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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

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.

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.