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Mt. Gox has posted a new update

116 points by sillysaurus3 13y ago

bowmessage 13y ago
I wish they could just put themselves back online with the ~60% of users' bitcoins that they still have and just let us all withdraw them. Let us fight in court over the remaining 40%, right?
- ars 13y ago
  They don't want to. They want to keep operating and slowly repay those 40% by transaction profits, and then continue operating after that as a profitable company. They are crazy to think it will work. But that's what they want.
  - makomk 13y ago
    Based on their own, incredibly optimistic, financial forecasts that were leaked earlier it'd take at least a decade for them to repay just the current USD value of what they've lost. I'm not sure it'd even be feasible for them to repay bitcoin for bitcoin, since their financial predictions quite likely rely on Bitcoin shooting up in value.
- pmorici 13y ago
  How do you figure they have 60% of the Bitcoins still? Everything I've read has said they only have about 2000 BTC left and they should have 750,000.
- dustcoin 13y ago
  They don't have 60% of their customers' bitcoins. They (allegedly) have 0.2% (2k out of 750k) of their customers' bitcoins, and 60% of their USD/EUR/JPY.
  - bowmessage 13y ago
    Ah, I didn't realize the units on their assets v liabilities reporting weren't bitcoins. Damn, thanks for pointing that out.
  - Aqueous 13y ago
    I really do not understand how the transaction malleability bug could have lost 40% of their fiat deposits. Certainly they are not telling the truth about the transaction malleability. They have now dug their feet in on that explanation but it does not make sense given what we know about transaction malleability (the kind they are talking could not possibly have cause 850,000 bitcoins to disappear from allegedly cold storage without them noticing, and probably not without some social engineering.) It seems likely that if the bug was involved somehow, it was because an intruder performed an attack from inside Gox . How else would they also be able to get fiat deposits out of Mt. Gox? Wouldnt that require initiating bank transfers?
    - nwh 13y ago
      It's basically impossible. There's 200BTC a day withdraw limits (or rather, was), for this to have worked somebody would have needed to be withdrawing the limit from 5 different accounts, every day for the last 3 years and successfully manipulating the bug in Gox's system every single time. This couldn't even have worked reliably, as the consistent Gox bug was only triggered by 0.8.0 being released. It doesn't make sense as an explanation, especially given that we now know that some Russian clowns also had database access.
      - nullc 13y ago
        > There's 200BTC a day withdraw limits If you had a verified account you could ask for any limit you wanted up to 10k BTC, with a trusted account I think there was no maximum— I've talked to people who say they had 50k limits. There was a 200 BTC maximum per withdraw however, at least in recent times. > as the consistent Gox bug was only triggered by 0.8.0 being released Even that wasn't consistent, only ~1% of signatures were invalid DER encodings with their code.
        nwh 13y ago
        > If you had a verified account you could ask for any limit you wanted up to 10k BTC, with a trusted account I think there was no maximum— I've talked to people who say they had 50k limits. Wsn't aware of that, I only ever saw 200BTC being mentioned. Did Mt Gox seriously keep 10,000BTC+ in their hot wallet for this to work, or were manual withdraws like a bank where you make a cash request for the next day?
- alkimie2 13y ago
  The announcement was silent on the BTC they still retain. I can't find any direct statements by anyone at Gox that all they have left is 2K. I'd be very grateful if someone could point it out if it exists.
  - gst 13y ago
    The 2K BTC were mentioned on the leaked MtGox documents which were published one week ago or so. Given that many facts in those documents match with information that was published later on, it appears that those documents could be authentic. See http://two-bit-idiot.tumblr.com/post/77988833128/the-final-goxing http://two-bit-idiot.tumblr.com/post/77988833128/the-final-g... for a link to the document and for more information.
- buro9 13y ago
  This is equivalent to suggesting that the best course of action with a business that has gone bankrupt is to allow itself to be looted by some of its' customers. Rather than attempting to rebuild value to return a higher proportion of cash/goods to all customers, or paying debtors according to contractual priority. I think you're unlikely to get your wish.
  - waterlesscloud 13y ago
