8 ms·

Mt.Gox Withdrawals

132 points by brokenmusic 13y ago

simcop2387 13y ago
My bet is that a lot of these are from users that are trying to leave mtgox for other exchanges since mtgox isn't paying out fiat.
- brokenmusic 13y ago
  Yes, and now they're not paying BTC either. 50k BTC (over 4k withdrawal attempts) are now stuck in limbo. MtGox claims it's a purely technical issue due to their custom implementation of Bitcoin protocol. People don't really believe that anymore, most (at this point) on IRC and Bitcointalk and Reddit think Gox doesn't have the money. Some haven't received their BTC after 13 days of waiting. MtGox hasn't released any official statement except this one: https://support.mtgox.com/entries/26128504-Update-Statement-Regarding-BTC-Withdrawal-Delays https://support.mtgox.com/entries/26128504-Update-Statement-... No proof of having enough funds, no explanation.
  - cantbecool 13y ago
    Where is everyone going, coinbase?
    - brokenmusic 13y ago
      btc-e.com and Bitstamp, I guess.
    - contingencies 13y ago
      Kraken.com
      - siculars 13y ago
        Is kraken taking money in all States? Or just South Carolina which, I believe, is the only State they have a license in.
        contingencies 13y ago
        There are regulatory limits on fiat transactions in some US states. The list of approved states has never been one state long, and the expensive and time consuming, US-specific process of acquiring state-by-state licenses for the remainder is well underway. Overseas, in more logically regulated places such as Europe and parts of East Asia, there's no such barrier.
    - SanderMak 13y ago
      kraken.com
    - Mtinie 13y ago
      Hopefully Vault of Satoshi's volume will pick up as a result. Top-notch infrastructure and things are communicated out to holders in a timely manner.
  - ChuckMcM 13y ago
    I could make some smarmy remark about how good FDIC insurance is looking about now but at those levels (north of 30M$ equivalent) even banks have a hard time. So I'll pass. The reference page mentioned their "hot wallet" went dry (presumably it ran out of coin) and someone went to their offline storage and took out the USB stick with the offline wallet and will drive back into town and put some coinage into the account. I suppose if you knew who the Mt Gox folks were, and you had enough BTC you could try to 'stage' this ala Oceans 11 or the Italian job but given the challenge of moving really large quantities of BTC into fiat currency I'm not sure that makes sense. One of the things that is really fascinating about the BTC ecosystem is that all of this stuff happens visibly, unlike private banks where they just find the guy who embezzled the money shoot him and drop him off a pier or something.
    - pyalot2 13y ago
      The FDIC insurance funds only covers a small fraction of the liabilities of deposits. If one of the too big to fail banks fails, and isn't bailed out, depositors are gonna get Goxed.
      - hueving 13y ago
        FDIC covers up to $200,000 for each account.
        hayksaakian 13y ago
        Approx 200 btc. Note the issues the parent mentioned were with 4k+btc transfers FDIC would not have saved them in USD
        Anderkent 13y ago
        Pretty sure the GP talks about 4k transactions, not transactions with 4k+ btc.
        pyalot2 13y ago
        The FDIC covers up to $250k for each account. It does so using a fund that's about $50b, for a depositor liability of around $5t. If you do the math, that means around 1% of depositor liabilities are covered. There are over 5000 institutions covered, however JP Morgan Chase holds around $1t in deposits (20%), BofA holds around $2t (40%) and then the rest is divided up in the long tail of decreasing market share. This means that, if for instance BofA or JP Morgan Chase fails (that'd never happen, right?) that the liabilities alone of these banks are already 20x to 40x bigger than the entire FDIC fund. Please tell me you see the problem there.
