
MtGox.com is offline - cjbarber
https://www.mtgox.com/?dead
======
blhack
It's really easy in all of this to pile a bunch of hatred on Mark Karpeles,
but please, everybody remember that he is a human being, with real human
emotions, and that those things really do hurt.

\--

MtGox was (past tense is _probably_ appropriate here, but for the sake of
anybody who had coins there, I hope not) a startup that failed _spectacularly_
, and publicly, and took a TON of peoples' money with it.

The transaction malleability thing was poor programming on the part of gox.
Remember that we have ALL fucked up at some point, just luckily for most of
us, "fucking up" doesn't mean losing than much of other peoples' money.

Mark, I doubt you read hacker news, but if you do: it's alright, dude. You
bastard.

~~~
haberman
Yes, if I have any schadenfreude here it's not for him. It's for all of the
people who smugly told us for years that Bitcoin is superior to our "legacy"
fiat managed and regulated monetary system system in every way, and anyone who
can't see that is an idiot.

~~~
panarky
Don't equate Bitcoin the protocol with dodgy websites.

Unlike cash, radical transparency is entirely possible with Bitcoin.

Bitcoin the protocol is as strong as ever, but customers of other sites should
demand proof that their exchanges and online wallets actually control 100% of
the BTC they claim to have in their custody.

~~~
haberman
Yes, I think my schadenfreude is for you.

~~~
panarky
Were you that guy in 1989?

"My schadenfreude is for all of the people who smugly told us for years that
ARPANET is superior to our 'legacy' post office and ham radio in every way"

~~~
haberman
People in 1989 didn't exhibit a nearly religious devotion to ARPANET as
perfect in every way, going so far as to say things like "Bitcoin cannot fail,
it can only be failed" (do people realize how absurd this sounds?)

When every one of Bitcoin's characteristics (deflationary money supply,
irreversibility of transactions, completely public record) is touted as an
unmitigated advantage, it is irritating to those of us who see it as an
interesting idea and cool technology with both plusses and minuses.

ARPANET _isn 't_ superior to post offices in every way; for example you can't
send a package through ARPANET. And in fact one of the Internet's biggest
winners Amazon.com built its success largely on being really good at shipping.

~~~
BlackDeath3
I understand a certain irritation with a lot of "Bitcoiners", but don't let
contempt of Bitcoin extremists make you an anti-Bitcoin extremist.

~~~
mpyne
Where did you get "anti-Bitcoin _extremist_ " from any of what they wrote?

~~~
BlackDeath3
I didn't necessarily, it's just a precaution. I see a lot of vitriol directed
at Bitcoin, and this sort of extremist overcompensation is really nothing new
anyway. It's just a reminder to stay rational.

------
taspeotis
With credit to /r/bitcoin, I got a chuckle out of this one:

    
    
        Sorry, due to a major bug in the WWW protocol, our
        website is temporarily unavailable. Thank you for
        your patience while we await Al Gore's instruction!

~~~
jfoutz
Jokes like this make me crazy. Seriously HTTP is layer 7. Why would you bother
the former senator with anything above 4? tcp/ip is just fine. your buggy code
is what's broken, thank you very much.

~~~
ryanobjc
I believe the proper honorific is to reference the highest office, so it's the
Vice President Al Gore.

~~~
jfoutz
Ah, indeed. I always feel a little guilty about editing posts, so i'm going to
let it stand. This one especially, because it's such a reddit joke. But yes,
you are correct.

~~~
dfc
If you feel guilty just add an addendum:

EDIT: Use correct honorific

~~~
meowface
I bet you leave descriptive commit messages.

~~~
dfc
How is this related to my comment?

~~~
meowface
Your advice for specifying that he give an explanation for his edit generally
goes above what most people do when they edit posts.

So I am assuming you are probably someone who applies that same sensitibility
to writing descriptive commit messages, because similarly to people editing
Internet posts/comments without specifying what they changed, many people
leave very vague or meaningless commit messages.

~~~
dfc
Now I get it. I was not sure where you were going with this.

------
guelo
Pretty good Ponzi. Not as impressive as Bernie Maddof's, but extra points for
the tech angle.

~~~
jmomo
I am not aware of any indication that this was a ponzi scheme. Saying that it
was, without evidence, is misinformation.

The loss of coins was unintentional on the behalf of MtGox. It may have been
stupid that basic abc123 auditing would have probably revealed that there was
a problem months/years ago, but evil has not been shown at this point in time.

~~~
Klinky
An exchange that manipulates it's market to hide away losses and try to shore
up it's balances starts to look a lot like a ponzi scheme after awhile.

~~~
jamesaguilar
Only given an unacceptably broad interpretation of the word "Ponzi." Fraud is
the one you're looking for.

~~~
dragonwriter
Ponzi schemes are a form of fraud, sure, but the particular kind of fraud
under discussion shares the key features of a Ponzi scheme, since its
sustainable exactly as long as there is a sufficient net inflow of money from
the outside to cover the money being extracted by uncontrollable losses.