    Not if you capped withdrawals at 60% of your balance.
    - jobigoud 13y ago
      But how do you know whether the issues that caused the debacle are fixed or not? At that point it appears unclear that anyone knows the full details of the issues, including the MtGox team. Reopennig now might be risky.
    - PeterisP 13y ago
      You'd need to know if it's really 60% and not, say, 59%; and you can't know that until the assets are actually liquidated - you can estimate the value of your stuff/buildings/whatever, but you'll know for sure only when they are actually sold.
- PeterisP 13y ago
  If having 60% of users Bitcoins were true, then doing what you propose would be a crime, and make the company officers personally liable to the customers who don't get their money. As soon as the company knows it has 60% of the needed funds, then it is required to not allow anyone to withdraw their money. Instead, the insolvency process tries to treat everyone equally, so that they would pay out everybody 60% of their share, instead of some people getting all their money and some losing everything. It is not optional, and not a choice that the company is allowed to make - they can affect the process on how exactly that happens (i.e., liquidating, restructuring as a running business, etc), but they can't simply pay out money to arbitrary debtors, that would open up many trivial ways of looting all the remaining money by insiders.
  - roel_v 13y ago
    "Instead, the insolvency process tries to treat everyone equally, so that they would pay out everybody 60% of their share, instead of some people getting all their money and some losing everything." No, there are a number of parties that get their money first, like the liquidator, the tax man, privileged creditors, etc. Which usually means that the concurrent creditors should be happy to get a few percent of their claims (the average here in the Netherlands is 3%). Not disagreeing with your point, in fact reinforcing it - the proposal of the GP is preposterous under the law, and a flagrant violation of bankruptcy law across the world.
    - t0mas88 13y ago
      "(the average here in the Netherlands is 3%)" Only if you include the large number of (very) small businesses that fail, because most of those still have a substantial sum to pay to taxes, usually already-withheld income taxes and VAT. For a case the size of Mt.Gox the average is higher. Remember DSB Bank? They even got above 100%, just took a long time to sort it all out.
  - jameshart 13y ago
    That's predicated on the assumption that, from the point of view of the bankruptcy proceedings, the bitcoins are actually an asset considered in the bankruptcy - and more importantly that "being owed bitcoins" ranks you somewhere on the list of creditors. It's perfectly possible that the bankruptcy process would prioritize making people with real currency claims whole; if that means 'liquidating' bitcoin assets to turn them into dollars to pay back banks, liquidators, and other hard currency creditors, then that's what would happen.
ekianjo 13y ago
No real new information here but they now clearly claim that the 750 000 bitcoins owned by users have been lost due to the malleability issue, but that an investigation is under way.
- DerpDerpDerp 13y ago
  I don't think anyone believes that 750,000 bitcoins were involved in malleability, nor that somehow they lost 2+billion yen to "hackers" at the same time.
- smtddr 13y ago
  There is new information. This tells me that MtGox is truly sticking to their LIE that 750k+ of bitcoins disappeared due to "tx-malley"; nonsense. I'm trusting my gut feeling on this one; mtgox was in trouble months before this txmalley thing hit them.
devindotcom 13y ago
"In order to increase repayments to our creditors, it is necessary to explore the possibility of having MtGox Co., Ltd. continue its business." Uh, no. I formally advise against this course of action as "hilarious." Who on god's green earth is going to bank their coins in MtGox 2.0?
- ekianjo 13y ago
  If they shut down completely you may as well say goodbye to all the assets you had with them.
  - danielweber 13y ago
    No, shut down completely, now, and the creditors have a chance of partial recovery. Keep on trying to make this a viable business and they will burn through more and more of their assets paying lawyers, accountants, consultants, directors, and managers. If you are one of those latter group, I see why this would be valuable to you. Creditors who are in stage 1 (denial) or stage 3 (bargaining) may still be trying to recreate this as a viable business, but it's like trying to make up for your losses at the roulette table by making bigger and bigger bets.
- dustcoin 13y ago