- deleted 13y ago
  [deleted]
brokenmusic 13y ago
In short what MtGox should've done if this was really just a technical issue: 1. Stop all deposits until the issue is resolved. 2. Stop all withdrawals and then process all those that were already made - manually. 3. Only then try and fix the bug. 4. Reopen with no fees and some other nice things for customers. All steps should be accompanied by a statement explaining everything thoroughly. Even that course of action wouldn't necessarily restore confidence, but it wouldn't destroy their business. If they're not doing this, it means something else is up and they are not to be trusted. At this point, their business is done anyway (unless they do the steps above like right now). The question is, will people see their BTC. My bet is not. But who knows.
- Anderkent 13y ago
  1. How do you stop bitcoin deposits? You can't stop people from sending transactions to their deposit wallets. You can maybe stop processing them, but imagine the outrage that'd cause 2. I don't think they can undo the already sent coins. If it really is because of using coinbase outputs, the transactions will confirm eventually (100 generations = ~17 hours?). Sending the money again would cause a double withdrawal. 3. Why? The faster it's fixed the less issues for them
  - brokenmusic 13y ago
    1. At the very least take down the option from the website. 2. There are no transactions on the blockchain. All withdrawals are stuck within MtGox. 3. People who withdrew money don't care about the fix, they care about getting their money back. Start paying now or say goodbye to your business. This is no game.
    - Anderkent 13y ago
      Oh, I thought the transactions were already broadcasted, just weren't being confirmed? edit: not on a blockchain means not confirmed. A transaction that's been broadcast but not confirmed yet is probably still in the transaction pool of some miners - as soon as it becomes valid, it might get confirmed even without the original sender rebroadcasting.
lucaspiller 13y ago
As a commenter on Reddit said "MtGox is not only a joke it's detrimental to Bitcoin's ecosystem.". How are people expected to take Bitcoin seriously when issues like this happen all the time?
- brokenmusic 13y ago
  I don't believe it's just "an issue" anymore. Not to spread FUD, as my coins are also stuck there, but MtGox is likely to go down now.
  - lucaspiller 13y ago
    My point isn't whether it's an issue or something more in this case, but things like this don't happen with banks (at least not all the time [0][1]). With a bank you can be pretty confident you can go to an ATM and get your money out. If something does go wrong they will eventually sort it out. If something major goes wrong like them going bust your savings will be covered (at least in the EU, up to a point). Bitcoin services don't have any of these securities - it's akin to asking a bloke down the pub to hold on to £50 for you. [0] - http://www.dailymail.co.uk/money/saving/article-2168701/RBS-admits-Ulster-Bank-fiasco-fixed-mid-July.html http://www.dailymail.co.uk/money/saving/article-2168701/RBS-... [1] - http://www.dailymail.co.uk/news/article-2517106/NatWest-RBS-Cyber-Monday-meltdown-EMPTIES-customers-bank-accounts.html http://www.dailymail.co.uk/news/article-2517106/NatWest-RBS-...
    - makomk 13y ago
      With a bank, you can be pretty confident you can go to an ATM and get small amounts of money out, but even there we've seen system failures block withdrawals for longer than this one. Also, there's small daily ATM limits and at least one major British bank has a policy of refusing large cash withdrawals (several thousand pounds or more) full stop through any means unless you can prove to their satisfaction why you need that much cash: http://www.bbc.co.uk/news/business-25861717 http://www.bbc.co.uk/news/business-25861717
pyalot2 13y ago
The second it became apparent that Fiat withdrawal from Gox turned out to be problematic, it was clear nobody should have his assets on that exchange (that was over a year ago). Why? Well, according to Gox the Fiat withdrawal issues where caused by "ye olde banking system". But, you only had Goxes word for that. So considering all possibilities, including that they simply might not have the money, one needs to make a risk analysis, what would it mean if they didn't have the money? Well, if Gox doesn't have the Fiat to process Fiat withdrawals, it stands to reason that in an effort mitigate issues, they would exchange (themselves) customer funds between fiat <-> coins in order to try to weasel themselves out of the hole. So this means that any liquidity problem on either side (coins or fiat) would manifest itself on both sides (coins AND fiat). Once you can recognize that there's a risk that Gox might have liquidity problems, and that those problems can mean that you will not be able to withdraw your coins, there's only one logical conclusion. This conclusion you could have reached over a year ago, withdraw all funds in any way possible from Gox. And if you didn't do that, well, it sucks, a lot, been there, done that, consider it to be a valuable lesson about dealing with banks in general.