The only difference from a traditional Ponzi scheme is that in such a scheme
the extraction is to the fraudsters pockets, rather than to the fraudsters
incompetence.

~~~
gnaritas
> but the particular kind of fraud under discussion shares the key features of
> a Ponzi scheme

No it doesn't; the key feature of a Ponzi scheme is intentional fraud using a
phony investment that doesn't actually exit. That's what a Ponzi scheme is.

Bitcoin has nothing in common with a Ponzi scheme and all you people who keep
repeating this non-sense need to go educate yourselves on what a Ponzi scheme
actually is.

~~~
dragonwriter
> No it doesn't; the key feature of a Ponzi scheme is intentional fraud on a
> phone investment that doesn't actually exit.

Assuming the description of this as being a loss that, however unintended when
it first started occurring, was known, concealed, and papered over by using
other funds, it was an intentional fraud _from that point_ on a phony
investment that doesn't actually exist.

> Bitcoin has nothing in common with a Ponzi scheme

That may be true about Bitcoin, but not about the scenario proposed upthread
about what was going on at Mt. Gox. They aren't the same thing.

~~~
gnaritas
Again still wrong. Exchanges aren't investments; users aren't promised
returns, they in fact expect that the chance of loss is high.

Just because fraud occurs does not a Ponzi make. Seriously, just stop
repeating this complete nonsense. Ponzi schemes are very specific things and
neither the Gox situation nor Bitcoin are Ponzi's in any way.

~~~
dragonwriter
> Exchanges aren't investments; users aren't promised returns, they in fact
> expect that the chance of loss is high.

They expect the chance of _trading_ losses is high, they don't expect that the
loss of balances on account is high (in fact, they are generally promised
that, except for specified transaction fees, such accounts will retain their
value.)

There's a slight difference from what goes on in a traditional Ponzi scheme in
that the former promises a _positive_ return which is only met for as long as
external funds come in to cover the returns (plus the funds being extracted by
the fraudster) where the suggestion about Mt. Gox is that their Bitcoin
accounts were promising a _zero_ return, which could only be met for as long
as external funds were coming in to cover the BTC being stolen. Which isn't
strictly the same thing as a traditional Ponzi scheme, but is a very closely
related form of fraud.

Note that I'm not saying this _is_ what happened at Gox -- I have no way of
knowing that. But what has been _suggested_ is very much _like_ a Ponzi
scheme.

~~~
gnaritas
That's not a slight difference, that's a fundamental difference. Lacking a
promise of a positive return and lacking a fake investment opportunity, no
fraud can be classified as a Ponzi; it's simply fraud or theft. There's
absolutely nothing Ponzi like about this Gox situation; nothing. Ponzi's
require both of those elements, they are the definition of what a Ponzi is.

From Google:

Ponzi Scheme: a form of fraud in which belief in the success of a nonexistent
enterprise (the definition) _is fostered_ (i.e. the mechanism) by the payment
of quick returns to the first investors from money invested by later
investors.

Many valid things use the mechanism of new money paying out earlier investors;
that alone is meaningless and not a defining trait of Ponzi's. All insurance
also does this. A ponzi is literally "a form of fraud carried out by the
belief in the success of a nonexistent enterprise"; that's it.

~~~
Klinky
MtGox was usually advertising the highest exchange value for Bitcoins, and it
most recently was advertising fire sale level exchange rates on Bitcoins.

Once they severely restricted/shut off withdrawals, they were no longer an
"exchange". People were no longer investing in Bitcoins facilitated through an
exchange, they were investing in the exchange allowing withdrawals and making
good on the promised high Bitcoin to USD values or low USD to Bitcoin values.
All the time they were telling people it was a technical problem and they
would make good on transactions. Given how insolvent they were, this had
probably been going on for a significant amount of time or they just never had
intentions of making good. Allowing deposits to continue despite the issues
they faced was unscrupulous, and I believe it was likely a way for them to try
to collect capital to make good on the "top of the line" and "bottom of the
barrel" exchange rates that they had promised their customers, which they
simply could never fulfill.

~~~
gnaritas
Yes, fraud is likely, no one is disputing that. Fraud != Ponzi scheme.

~~~
Klinky
MtGox was not a normal exchange. The MtGox Bitcoin was essentially a separate
entity from a regular Bitcoin. The MtGox Bitcoin was offering higher than
normal rates of return. This encouraged investors to pump in new capital,
which was used to cover previous expenses MtGox had accrued. They then would
pick and choose who they would allow to cashout at a high rate of return to
keep the ruse going for an extended period of time, while making excuses to
others. This worked until the Ponzi scheme imploded. I know you don't like
that word for MtGox, but the fact that it may have been a legitimate exchange
at one point does not prevent it from turning into a Ponzi scheme at a later
date.