  I would, if it had completely new management and new software. MtGox's only valuable asset is their huge number of KYC verified customers.
- gst 13y ago
  That would be MtGox 3.0. MtGox 1.0 got hacked in 2011 and users of MtGox 2.0 didn't seem to care.
  - devindotcom 13y ago
    Actually it would be MtGox 4.0 now that I think about it, since it used to be for trading Magic cards.
rdmcfee 13y ago
One thing is clear. There's a lot of information yet to come. They've indicated that it's "highly probably" the coins were lots due to the TX Mal bug which seems to be the least likely hypothesis in the eyes of the community. I suspect they're still analyzing their logs to find the full story themselves.
- joe_inferno 13y ago
  That's assuming they even did adequate logging
- sirsar 13y ago
  Turns out the blockchain makes a great log. The number of coins involved in malleable TXs does not add up to MtGox's loss.
laichzeit0 13y ago
So over a period of years your Scrooge McDuck money bin gets emptier and you are completely oblivious to this up until the point that it's basically empty? The kind of incompetence involved here borders on mental retardation.
- Cthulhu_ 13y ago
  But hey, unregulated trading / currency, amirite? Freedom!1one! Fuk da bankz11!1
  - Allower 13y ago
    Dude banks rip you off twice.. the second is when your government fucking bails them out.
    - bushido 13y ago
      The ignorance around TARP baffles me. Before I explain, let me state I am against bailouts in general. In the bailout $245B was given to private banks and $187B was given to fannie and freddie, money was also handed out to GM, insurance cos. etc. to a total amount of $610B. As of 2014, >$380B was returned in cash, >$235B was returned through dividends, the current "loss" to tax payers is approximately $12B. Which is expected to turn green very soon and generate substantial profits for "we the people". Most large banks refunded the govt. with substantial profits, so did the insurance cos. The TARP also saved a ton of jobs.
      - skyebook 13y ago
        Yes. This. The fact that Cheney went out and lobbied congress for this should say something about the dire nature of the situation
      - Consultant32452 13y ago
        The fact that those private banks did not have their shareholders wiped out completely and no one went to jail are the problems I have with TARP.
stevenh 13y ago
I'm troubled by the persistent societal trend of people being afraid to reveal to others that they believe a malicious event was an inside job. I suspect many of us consider it possible that the heist was organized by Mark Karpeles himself and that the supposed transaction malleability crisis was completely fabricated.
- nwh 13y ago
  He was making millions of dollars from trading fees and would have continued to do so for the foreseeable future. Why would he steal his own funds. It just defies any reasonable explanation.
  - vnchr 13y ago
    "Millions of dollars isn't cool. You know what's cool? Hundreds of millions of dollars." Awful paraphrasing but the upside potential of them stealing their customers' coins should not be dismissed so easily.
    - pbhjpbhj 13y ago
      It's millions of dollars and freedom vs. 100s of millions that get confiscated when you're incarcerated though (and yes that's a false dichotomy - but it's a bug in logic, it's not my fault ..). I'd have thought that being in control of these exchanges you could pretty much extract as much money as you'd ever need by front-running or other manipulations. The fluctuations in market value coupled with the acceptance of week or 2-week transaction periods means you can get a few percent of each transaction doesn't it.
  - at-fates-hands 13y ago
    Simple greed. AS you pointed out, it makes no sense, which gives him the perfect cover. He can empty the coffers and claim it was a hack because of a technical glitch. He takes it all, declares bankruptcy and he's gone with the wind. Now, with a hefty stash, he can start another BTC exchange, and then rinse and repeat as necessary. It's about as close to a perfect crime as you can get.
wsh91 13y ago
What's with the query string?
- mbreese 13y ago
  It's probably just a HN hack to get a new post out of an existing URL.
- eatfish 13y ago
  That's the hack. It probably transfers more bitcoins somewhere.
beaker52 13y ago
'Disappeared'. I'd love to see an accountant claim that all their profit 'Disappeared' because of a bug in their accounting software.
- psykovsky 13y ago
  LOL. It's Bitcoin. BTC doesn't disappear. It MUST be in the blockchain.
  - pjc50 13y ago
    It's entirely possible for BTC to be in the blockchain but sent to an unspendable address, i.e. "lost forever"
    - psykovsky 13y ago
      It's still there. It didn't disappear.