- tlrobinson 13y ago
  "But, you only had Goxes word for that." Roger Ver, who is well respected in the Bitcoin world, also posted this video: https://www.youtube.com/watch?v=UP1YsMlrfF0 https://www.youtube.com/watch?v=UP1YsMlrfF0 It's a little creepy though, like he's being held at gunpoint, forced to read a statement... I agree it's risky to keep money in a Bitcoin exchange that's showing signs of trouble.
  - rytis 13y ago
    like he's being held at gunpoint, forced to read a statement Look at his eyes, he is actually reading the statement.
  - pyalot2 13y ago
    You know, I saw that video when it came out (also known as the Roger hostage video). And somehow, strangely, it didn't give any more confidence in Gox. Yes, that video looks like Roger is held at gunpoint by his captors forced to read a statement. Obviously, that's not what happened. However I believe that Roger had a choice of how to deliver his statement. And obviously, if he had seen something to suggest that there would be liquidity problems, or if he was unconvinced, he couldn't have said so. Gox would've probably sued him in the ensuing bank run. Still, he went there, looked at it, and had to get the news out. So how to do it in a way, that doesn't make Gox sue him? Pretty much exactly how Linus did admit that NSA has approached him. Do it in a way to leave you least open to being sued, while still getting the message across. And that's exactly how many interpreted this statement of Roger.
deleted 13y ago
[deleted]
- brokenmusic 13y ago
  It already is a bank run, look at the charts. 50k Bitcoins in limbo. Over 10k added just overnight.
  - BESebastian 13y ago
    So around £24.4mil? That's nuts.
    - brokenmusic 13y ago
      It's already over 55k BTC, added 5k in just a couple of hours. Probably gonna be 100k tomorrow.
      - Uchikoma 13y ago
        Nearly 63k BTC now.
Lerc 13y ago
I have heard multiple explanations for the delays, and I think there are multiple issues at play. Firstly it has been claimed that they have freshly mined coins stored undistinguished from others. If someone withdraws an amount that draws from an address with new coins, that withdrawal will be delayed. I'm not sure how those freshly minted coins get to MtGox in the first place (any such transfer would presumably be delayed). Assuming they do have freshly minted coins in their pools, That would be consistent of some short term delays. I have experienced delays that fit this model where a Hash for the transaction has been provided but the transfer does not arrive at the other end for a few hours. Anything affected by this mechanism shouldn't be delayed beyond 17ish hours. There are transactions not going though for longer periods, The transaction hash is being provided. I have seen claims suggesting that transactions are failing because of a subtle protocol incompatibility, which would explain the fairly random nature of the failed transactions. Lots of people are saying MtGox is out of funds and the sky is falling. The biggest problem with those claims is that people have been predicting the imminent demise of MtGox for quite some time. MtGox may be failing, but everything that happens cannot be a sign of imminent collapse if it keeps on going. I'm not sure if the claims of MtGox running a fractional reserve on the sly are very valid. I think it's more likely that they have technical issues, but the very nature of Bitcoin means that they could potentially lose all their bitcoin through technical issues alone. If you lose a private key or transfer bitcoin to an address with a lost key, those coins are effectively gone. If your software isn't behaving it's quite possible to make an automated money shredder. It's fairly obvious that at this point they need to do some fairly significant steps to demonstrate that they are in control of enough bitcoin. If they want to restore confidence in their ability to pay out, they should use Bitcoin's ability to demonstrate ownership to do just that. Restoring confidence in their ability to operate is going to be a longer road.