Perfect example of the mentality of a new investor at MtGox can be found on
this reddit comment:
[http://www.reddit.com/r/Bitcoin/comments/1yw9vj/how_i_nearly...](http://www.reddit.com/r/Bitcoin/comments/1yw9vj/how_i_nearly_lost_it_all_the_gox/)

I'll admit that not all the facts are known, and my conclusion above is
essentially hypothetical based on the information known at this time. Perhaps
when if we ever get access to internal communications within MtGox, we'll know
the truth. Even pleading incompetence does not mean that the operators weren't
unknowingly running a Ponzi scheme.

------
untog
Hello, downsides of unregulated currency. Some of the rules are there for a
reason.

~~~
dmm
Businesses fail all the time. Most startups fail. Should we have more startup
regulation?

Failure is a normal part of the market. What's really scary are the businesses
that are never allowed to fail.

~~~
colinbartlett
There is a reason the SEC mandates you be an "accredited" investor with at
least $200k income in the last 2 years or $1M in assets, excluding your house.

How many customers ("investors") would Mt. Gox have if that same regulation
was applied to them?

~~~
fragsworth
This is totally different from an accredited investment.

People using Mt.Gox were not investing in Mt.Gox, they were investing in USD
and BTC, and allowing Mt.Gox to hold it for them.

~~~
AJ007
Correction, they were allowing Mt.Gox to claim they were holding it.

------
moultano
I remember people getting angry whenever anyone pointed out that they were
trusting a _whole lot_ of their money to the Magic The Gathering Online
Exchange.

~~~
Lerc
And even now, that is not a valid criticism. There are many successful
businesses who have started in fields only tangentially related to their final
form. There will undoubtedly be many postmortems on what happened, but card
trading will have very little impact on what happened.

~~~
efuquen
I think the point is that a card game has nothing to do with a currency
exchange and the same sort of skills you would need for one don't translate
into another. We're talking about software we want to deal with a lot of
people's money, the impact of a trading card game platform making a big
mistake vs a currency exchange is much much different. I think the very real
criticism is you might be willing to risk having a business that isn't
necessarily super organized or secure deal with trading cards but not with
your money.

The talent and quality I would want to hold each to are on completely
different levels, and seeing someone pivot so frivolously from one to the
other should really give you pause. A pivot rarely involves completely
changing the type of business you're dealing with in the first place, the
product might be completely different or the customers you're going after
might change, but it usually is on some level related to what you started out
doing. Because theoretically you're drawing on some experience or insight into
the general sector you start a business in, not choosing something that you
think might be cool but are not qualified to run or manage and potentially
loose people (investors and consumers) a ton of money.

~~~
danielweber
It would have been very very hard to suddenly realize you don't have 500,000
MtG cards. Even willful ignorance about inventory would have pointed out the
problems pretty soon.

------
bartkappenburg
Did anyone have a look at the (html) source? What does this comment mean?

 _<!-- put announce for mtgox acq here -->_

Maybe mtgox has been acquired by another party?

~~~
hunvreus
Just noticed that as well; that's weird indeed. Would that mean we'd actually
see it being acquired?

~~~
chopmo
I think we're being trolled :)

------
songgao
I know little about Bitcoin (and its community) so please correct me where I'm
wrong:

If MtGox can publish all stolen Bitcoin, would it make it impossible for
whoever with them to use them? Although Bitcoin is not regulated, stealing
them still violates laws right? And since everything is kept track by the
entire Bitcoin network, whoever uses it can't keep anonymous.

~~~
lazyloop
There's Bitcoin laundering.
[https://en.bitcoin.it/wiki/Mixing_service](https://en.bitcoin.it/wiki/Mixing_service)

~~~
songgao
Interesting. Is it mathematically impossible to trace back to source (and
intermediate nodes) or is it just harder?

~~~
Groxx
Done correctly, mixing N together means a strict 1/N chance of getting the
source correct, and being more certain is impossible.

Trivialized example: a friend and I split a single bitcoin each and send half
to address A and half to address B, and we each control one address. Who owns
A and who owns B? If A is used to buy something, am I the buyer or my friend?
Since the private keys are generated offline, the fact that two sources sent
to both A and B is all the information that exists. I've "tainted" both
addresses, anyone can see that, but that's all.

But even when done correctly, odds are you still expose your identity through
your use of the coins in the future. So you run through a random number of
mixers, and then you behave extremely carefully, since there's _some_ taint to
everything and someone could be watching any of a billion addresses for signs
of _you_ (shipment to your house, for example). Given enough connections, you
can get pretty reasonable probabilities and start forming deeper and more
confident paths.

~~~
shawabawa3
Aren't there mixing services that completely sever the connection to you?

i.e. Me and you both want to launder coins, so through this mixing service we
essentially swap coins. Now my spends get traced to you and vice versa
(obviously this works a lot better with more people involved)

~~~
pavel_lishin
I don't think that severs the connection to you; you are now connected to the
service, and so is your friend, and therefore potentially to each other.

------
jellicle
So Mt. Gox has defrauded its users of half a BILLION dollars in value.