      - Consultant32452 13y ago
        If I delete my wallet and all the backups, it might still be in the blockchain but it's effectively gone forever because it can never be spent.
    - danielweber 13y ago
      People have tracked the addresses where an entity (very likely to be MtGox) transferred funds to prove that they had lots of bitcoins, and they haven't been moved from that address since then.
      - FireBeyond 13y ago
        If insider “malfeasance” is the true cause, it just boils down to “who is more patient, those who have lost some funds, or the guy sitting on 700,000 BTC and just needs to wait for this to blow over”?
maccard 13y ago
How do they not notice almost 3 billion yen missing? That's almost 30 million dollars if I'm not mistaken.
Geee 13y ago
Well, if the Russian hackers got to the server, I bet there has been many before them. I'm pretty sure someone just messed with their database, and added funds to their account. Maybe added fiat, and bought BTC (users could withdraw BTC without identity verification?) because for some reason they couldn't add BTC directly (this would explain increased fiat in the system).
skywhopper 13y ago
Don't miss that they're also short 2.8 billion Yen in their bank accounts in addition to the 800,000+ Bitcoins they lost.
jfasi 13y ago
> At the start of February 2014, illegal access through the abuse of a bug in the bitcoin system resulted in an increase in incomplete bitcoin transfer transactions and we discovered that there was a possibility that bitcoins had been illicitly moved through the abuse of this bug. ... > We believe that there is a high probability that these bitcoins were stolen as a result of an abuse of this bug I find the insistence that this catastrophe was brought on by a protocol bug very suspicious. A recent post on HN by an expert elaborated on why transaction malleability wasn't likely to have been the source of this exploit [1]. Meanwhile Mt. Gox is insisting that they were robbed by a bug in the protocol. This could be the position advised by Mt. Gox's legal representation, in a sort of "that's my story and I'm sticking to it" sort of way. If this line is actually true, then either the transaction malleability issue is much much bigger than we anticipated, or the bitcoin protocol has some vulnerability that we don't know about. That's scarier than a paltry exchange collapse. [1] http://hackingdistributed.com/2014/03/01/what-did-not-happen-at-mtgox/ http://hackingdistributed.com/2014/03/01/what-did-not-happen...
- brokentone 13y ago
  You're looking for this post: https://news.ycombinator.com/item?id=7329540 https://news.ycombinator.com/item?id=7329540
- corresation 13y ago
  I assume you mean http://hackingdistributed.com/2014/03/01/what-did-not-happen-at-mtgox/ http://hackingdistributed.com/2014/03/01/what-did-not-happen..., however I would hardly attribute that to "an expert". It is raw speculation, and states absolutes where there are none.
  - jfasi 13y ago
    Thanks for the link! I've updated my comment. True, this post contains speculation on some matters, but if a professor at Cornell whose work focuses around distributed systems who authored the selfish mining attack isn't an "expert," then I don't know who is.
Havoc 13y ago
>The increase of current liabilities may be linked to a loss of bitcoins and customer funds. Perhaps they do accounting differently in Japan but surely a loss of bitcoins would result in a reduction of assets not an increase in liabilities?
- hayksaakian 13y ago
  they seem to account for BTC in terms the dollar amount and as a future debt to potential withdrawals
unclebucknasty 13y ago
The fact that they are missing fiat (JPY) from a bank account(s) seems to scream that this was, at least partially, an inside job. That could also explain why they are so eerily silent and not forthcoming. That is, either they are hiding something or earnestly investigating and don't want to tip off the insider(s) in question.
Anon9238 13y ago
I had over 6k USD on MtGox that I got from selling 40 BTC. Was going to buy back bitcoins for the money if it ever became low enough. Just saw today that they had shut down. Now I can't access my account. Is there any chance in hell I will get my money back? Where do I turn? It's just silly to only post a Japanese message on the site.
Anon9238 13y ago
I just called the telephone service MtGox have (+81 3-4588-3922 ) and the only info I could get out of the Japanese girl was that all account informations are intact and it will be possible to log in on the website later some day. She was speaking a lot about stuff going on in court right now that has to finish, but nobody knows how long it can take. Called for about 5 minutes. Queue wait time was short, below 30 seconds.