- brokenmusic 13y ago
  I think since they refuse to show evidence they have enough funds, it should be assumed it's a scam until proven otherwise. Really, they're making tons of money off fees, they are the most expensive exchange. Screwing customers like that is below acceptable. They're not just some paid app that can go down and customer won't be affected too much. It's money. Lot's of them. You can't refuse to pay and keep silence, otherwise you're a scammer.
fragsworth 13y ago
Mt.Gox needs to calm everyone down by signing a message from an address (or multiple addresses) that contain enough bitcoins to prove that they can handle the withdrawals. If they do not do this, we must assume that they are insolvent and have lost their customers' coins.
- robzyb 13y ago
  How would we know that they haven't just paid someone (with a lot of bitcoins) $20k to sign that message?
  - brokenmusic 13y ago
    Why would that anyone holding a lot of coins need some incomparably small sum from MtGox while he can clearly make more selling it before the meltdown on other exchanges?
    - kalleboo 13y ago
      By propping up MtGox he'd be keeping the value of his Bitcoins up. If MtGox fails, there'll be a huge dip in the price of BTC across all the exchanges.
      - brokenmusic 13y ago
        He can also be the first to sell on another exchange and buy at the bottom. More profit, less risk.
  - atmosx 13y ago
    You don't. But it's better then nothing at least as a PR. On the other hand, I know of no bank that could get it's head straight around a bank-run.
    - Mtinie 13y ago
      I would agree with you, in the context of the fractional reserve system. But in the case of a cryptocurrency exchange the credits and debits should be more or less equal, minus the trading fees. At least, that's how places like Mt. Gox promote themselves. It may take longer to get your funds, if there is a "run" on the exchange, because of the flood of transactions into the system and the need to reconcile everything, but that would likely be measured in a few hours extra, not days/weeks.
dash_riprock 13y ago
And I wondered why my fiat withdrawal has not reached my bank account for almost 2 months :-( Bugger.
- patio11 13y ago
  Gox's explanation is that the 2nd largest bank in Japan was so inundated by Gox's wire transfer volume that it could not possibly cope with it. An alternative hypothesis very popular in the community: Mt. Gox has been functionally insolvent since the US froze about $6 million in their accounts when they closed the US subsidiary for being a money laundering operation, and Mt. Gox has been delaying hard-currency withdraws to the majority of their customer base to buy time until their transaction fees make them solvent again. A point in favor of the alternative hypothesis: I don't have to be an idiot to believe it is true. Another hypothesis I'd grant greater than zero credence to: Bank: "We think you're a money transmitter." Gox: "Really!?" Bank: "Certainly looks like that." Gox: "We prefer to think of ourselves as a technical firm which is compliant with all the laws of Japan as long as nobody asks any pointed questions." Bank: "No technical firm requires more than, say, 10 outgoing wires per day. If you need more than that, we need to ask some pointed questions."
  - dash_riprock 13y ago
    I fear your point 2 is right but your point 4 makes me laugh the most - which helps let me tell you. It was, as they say, to good to be true.
  - kalleboo 13y ago
    > Gox's explanation is that the 2nd largest bank in Japan was so inundated by Gox's wire transfer volume that it could not possibly cope with it. Anyone who's banked in Japan wouldn't be surprised at all to hear that. This is a country where the only ATMs that take foreign cards are the ones at 7-11. All international transfers are performed by hand, on paper. They'll call you at home to ask you the reason for your transfer. What company other than Mt Gox sends out thousands of international wires per day? Everyone else has foreign subsidiaries to deal with that. And we all saw what happened when Mt Gox tried that... That said, that's no excuse for people to attempt to use them as a customer. The lack of transparency this far along into the problem has made me lose any faith in them as well. They seriously can't even give you a queue number and ETA on your transfer?
levosmetalo 13y ago
I still don't understand why are people keeping bitcoins on MtGox in the first place? It's not like they are going to get any interest from MtGox from doing so. If you need to buy/sell bitcoins then just send them to MtGox and retrieve immediately after transactions. Just keeping money, either virtual or real in someone elses wallet is not a good idea, especially if you don't get any benefit, only potential risk. I'm not blaming the victims here, just can't understand the reasoning behind. Then again, I have never used MtGox, so I might have been missing something.