And, they've put out enough misinformation that those users believe "it wuz a
hax0r that did it". So no cops, no jail sentences.

I believe this will go down in history as the largest fraud ever committed.

If you've been following this closely and you aren't writing the book already,
you're missing out.

~~~
jotux
>I believe this will go down in history as the largest fraud ever committed.

Madoff was estimated at ~$65b, the Enron settlement was $7.1b, Lehmen folded
with $600b in assets, Comp-u-card overstated income and costed investors $14b,
etc. etc.

~~~
joeblau
Exactly. This is just warmup exercise compared to the pros.

~~~
ProAm
We'll do better next time.

------
tibbon
Its too early to say how this will go down in the end for Bitcoin (lawsuits,
public policy, pricing, etc), but it certainly is a dark mark. Somewhere
between management woes, terrible communication and technical ineptitude will
make this a case study for the future for what not to do on all fronts.

All businesses have risk, but it would appear they took an amazing opportunity
and squandered it entirely. To be at the forefront of an opportunity like
this, and then to screw it up royally for yourself, your users and the
community at large is simply tragic.

Much failure. Very wow.

------
Sidnicious
They serve some obfuscated JavaScript if you don't have a cookie:

    
    
      <html>
      
      <head>
          <title>MtGox.com loading</title>
      </head>
      
      <body>
          <p>Please wait...</p>
          <script>
              function xdec(data) {
                  var o = "rnBEt3XYIimD807pKGVwMLgbTFQWflO1CHv4eAR6Uc5odsNa_x9qy2ukJZ-jzPSh=";
                  var o1, o2, o3, h1, h2, h3, h4, bits, i = 0,
                      ac = 0,
                      dec = "",
                      tmp_arr = [];
                  if (!data) {
                      return data
                  }
                  data += '';
                  do {
                      h1 = o.indexOf(data.charAt(i++));
                      h2 = o.indexOf(data.charAt(i++));
                      h3 = o.indexOf(data.charAt(i++));
                      h4 = o.indexOf(data.charAt(i++));
                      bits = h1 << 18 | h2 << 12 | h3 << 6 | h4;
                      o1 = bits >> 16 & 0xff;
                      o2 = bits >> 8 & 0xff;
                      o3 = bits & 0xff;
                      if (h3 == 64) {
                          tmp_arr[ac++] = String.fromCharCode(o1)
                      } else if (h4 == 64) {
                          tmp_arr[ac++] = String.fromCharCode(o1, o2)
                      } else {
                          tmp_arr[ac++] = String.fromCharCode(o1, o2, o3)
                      }
                  } while (i < data.length);
                  dec = tmp_arr.join('');
                  return dec
              };
              document.cookie = xdec('0X8_0wFvF4iv0q898gGR8Ee9FRMJT4neFRGe840e8qrPKuxaOXA6Wef').replace(String.fromCharCode(0), '').split('').reverse().join('');
              location.href = '/';
          </script>
      </body>
      
      </html>

~~~
meowface
That JS sets this cookie:

    
    
        GngixolC=03d32ddfd0b8ef290fd1237b2fb650c4
    

Almost certainly an md5 hash given the length. No idea what the significance
is, though.

~~~
krapp
Weird.

------
Eeko
So MtGox is basically confirming, that some online criminals have accumulated
at least 6% of total Bitcoin market capital?

Not to count the drug dealers, cryptolockers, etc. The banksters are bad, but
this kind of stuff isn't good for wider adoption. "Hey, invest in bitcoin and
watch how the deflation will boost your friendly local crime empire!"

------
edj
Questions I have now:

1) How likely is a cascade of bank runs on other exchanges?

2) Do other exchanges have security issues or insolvency that make them
particularly vulnerable?

3) Will one of the other cryptocurrencies wax as confidence in BTC wanes?

~~~
dnautics
1) unlikely, since cascading bank runs are usually a result of fractional
reserve banking. Depositors in a collapsed bank are unable to pay off loans in
another bank, causing collateral damage to this other bank.

2) do other exchanges have security issues? Yes. Are they vulnerable? Only
time will tell. I would take Mandelbrot's modeling of insurers (banks are
"insurers" of sorts) in "the (Mis)behaviour of markets[0]" to heed: Collapses
are levy-distributed with fat tails (infinite variance) so they will happen
more frequently than you think, especially if you are operating with a model
that uses the normal distribution. Best practice is to diversify.

3) I doubt it. ADDENDUM: But in a rational world this incident (might take a
bit of time for the market to realize this) should actually INCREASE
confidence in BTC, since a large, irresponsible player was knocked out, and
the rest of the players on the field have a net higher level of responsibility
(for now).