116 points by sillysaurus3 13y ago

I wish they could just put themselves back online with the ~60% of users' bitcoins that they still have and just let us all withdraw them. Let us fight in court over the remaining 40%, right?

ars 13y ago
They don't want to. They want to keep operating and slowly repay those 40% by transaction profits, and then continue operating after that as a profitable company. They are crazy to think it will work. But that's what they want.
- makomk 13y ago
  Based on their own, incredibly optimistic, financial forecasts that were leaked earlier it'd take at least a decade for them to repay just the current USD value of what they've lost. I'm not sure it'd even be feasible for them to repay bitcoin for bitcoin, since their financial predictions quite likely rely on Bitcoin shooting up in value.
pmorici 13y ago
How do you figure they have 60% of the Bitcoins still? Everything I've read has said they only have about 2000 BTC left and they should have 750,000.
dustcoin 13y ago
They don't have 60% of their customers' bitcoins. They (allegedly) have 0.2% (2k out of 750k) of their customers' bitcoins, and 60% of their USD/EUR/JPY.
- bowmessage 13y ago
  Ah, I didn't realize the units on their assets v liabilities reporting weren't bitcoins. Damn, thanks for pointing that out.
- Aqueous 13y ago
  I really do not understand how the transaction malleability bug could have lost 40% of their fiat deposits. Certainly they are not telling the truth about the transaction malleability. They have now dug their feet in on that explanation but it does not make sense given what we know about transaction malleability (the kind they are talking could not possibly have cause 850,000 bitcoins to disappear from allegedly cold storage without them noticing, and probably not without some social engineering.) It seems likely that if the bug was involved somehow, it was because an intruder performed an attack from inside Gox . How else would they also be able to get fiat deposits out of Mt. Gox? Wouldnt that require initiating bank transfers?
  - nwh 13y ago
    It's basically impossible. There's 200BTC a day withdraw limits (or rather, was), for this to have worked somebody would have needed to be withdrawing the limit from 5 different accounts, every day for the last 3 years and successfully manipulating the bug in Gox's system every single time. This couldn't even have worked reliably, as the consistent Gox bug was only triggered by 0.8.0 being released. It doesn't make sense as an explanation, especially given that we now know that some Russian clowns also had database access.
    - nullc 13y ago
      > There's 200BTC a day withdraw limits If you had a verified account you could ask for any limit you wanted up to 10k BTC, with a trusted account I think there was no maximum— I've talked to people who say they had 50k limits. There was a 200 BTC maximum per withdraw however, at least in recent times. > as the consistent Gox bug was only triggered by 0.8.0 being released Even that wasn't consistent, only ~1% of signatures were invalid DER encodings with their code.
      - nwh 13y ago
        > If you had a verified account you could ask for any limit you wanted up to 10k BTC, with a trusted account I think there was no maximum— I've talked to people who say they had 50k limits. Wsn't aware of that, I only ever saw 200BTC being mentioned. Did Mt Gox seriously keep 10,000BTC+ in their hot wallet for this to work, or were manual withdraws like a bank where you make a cash request for the next day?
alkimie2 13y ago
The announcement was silent on the BTC they still retain. I can't find any direct statements by anyone at Gox that all they have left is 2K. I'd be very grateful if someone could point it out if it exists.
- gst 13y ago
  The 2K BTC were mentioned on the leaked MtGox documents which were published one week ago or so. Given that many facts in those documents match with information that was published later on, it appears that those documents could be authentic. See http://two-bit-idiot.tumblr.com/post/77988833128/the-final-goxing http://two-bit-idiot.tumblr.com/post/77988833128/the-final-g... for a link to the document and for more information.
buro9 13y ago
This is equivalent to suggesting that the best course of action with a business that has gone bankrupt is to allow itself to be looted by some of its' customers. Rather than attempting to rebuild value to return a higher proportion of cash/goods to all customers, or paying debtors according to contractual priority. I think you're unlikely to get your wish.
- waterlesscloud 13y ago
  Not if you capped withdrawals at 60% of your balance.
  - jobigoud 13y ago
    But how do you know whether the issues that caused the debacle are fixed or not? At that point it appears unclear that anyone knows the full details of the issues, including the MtGox team. Reopennig now might be risky.
  - PeterisP 13y ago
    You'd need to know if it's really 60% and not, say, 59%; and you can't know that until the assets are actually liquidated - you can estimate the value of your stuff/buildings/whatever, but you'll know for sure only when they are actually sold.
PeterisP 13y ago
If having 60% of users Bitcoins were true, then doing what you propose would be a crime, and make the company officers personally liable to the customers who don't get their money. As soon as the company knows it has 60% of the needed funds, then it is required to not allow anyone to withdraw their money. Instead, the insolvency process tries to treat everyone equally, so that they would pay out everybody 60% of their share, instead of some people getting all their money and some losing everything. It is not optional, and not a choice that the company is allowed to make - they can affect the process on how exactly that happens (i.e., liquidating, restructuring as a running business, etc), but they can't simply pay out money to arbitrary debtors, that would open up many trivial ways of looting all the remaining money by insiders.
- roel_v 13y ago
  "Instead, the insolvency process tries to treat everyone equally, so that they would pay out everybody 60% of their share, instead of some people getting all their money and some losing everything." No, there are a number of parties that get their money first, like the liquidator, the tax man, privileged creditors, etc. Which usually means that the concurrent creditors should be happy to get a few percent of their claims (the average here in the Netherlands is 3%). Not disagreeing with your point, in fact reinforcing it - the proposal of the GP is preposterous under the law, and a flagrant violation of bankruptcy law across the world.
  - t0mas88 13y ago
    "(the average here in the Netherlands is 3%)" Only if you include the large number of (very) small businesses that fail, because most of those still have a substantial sum to pay to taxes, usually already-withheld income taxes and VAT. For a case the size of Mt.Gox the average is higher. Remember DSB Bank? They even got above 100%, just took a long time to sort it all out.
- jameshart 13y ago
  That's predicated on the assumption that, from the point of view of the bankruptcy proceedings, the bitcoins are actually an asset considered in the bankruptcy - and more importantly that "being owed bitcoins" ranks you somewhere on the list of creditors. It's perfectly possible that the bankruptcy process would prioritize making people with real currency claims whole; if that means 'liquidating' bitcoin assets to turn them into dollars to pay back banks, liquidators, and other hard currency creditors, then that's what would happen.

