell their coins?

jcampbell1 13y ago
Presumably when Mt Gox's bank accounts get seized, whatever money in them will be used to pay off accounts with real currency balances. The people holding bitcoins will get nothing.
- JackFr 13y ago
  That brings up a point of confusion for me. As understand the news, Mt Gox didn't lose a single dollar. They lost 700K BTC. It is neither being pedantic, nor beside the point that this is not the same as $400M. It is the point.
  - pmorici 13y ago
    That's not entirely true, about $5 million was seized by and is currently being held by the US government and another $5 million is being held hostage by CoinLab a US company that once had a deal with Gox to handle US customers but things went south along the way and they are not being sued by them instead. So about $10 million is tied up in less than ideal situations.
  - ianferrel 13y ago
    If the leaked crisis plan memo is correct, then they had ~$50 million in dollars on account with them, and total cash assets around $22 million. So, even ignoring the Bitcoin, they lost quite a lot of dollars.
- dragonwriter 13y ago
  > Presumably when Mt Gox's bank accounts get seized, whatever money in them will be used to pay off accounts with real currency balances. Weren't a number of Mt. Gox's bank accounts already seized for other reasons? Before the loss of bitcoins issue, wasn't this already a source of concerns about Gox's viability?
negamax 13y ago
That's exactly what happened. No coins were allowed to be withdrawn from MtGox. That's why people panicked and sold at firesale.
- dcosson 13y ago
  Ah ok, thanks for clarifying. I had assumed the freeze starting a few days ago applied to trades as well but clearly not.
  - negamax 13y ago
    Actually, broader reason was that people concluded that MtGox have lost all the coins. And will be insolvent. In that event, it be easier to sue them for cash instead of coins.
pbhjpbhj 13y ago
>What I don't understand is why people would continue selling at any reasonable volumes at firesale prices when other exchanges are doing "fine" (Bitstamp down ~25% vs 2 months ago). // That's only relevant if you can move your bitcoins to a different exchange. If your bitcoins are held with MTGOX and you're able to run a transaction that extracts any value then that's better than the potential case in which MTGOX simply declare all bitcoins have gone and close all accounts. I posted this idea a few weeks ago (IIRC) - basically if MTGOX could crash the price then they could buy the bitcoins at a lower price; make an announcement that they're now fine, rebound the price and then afford to cover losses and possibly make a profit too. It strikes me that's not moral, though some may consider it so, but it's probably not illegal to manipulate "toy" currencies. In the financial sector it seems it's only really considered wrong to fix real ones if you get caught.
umanwizard 13y ago
I think you do misunderstand it -- no one has been able to transfer bitcoin out of MtGox for weeks now.

by dcosson 13y ago

jcampbell1 13y ago

Presumably when Mt Gox's bank accounts get seized, whatever money in them will be used to pay off accounts with real currency balances. The people holding bitcoins will get nothing.

JackFr 13y ago
That brings up a point of confusion for me. As understand the news, Mt Gox didn't lose a single dollar. They lost 700K BTC. It is neither being pedantic, nor beside the point that this is not the same as $400M. It is the point.
- pmorici 13y ago
  That's not entirely true, about $5 million was seized by and is currently being held by the US government and another $5 million is being held hostage by CoinLab a US company that once had a deal with Gox to handle US customers but things went south along the way and they are not being sued by them instead. So about $10 million is tied up in less than ideal situations.
- ianferrel 13y ago
  If the leaked crisis plan memo is correct, then they had ~$50 million in dollars on account with them, and total cash assets around $22 million. So, even ignoring the Bitcoin, they lost quite a lot of dollars.
dragonwriter 13y ago
> Presumably when Mt Gox's bank accounts get seized, whatever money in them will be used to pay off accounts with real currency balances. Weren't a number of Mt. Gox's bank accounts already seized for other reasons? Before the loss of bitcoins issue, wasn't this already a source of concerns about Gox's viability?

negamax 13y ago

That's exactly what happened. No coins were allowed to be withdrawn from MtGox. That's why people panicked and sold at firesale.

dcosson 13y ago
Ah ok, thanks for clarifying. I had assumed the freeze starting a few days ago applied to trades as well but clearly not.
- negamax 13y ago
  Actually, broader reason was that people concluded that MtGox have lost all the coins. And will be insolvent. In that event, it be easier to sue them for cash instead of coins.

pbhjpbhj 13y ago

>What I don't understand is why people would continue selling at any reasonable volumes at firesale prices when other exchanges are doing "fine" (Bitstamp down ~25% vs 2 months ago). // That's only relevant if you can move your bitcoins to a different exchange. If your bitcoins are held with MTGOX and you're able to run a transaction that extracts any value then that's better than the potential case in which MTGOX simply declare all bitcoins have gone and close all accounts. I posted this idea a few weeks ago (IIRC) - basically if MTGOX could crash the price then they could buy the bitcoins at a lower price; make an announcement that they're now fine, rebound the price and then afford to cover losses and possibly make a profit too. It strikes me that's not moral, though some may consider it so, but it's probably not illegal to manipulate "toy" currencies. In the financial sector it seems it's only really considered wrong to fix real ones if you get caught.

umanwizard 13y ago

I think you do misunderstand it -- no one has been able to transfer bitcoin out of MtGox for weeks now.