[0][http://www.overstock.com/Books-Movies-Music-Games/The-Mis-
Be...](http://www.overstock.com/Books-Movies-Music-Games/The-Mis-Behavior-of-
Markets-A-Fractal-View-of-Financial-Turbulence-
Paperback/1742370/product.html?refccid=GSUOBJC4S2E3ZDKGRT73NX6FC4&searchidx=0)

(I'm linking it via overstock so you can buy it with BTC - which is,
hilariously, what I did)

~~~
ryanobjc
Bitcoin exchanges will have a run - they resemble fractional reserve banking,
because all exchanges dont have enough USD (or other currency) to cover every
bitcoin that people might want to trade thru the exchanges (that could be
every single bitcoin in existence).

This obviously results in the crash of the exchange rates, and probably a
reduction in the usage of the currency as well. Getting paid in something that
has little use of it's own doesn't help you.

Now, on #3, you said "in a rational world"... But this isn't a rational world,
so the rest of this sentence doesn't apply.

The reality is like loss of confidence is very powerful, and it could, as the
document noted, destroy BTC for the near and possibly medium term.

~~~
plaguuuuuu
I thought that the bids/asks were all from individual people

Unless the exchange is taking btc/money from users and _investing_ it
somewhere then every btc/$ should be totally within the system, yes?

so you can either withdraw your btc or your $ as the case may be.

~~~
ryanobjc
That's the problem with mtgox - there was a divorce of BTC and mtgoxBTC
account values, and that divergence, due to poor accounting/theft/whatever
ultimately lead to a situation where mtgox is now acting like a fractional
reserve bank.

In theory everything at mtgox is fine, UNLESS everyone want their real BTC
back now, aka bank run. As long as people just trade between mtgoxBTC or only
withdraw in reasonable amounts, it might be ok.

But that won't happen, because of the expectation of full BTC convertibility,
people are freaking out and wont cease to freak out.

There are so many parallels between the gold-backed currency and bank runs in
that era. Just rumors, or facts of insolvency and inability to produce either
specie or gold for deposit values could drive a run and that would be that.

All that annoying bank regulation is there for a reason. It's a good thing we
don't have bank runs anymore. Right? RIGHT?

------
laichzeit0
What for me is the worst is that Mark Karpeles just rips his fucking site off
the net, deletes the twitter feed and gives NO GODDAMN PUBLIC RESPONSE about
any of this shit.

Regardless of who's at fault, what went wrong, etc. just some simple
communication would be appreciated.

I seriously hope he's sleeping with one eye open. He sure as shit deserves
everything that's coming to him right now. Good fucking luck if you make it
out alive.

------
cjbarber
OP here.

<Shameless Promo> [http://www.meetup.com/Bitcoin-
Engineers/](http://www.meetup.com/Bitcoin-Engineers/)

This is a meetup group I created. We had our first meeting last friday. Would
love to have another one this Friday - will hold it at a casual restaurant/bar
on campus at Stanford.

(Disclosure - although I'm a cofounder of the Stanford Bitcoin Group this
group is by me and NOT the SBG).

</Shameless Promo>

------
rory096
So the OP is down, but if black hats truly made away with 700k BTC, they
control some 700000/12440000 = 5.6% of existing bitcoins. If that's the case,
is the original bitcoin blockchain really worth continuing?

------
Shank
At this point, the timeline of events greatly suggests that Mt. Gox's initial
announcement of withdrawal freezing was the point at which they were
officially dead. If the insolvency document is true, over 700,000 bitcoin was
stolen, due to a bug in their cold storage (likely, it wasn't truly cold, but
automated filling a hot wallet).

In the last two weeks, they were probably attempting to see if there was any
way to reverse or mitigate the damage. This is the point at which they have
determined that there is no 'out.' They have no where near the amount of
bitcoin required to even service withdrawals.

Edit: [http://support.mtgox.com/](http://support.mtgox.com/) now shows that
their Zendesk account has been terminated (a new account can be registered at
that address).

~~~
pwnguin
> Edit: [http://support.mtgox.com/](http://support.mtgox.com/) now shows that
> their Zendesk account has been terminated (a new account can be registered
> at that address).

Reregistering that Zendesk account alone has to be worth something amusing =)

------
colinbartlett
Well, it looks like that document was not a hoax:
[http://www.scribd.com/doc/209050732/MtGox-Situation-
Crisis-S...](http://www.scribd.com/doc/209050732/MtGox-Situation-Crisis-
Strategy-Draft)

Related: [http://blog.coinbase.com/post/77766809700/joint-statement-
re...](http://blog.coinbase.com/post/77766809700/joint-statement-regarding-
mtgox)

~~~
trothoun
It may not be a hoax, but it is definitely wishful thinking.

------
OedipusRex
Did I just loose all my coins I had with them?