ekianjo 13y ago

No real new information here but they now clearly claim that the 750 000 bitcoins owned by users have been lost due to the malleability issue, but that an investigation is under way.

DerpDerpDerp 13y ago
I don't think anyone believes that 750,000 bitcoins were involved in malleability, nor that somehow they lost 2+billion yen to "hackers" at the same time.
smtddr 13y ago
There is new information. This tells me that MtGox is truly sticking to their LIE that 750k+ of bitcoins disappeared due to "tx-malley"; nonsense. I'm trusting my gut feeling on this one; mtgox was in trouble months before this txmalley thing hit them.

devindotcom 13y ago

"In order to increase repayments to our creditors, it is necessary to explore the possibility of having MtGox Co., Ltd. continue its business." Uh, no. I formally advise against this course of action as "hilarious." Who on god's green earth is going to bank their coins in MtGox 2.0?

ekianjo 13y ago
If they shut down completely you may as well say goodbye to all the assets you had with them.
- danielweber 13y ago
  No, shut down completely, now, and the creditors have a chance of partial recovery. Keep on trying to make this a viable business and they will burn through more and more of their assets paying lawyers, accountants, consultants, directors, and managers. If you are one of those latter group, I see why this would be valuable to you. Creditors who are in stage 1 (denial) or stage 3 (bargaining) may still be trying to recreate this as a viable business, but it's like trying to make up for your losses at the roulette table by making bigger and bigger bets.
dustcoin 13y ago
I would, if it had completely new management and new software. MtGox's only valuable asset is their huge number of KYC verified customers.
gst 13y ago
That would be MtGox 3.0. MtGox 1.0 got hacked in 2011 and users of MtGox 2.0 didn't seem to care.
- devindotcom 13y ago
  Actually it would be MtGox 4.0 now that I think about it, since it used to be for trading Magic cards.