- brokenmusic 13y ago
  Trading. Some people trade.
  - Mtinie 13y ago
    That accounts for some of the people who use the exchange that way, but I'm not sure it applies to most of the funds that have stayed out there.
  - jnbiche 13y ago
    Volume on Bitstamp has been adequate for trading for sometime now.
  - levosmetalo 13y ago
    I said "except for trading". As "money/coins in", "buy/sell", "coins/money out". Still not understand why keeping it there.
chmike 13y ago
Possible insider information on close to come hit on BTC. Or big players want to secure their money after a good profit from BTC value raise and move to avoid a burst on the BTC speculation bubble.
marxdeveloper 13y ago
My account and all the funds seem to be frozen, I kept them in $. When I log in it shows me: Your account has been restricted from accessing funding options. Please contact support@mtgox.com for additional information on why your account has been restricted. I've tried contacting their support, but no luck so far. I have never used BitInstant and I was verified before. Anyone else having similar issues?
- wfn 13y ago
  Try hopping onto the official #mtgox support channel on freenode and asking ne0futur and/or others.
  - haakon 13y ago
    Just be very careful not to sound frustrated or impolite, or they'll kickban you immediately. It's getting pretty tense in there.
    - FireBeyond 13y ago
      No kidding. I own no BTC, but jumped in there just to have a look, and it's testy and tense. Staff jumping on anything that sounds vaguely negative, even if not directly related: [09:19:42] <Asmiran> if the bug is caused by known reason [09:19:55] <Asmiran> it should take not that long time to solve the problem [09:21:36] <@SarahCoinBit> Asmiran that is your opion, don't pass it off as fact (even though the logic was flawed, admittedly)
laichzeit0 13y ago
This isn't the first time this happened. Three months ago I had BTC withdraw problems [1] with MtGox. It took them about 5 days to send my money. That's when I decided "fuck this shit" and moved to BitStamp. The difference between how the two exchanges operate is night/day. Even if they have legitimate technical problems, it's just not worth using them. Don't get Gox'd, use a better exchange. [1] https://news.ycombinator.com/item?id=6688659 https://news.ycombinator.com/item?id=6688659
- jschmitz28 13y ago
  > Don't get Gox'd, use a better exchange. Interestingly, a bug (and maybe margin trading exploit) took down trading on Bitfinex earlier tonight and withdrawals are currently halted. Before this I've never had any issues with the exchange. The last few months dealing with bitcoins have made me realize how important it is to have your money insured.
jcfrei 13y ago
Does anybody know what happens to funds on mtgox in case they go bust? Is there some kind of deposit insurance? I sold all my bitcoins but I've still got quite a lot of fiat on that account (USD) and losing it would really piss me off.
- patio11 13y ago
  I'm going to assume this question is being asked in good faith. Mt. Gox is not covered by the formal or informal guarantees to make creditors whole which the Japanese government customarily extends to regulated depository institutions. Mt. Gox has been, let me be delicate, cagey about their extent of involvement with Japanese regulators. Should Mt. Gox abscond with your money, you will certainly have civil torts available. You can pursue them in any court of competent jurisdiction in Tokyo. This will take 3 to 5 years and cost you several hundred thousand dollars. I'll save your competent legal representative some time and cut to the chase: vindication in court will not enable you to recoup a single yen.