~~~
georgemcbay
Yes, but in return you are learning a valuable lesson, which is that "loose"
spells the word that means the opposite of tight and the word you were looking
for is "lose", which is the opposite of win or gain.

~~~
Gracana
I'm impressed, how did you manage to understand what he meant?

------
jhspaybar
How this plays out will be very interesting. Sure, I've studied bank runs, and
currency events in school, but to actually see it as it happens...I hope
economists are paying attention, there could be some awesome research coming
out of this whole event!

------
pravda
First time I visited mtgox.com was a few hours ago. Still have it open in my
browser.

For the nostalgic: [http://imgur.com/a/qok0O](http://imgur.com/a/qok0O)

~~~
M4v3R
"Trade with confidence"

... yeah, right.

~~~
danielweber
They have a padlock on their screen. What more do you want?

------
agorabinary
So...now that mt.gox is dead, does this mean mt gox employees are free from
any non-disclosure agreements and can talk freely about what the hell
happened?

Insider info would be greatly appreciated.

~~~
camus2
If i was a Mt Gox employee,I would go into hiding and keep quiet instead of
going public, all sort of people have invested into Gox including the kind of
people you dont want to mess with.

~~~
agorabinary
It's probably more likely that many employees were oblivious to the
insolvency. As long as everyone's accounts were "credited" as they should,
regardless of the soundness of their cold storage accounts, it would appear as
though everything was fine.

See:
[http://www.reddit.com/r/Bitcoin/comments/1ysaz2/sarahcoinbit...](http://www.reddit.com/r/Bitcoin/comments/1ysaz2/sarahcoinbit_from_mtgox_support_says_there_is_no/)

------
jliptzin
To me this demonstrates how powerful first mover advantage can be. Gox was
showing cracks in the hull (actually more like gaping holes) for months and
months. People have been repeatedly warned not to touch Gox with their funds.
Other, more professional (so far) exchanges popped up. Yet people very much
still used Gox. Were they ignorant, lazy, or stupid? I wish everyone who lost
could get their money back, but it's really hard to have sympathy here.

------
joeblau
Wow just watched this video of Kolin Burges from London who flew to Tokyo to
find out, face to face, if he could withdraw his Bitcoins from Mt Gox. He
makes an accurate prediction at the end, but this totally sucks for BTC. I was
pretty optimistic about the future of it, but this is a pretty big speed bump.

[http://www.youtube.com/watch?v=ob9Ak1t09Ao](http://www.youtube.com/watch?v=ob9Ak1t09Ao)

------
pjan
I do believe Mark Karpelès' LinkedIn Summary is due for an update:

"... I have a long experience in company creation, and experienced almost any
imaginable kind of trouble. Now is the time to create something that will be
solid enough to handle any situation, anytime."

------
RRRA
So, who the other day said they would be buying if BTC felt bellow 500$?

Now seems to be the time if they still believe that arbitrary value still
makes sense.

~~~
dnautics
that would be me, maybe?

[https://news.ycombinator.com/item?id=6867999](https://news.ycombinator.com/item?id=6867999)

Note the date on this... 79 days ago the price of BTC was in the 1.0k range.

~~~
lhnz
What's an "autodraw" by the way?

~~~
dnautics
coinbase has a feature where you can set up recurring draws.

------
whatever1029
Everyone on this thread is being way too nice about this guy. He deserves to
go to jail for a very long time. He knowingly took money from people even
after problems were discovered, and said nothing about it. And after the
implosion he has still not fessed up to the truth! He deserves what he gets.
I'm sure a movie will be made about this debacle st some stage in the future,
but this chap doesn't get to become a motivational speaker in the end.

------
epaga
Note the comment in the source code which just appeared:

<!-- put announce for mtgox acq here -->

------
pedalpete
Slight drop over the last few hours
[http://bitcoinwisdom.com/](http://bitcoinwisdom.com/)

I'm curious if this will create a run on bitcoin or not? All of the funds from
MtGox have in theory already been lost. There may be some fear that other
networks will follow, but it may be rational that the price would remain level
as one failed bank does not equal a failed currency.

~~~
dnautics
until people figure out that permanently lost coins are deflationary...

~~~
shuw
the coins were not lost, but stolen through the transaction malleability bug

~~~
dnautics
good point.

------
bakhy
BTW, why all this "you lost your coins" talk? if you have valid, in any way
documented claims against MtGox, you should be able to sue and get some form
of compensation... unfortunately, the unregulated nature of Bitcoin, the fact
that the company might not have any property... ah, forget it.

edit - basically, MtGox lost money. for it's users, there might be a chance to
get something back.

------
bgsymal
In the page source:

<!-- put announce for mtgox acq here -->

------
goxxed
Have anyone started analyzing the blockchain for these suspicious 'leaks' out
of Gox? This might be one of the addresses:
[https://blockchain.info/address/1Drt3c8pSdrkyjuBiwVcSSixZwQt...](https://blockchain.info/address/1Drt3c8pSdrkyjuBiwVcSSixZwQtMZ3Tew)

You can see that over the past months there has been tons of large transfers
out to addresses
([https://blockchain.info/address/1pnHxHzRQ1uE4rH9KtxYKhVDic2S...](https://blockchain.info/address/1pnHxHzRQ1uE4rH9KtxYKhVDic2SFijno))
that end up splitting up into tons of small addresses, all of which has never
spent a dime. From the look of it, it seems that a huge part of the total
782,558 BTC going through the address has ended up in tiny addresses which has
never spent any part of it. Are there any other plausible owners of such an
account?