rdmcfee 13y ago

One thing is clear. There's a lot of information yet to come. They've indicated that it's "highly probably" the coins were lots due to the TX Mal bug which seems to be the least likely hypothesis in the eyes of the community. I suspect they're still analyzing their logs to find the full story themselves.

joe_inferno 13y ago
That's assuming they even did adequate logging
sirsar 13y ago
Turns out the blockchain makes a great log. The number of coins involved in malleable TXs does not add up to MtGox's loss.

laichzeit0 13y ago

So over a period of years your Scrooge McDuck money bin gets emptier and you are completely oblivious to this up until the point that it's basically empty? The kind of incompetence involved here borders on mental retardation.

Cthulhu_ 13y ago
But hey, unregulated trading / currency, amirite? Freedom!1one! Fuk da bankz11!1
- Allower 13y ago
  Dude banks rip you off twice.. the second is when your government fucking bails them out.
  - bushido 13y ago
    The ignorance around TARP baffles me. Before I explain, let me state I am against bailouts in general. In the bailout $245B was given to private banks and $187B was given to fannie and freddie, money was also handed out to GM, insurance cos. etc. to a total amount of $610B. As of 2014, >$380B was returned in cash, >$235B was returned through dividends, the current "loss" to tax payers is approximately $12B. Which is expected to turn green very soon and generate substantial profits for "we the people". Most large banks refunded the govt. with substantial profits, so did the insurance cos. The TARP also saved a ton of jobs.
    - skyebook 13y ago
      Yes. This. The fact that Cheney went out and lobbied congress for this should say something about the dire nature of the situation
    - Consultant32452 13y ago
      The fact that those private banks did not have their shareholders wiped out completely and no one went to jail are the problems I have with TARP.

stevenh 13y ago

I'm troubled by the persistent societal trend of people being afraid to reveal to others that they believe a malicious event was an inside job. I suspect many of us consider it possible that the heist was organized by Mark Karpeles himself and that the supposed transaction malleability crisis was completely fabricated.

nwh 13y ago
He was making millions of dollars from trading fees and would have continued to do so for the foreseeable future. Why would he steal his own funds. It just defies any reasonable explanation.
- vnchr 13y ago
  "Millions of dollars isn't cool. You know what's cool? Hundreds of millions of dollars." Awful paraphrasing but the upside potential of them stealing their customers' coins should not be dismissed so easily.
  - pbhjpbhj 13y ago
    It's millions of dollars and freedom vs. 100s of millions that get confiscated when you're incarcerated though (and yes that's a false dichotomy - but it's a bug in logic, it's not my fault ..). I'd have thought that being in control of these exchanges you could pretty much extract as much money as you'd ever need by front-running or other manipulations. The fluctuations in market value coupled with the acceptance of week or 2-week transaction periods means you can get a few percent of each transaction doesn't it.
- at-fates-hands 13y ago
  Simple greed. AS you pointed out, it makes no sense, which gives him the perfect cover. He can empty the coffers and claim it was a hack because of a technical glitch. He takes it all, declares bankruptcy and he's gone with the wind. Now, with a hefty stash, he can start another BTC exchange, and then rinse and repeat as necessary. It's about as close to a perfect crime as you can get.

wsh91 13y ago

What's with the query string?

mbreese 13y ago
It's probably just a HN hack to get a new post out of an existing URL.
eatfish 13y ago
That's the hack. It probably transfers more bitcoins somewhere.

beaker52 13y ago

'Disappeared'. I'd love to see an accountant claim that all their profit 'Disappeared' because of a bug in their accounting software.

psykovsky 13y ago
LOL. It's Bitcoin. BTC doesn't disappear. It MUST be in the blockchain.
- pjc50 13y ago
  It's entirely possible for BTC to be in the blockchain but sent to an unspendable address, i.e. "lost forever"
  - psykovsky 13y ago
    It's still there. It didn't disappear.
    - Consultant32452 13y ago
      If I delete my wallet and all the backups, it might still be in the blockchain but it's effectively gone forever because it can never be spent.
  - danielweber 13y ago
    People have tracked the addresses where an entity (very likely to be MtGox) transferred funds to prove that they had lots of bitcoins, and they haven't been moved from that address since then.
    - FireBeyond 13y ago
      If insider “malfeasance” is the true cause, it just boils down to “who is more patient, those who have lost some funds, or the guy sitting on 700,000 BTC and just needs to wait for this to blow over”?

maccard 13y ago

How do they not notice almost 3 billion yen missing? That's almost 30 million dollars if I'm not mistaken.