~~~
o_nate
On the other thread there was some information suggesting this might be an
internal account used by another exchange.

------
lectrick
I'm sorry but the vast majority of PHP programmers are not equipped to handle
running a goddamn main exchange.

------
Titanous

      $ curl -I https://www.mtgox.com
      HTTP/1.1 503 Service Unavailable
      Server: AkamaiGHost
      Mime-Version: 1.0
      Content-Type: text/html
      Content-Length: 176
      Expires: Tue, 25 Feb 2014 03:38:10 GMT
      Date: Tue, 25 Feb 2014 03:38:10 GMT
      Connection: keep-alive

------
ps4fanboy
If they took money from depositors after they knew they were insolvent they
probably broke the law.

------
stef25
I wonder what this comment in the source means <!-- put announce for mtgox acq
here --> ?

~~~
annnnd
Probably just a way to start a rumor that acquisition will take place.

------
zmanian
The tendency of institutions to deny, cover up and conceal systems
exploitation is one of the major failing of contemporary culture.

This is how we lied ourselves into thinking that the iOS SSL stack was
trustworthy and it applies equally to the Mt. Gox situation.

------
jbaudanza
This is still better than a government bailout.

~~~
yeukhon
Hmm? We got all the money back from government bailout. Here, you lose all the
money.

------
captainchaos
Ok, at the risk of sounding completely naive...

I've been following this story for a while, and it seems that no one can say
for sure if this is embezzlement or gross incompetence. Based on leaked memos
it seems to be most people are learning towards the latter, but I'm curious if
there's any evidence either way.

Based on the claimed transparency of Bitcoin, I would have expected
embezzlement on this scale to have been noticed earlier, or at the very least
have people be able to follow the Bitcoin trail to determine what is actually
happening.

Am I wrong or just missing something?

------
willvarfar
How do we know that the mgmt hasn't run away with a whole load of coin? They
may really have lost a lot; they may really not be able to continue; but how
do we know that they lost _everything_?

------
crawrey
TO THE MOON!

~~~
flaxin
dark side of the moon

------
skimmas
<html> <head> <title>MtGox.com</title> </head> <body> <!-- put announce for
mtgox acq here --> </body> </html>

------
Gracana
They still have my 6 BTC. Oh well, it didn't really cost me anything to get
those coins, and it taught me a valuable lesson about trusting a system with
no customer protections.

------
flycaliguy
My understanding is that if a majority of the miners agree, certain reversals
can be made to the Bitcoin economy. Is this a situation which would benefit
from such a reversal?

~~~
keeperofdakeys
All the transactions that go to mtgox are spread out over blocks that go back
for years. It's only useful to reverse the most recent block(s). This is
because blocks are made up of transactions. You can't just cherrypick them
out, and each block needs the previous unchanged.

You might get some more details from this
[http://www.reddit.com/r/Bitcoin/comments/1a51xx/](http://www.reddit.com/r/Bitcoin/comments/1a51xx/).
It descries a fork in the blockchain that occured a while ago.

------
terranstyler
You guys have any idea on how to proceed if you (allegedly) have a few BTC and
USD there?

Yeah yeah I know, I read HN often but obviously I missed the "Stay away from
Gox" posts :(

~~~
Crito
Contact a lawyer that knows something about Japan maybe? I'd say you are
fucked.

~~~
terranstyler
I agree with your take on the situation ;)

Thing is that a lawyer might be throwing good money after bad, it's just ~3k
and who knows, maybe the fiat claims (~50% of the 3k) are worth something
(though I doubt it).

------
victorantos
Frankly I am surprised so many people in this community were so incredibly
stupid and blind about Gox. Months and months ago when I was deciding to get
into BTC I researched the exchanges and people were complaining about
difficulties withdrawing from Gox. I just had this instinctive feeling that it
was a big red flag and I would rather deal with a regulated albeit slow broker
(Coinbase) where I can actually get my money back.

------
sillysaurus3
Hmm... It seems I was wrong.

Well, damn. Oh well.

~~~
fchollet
So do you still have all your savings in BTC?

------
fauria
In the comments there are some examples of large losses due to technical or
software failures:

\- Knight Capital Group \- Mizuho Securities \- HyperVM

Anyone knows more cases?

------
goatse
WE ACCIDENTALLY THE BITCOINS

------
BtM909
And there's a new statement on the website:

Dear MtGox Customers,

In the event of recent news reports and the potential repercussions on MtGox's
operations and the market, a decision was taken to close all transactions for
the time being in order to protect the site and our users. We will be closely
monitoring the situation and will react accordingly.

Best regards, MtGox Team

~~~
lfmb
What does that even mean?

There is not one single oficial statement saying what they will do from now
on. To me, this delay means just one thing, they screwed big time and have
zero good news.