Geee 13y ago

Well, if the Russian hackers got to the server, I bet there has been many before them. I'm pretty sure someone just messed with their database, and added funds to their account. Maybe added fiat, and bought BTC (users could withdraw BTC without identity verification?) because for some reason they couldn't add BTC directly (this would explain increased fiat in the system).

skywhopper 13y ago

Don't miss that they're also short 2.8 billion Yen in their bank accounts in addition to the 800,000+ Bitcoins they lost.

jfasi 13y ago

> At the start of February 2014, illegal access through the abuse of a bug in the bitcoin system resulted in an increase in incomplete bitcoin transfer transactions and we discovered that there was a possibility that bitcoins had been illicitly moved through the abuse of this bug. ... > We believe that there is a high probability that these bitcoins were stolen as a result of an abuse of this bug I find the insistence that this catastrophe was brought on by a protocol bug very suspicious. A recent post on HN by an expert elaborated on why transaction malleability wasn't likely to have been the source of this exploit [1]. Meanwhile Mt. Gox is insisting that they were robbed by a bug in the protocol. This could be the position advised by Mt. Gox's legal representation, in a sort of "that's my story and I'm sticking to it" sort of way. If this line is actually true, then either the transaction malleability issue is much much bigger than we anticipated, or the bitcoin protocol has some vulnerability that we don't know about. That's scarier than a paltry exchange collapse. [1] http://hackingdistributed.com/2014/03/01/what-did-not-happen-at-mtgox/ http://hackingdistributed.com/2014/03/01/what-did-not-happen...

brokentone 13y ago
You're looking for this post: https://news.ycombinator.com/item?id=7329540 https://news.ycombinator.com/item?id=7329540
corresation 13y ago
I assume you mean http://hackingdistributed.com/2014/03/01/what-did-not-happen-at-mtgox/ http://hackingdistributed.com/2014/03/01/what-did-not-happen..., however I would hardly attribute that to "an expert". It is raw speculation, and states absolutes where there are none.
- jfasi 13y ago
  Thanks for the link! I've updated my comment. True, this post contains speculation on some matters, but if a professor at Cornell whose work focuses around distributed systems who authored the selfish mining attack isn't an "expert," then I don't know who is.

Havoc 13y ago

>The increase of current liabilities may be linked to a loss of bitcoins and customer funds. Perhaps they do accounting differently in Japan but surely a loss of bitcoins would result in a reduction of assets not an increase in liabilities?

hayksaakian 13y ago
they seem to account for BTC in terms the dollar amount and as a future debt to potential withdrawals

unclebucknasty 13y ago

The fact that they are missing fiat (JPY) from a bank account(s) seems to scream that this was, at least partially, an inside job. That could also explain why they are so eerily silent and not forthcoming. That is, either they are hiding something or earnestly investigating and don't want to tip off the insider(s) in question.

Anon9238 13y ago

I had over 6k USD on MtGox that I got from selling 40 BTC. Was going to buy back bitcoins for the money if it ever became low enough. Just saw today that they had shut down. Now I can't access my account. Is there any chance in hell I will get my money back? Where do I turn? It's just silly to only post a Japanese message on the site.

Anon9238 13y ago

I just called the telephone service MtGox have (+81 3-4588-3922 ) and the only info I could get out of the Japanese girl was that all account informations are intact and it will be possible to log in on the website later some day. She was speaking a lot about stuff going on in court right now that has to finish, but nobody knows how long it can take. Called for about 5 minutes. Queue wait time was short, below 30 seconds.