------
icedchai
If 700,000 BTC were really stolen over a long term, the people running mtgox
must be complete idiots. How hard is it to occasionally add up the amount in
the wallet and compare to the customer DB balances?

You would think this would be done hourly (if not, at least daily) as part of
sanity check / auditing process.

~~~
jami
I bet they did occasionally check. And leaving it at, "Hm, that's weird. Oh
well!" was where it went from problem to disaster.

------
blackdogie
So I guess the transfer out I initiated 3 weeks ago is also lost then. You
live you learn I guess !

------
newbrict
Why would they pull the site down?

~~~
lazyloop
Hide as much information as possible to avoid class action lawsuits?

~~~
llamataboot
Seems to make a lawsuit even more likely. Evidence of something to hide?

------
DrTung
Most links are still valid, like this one for their (last?) announcement:

[https://www.mtgox.com/img/pdf/20140220-Announcement.pdf](https://www.mtgox.com/img/pdf/20140220-Announcement.pdf)

------
tjaerv
The excellent "Blame it on Mt.Gox" music video from last spring seems rather
topical again:

[http://www.youtube.com/watch?v=K2ku1A5Ox8U](http://www.youtube.com/watch?v=K2ku1A5Ox8U)

------
Larrikin
So there is alot of talk about coins being lost. I converted all my coins to
litecoin a while ago, but I think I had some yen in my account. What is the
likely hood of me getting that back.

------
gfodor
"The time to buy is when there's blood in the streets."

~~~
mdemare
"It's always darkest just before it goes pitch black."

------
lazyloop
The big questions now, what does this mean for BTC prices and which exchanges
can still be trusted? Perhaps a good time to invest after the inevitable
collapse tomorrow.

~~~
smtddr
You are not suppose to trust any exchange to large sums of coins. You buy, you
transfer out immediately.

------
MyNameIsMK
Could this be the largest documented heist of BTC in history?

~~~
jamesaguilar
Maybe so, but the race is long.

------
scotty79
Last time I've lost coins with exchange (bitomat.pl) MtGox stepped in and
covered the losses in full. I wonder if anyone will save my bitcoins now.

------
EGreg
Will anyone be able to get their bitcoins from MtGox?

They said the bitcoins were safe. What changed? Will they be transferred
eventually? What are the chances?

~~~
camus2
Gox coins are gone,along with all the customer fiat.

~~~
EGreg
What do you mean gone? What happened to the hard drives with the wallet
numbers and private keys? How hard is it to transfer them via the blockchain
transactions to their owners?

~~~
taejo
> What happened to the hard drives with the wallet numbers and private keys?

The hard drives are still there, but the wallets are empty. The coins were
stolen.

~~~
EGreg
Are you sure? I haven't heard of any coins being stolen. MtGox said the coins
were safe and they just had trouble transferring them because of their client
and malleable transactions!

~~~
taejo
Malleable transactions don't make it harder to transfer coins, they make it
_easier_.

------
obimod
This kind of reminds me of the Diablo 1 duping scheme, well at least my layman
understanding of the duping flaw.

------
kome
Bitcoin is just a game, nobody was hurt.

------
wtpiu
the api still returns information:

[http://data.mtgox.com/api/2/BTCUSD/money/ticker_fast?pretty](http://data.mtgox.com/api/2/BTCUSD/money/ticker_fast?pretty)

------
bakhy
so, in time, bitcoin exchanges will become regulated. and in some more time,
the irony might dawn on the libertarians.

but on a serious note, growing pains, i guess. i am sorry for people who lost
their money.

------
pg_bot
On the bright side, we have a new term for getting screwed: goxxed.

~~~
bobsil1
And you can get both goxxed and doxxed.

------
anigbrowl
In a strange way, I feel this merits the HN black bar treatment if only
because of its historical import.

~~~
newbrict
What is the "black bar" treatment

~~~
ars
When someone prominent in the hacking community dies HN puts a black bar at
the top of the page as a memorial.

It's not appropriate here. A human life and money are not comparable no matter
how much money.

~~~
Istof
this isn't true, it is worth about 7 millions
([http://en.wikipedia.org/wiki/Value_of_life](http://en.wikipedia.org/wiki/Value_of_life))

~~~
wpietri
So if we can raise $7m we can kill you?

Seriously, the accounting fictions used for various economic analyses don't
directly apply in the real world.

~~~
anigbrowl
Actually, they do - courts award damages for loss of life all the time, and
calculating such economic loss is a basic skill of practicing tort law. A
person's life is almost always infinitely valuable to the individual in
question, but for everyone else it's surprisingly calculable. A gloomy
business, but a necessary one all the same -life still goes on for the
survivors, and at some point accountings are made and people move on.

~~~
wpietri
Sorry, but that is not what I'd include in the real world, not in the sense
that is relevant to this thread. Economic loss is not the only kind of loss.

Which is why this $500m loss is not the same as 71.43 deaths, even if that
many deaths might result in a $500m settlement.