paulpw 13y ago
From: https://bitcoinfoundation.org/forum/index.php?/topic/700-mtgox-insolvency/page__hl__mtgox https://bitcoinfoundation.org/forum/index.php?/topic/700-mtg... " Mt Gox has a custom reimplementation of Bitcoin that is known to be quirky and non-compliant in a bunch of ways, for example, it used to overlook the coinbase maturity rule. That means miners who use custom software to send money to MtGox immediately, without waiting for confirmation, didn't get spotted by the MtGox software. When they tried to respend the newly mined money, the transactions failed to propagate. I don't know if that specifically is still an issue, but the MtGox scanner site suggests that their implementation fails to implement a bunch of other edge case rules around fees, sizes, and canonical signatures. It seems very likely to me that for some reason Mark K is not able to work on his codebase anymore, and isn't able to resolve bugs in a timely manner, leaving his support staff to try and clean up the mess by making horrible hacks like "throw away and retry later". The question in my mind then becomes - where is Mark and what is he doing? "
TomGullen 13y ago
Why anyone was using Gox in the first place confuses me. It's been having trouble for over a year now I think? Lots of warning signs, yet people continued to use them. If anyone had done cursory research before buying Bitcoin (and they should of) they would of read a wealth of horror stories and bad signs about MtGox. It didn't even make sense to use them as a new user, the price of BTC was considerably more expensive than other exchanges! I think in part it's caused by the media always refering to MtGox for price information as they have the longest historical data and inadvertently providing MtGox with a lot of free promotion. I wonder how sites like eToro who allow you to trade Bitcoin pegged on MtGox price will be impacted if MtGox really is insolvent. To me the simplest explanation for all the problems MtGox is suffering is that they are insolvent.
- peteretep 13y ago
  > Why anyone was using Gox in the first place confuses me Sell price was ~$100 more on MtGOX than on other exchanges. If you have ten bitcoins you want to sell, that's $1,000 more if you're willing to wait 6 weeks for MtGOX to send you your money.
  - Mtinie 13y ago
    I don't know anyone who has been able to pull USD out of Mt. Gox for months. The reason it was +$100/BTC on Gox vs. other exchanges was the people were paying a premium to get their current fiat holdings converted into something that they could pull out. Now that avenue is apparently closed, too, so it will be interesting (to say the least) to see how this plays out.
  - pmorici 13y ago
    That's the thing though there was no evidence that they were sending anyone any money at least not in USD.
captaincrunch 13y ago
Seeing customers get this treatment is exactly why I created my own exchange, in fact there are so many alternatives nobody should be using Mt. Gox anymore. So many good alternatives: VaultOfSatoshi.com, Bitstamp.com, Kraken.com, etc..
infruset 13y ago
I have just been able to withdraw 0.3 BTC.
pjc50 13y ago
Just as "all political careers end in failure", so all Bitcoin exchanges end in collapse. You have all the problems of a normal bank run, and* the problems of being a regulatory gray area, and no political or regulatory bailout mechanism available. There is also the constant risk of technical failure or criminal activity losing all your assets beyond all possibility of recovery. * Eventually. Not immediately, after a period of a few years.

132 points by brokenmusic 13y ago

My bet is that a lot of these are from users that are trying to leave mtgox for other exchanges since mtgox isn't paying out fiat.

brokenmusic 13y ago
Yes, and now they're not paying BTC either. 50k BTC (over 4k withdrawal attempts) are now stuck in limbo. MtGox claims it's a purely technical issue due to their custom implementation of Bitcoin protocol. People don't really believe that anymore, most (at this point) on IRC and Bitcointalk and Reddit think Gox doesn't have the money. Some haven't received their BTC after 13 days of waiting. MtGox hasn't released any official statement except this one: https://support.mtgox.com/entries/26128504-Update-Statement-Regarding-BTC-Withdrawal-Delays https://support.mtgox.com/entries/26128504-Update-Statement-... No proof of having enough funds, no explanation.
- cantbecool 13y ago
  Where is everyone going, coinbase?
  - brokenmusic 13y ago
    btc-e.com and Bitstamp, I guess.
  - contingencies 13y ago
    Kraken.com
    - siculars 13y ago
      Is kraken taking money in all States? Or just South Carolina which, I believe, is the only State they have a license in.
      - contingencies 13y ago
        There are regulatory limits on fiat transactions in some US states. The list of approved states has never been one state long, and the expensive and time consuming, US-specific process of acquiring state-by-state licenses for the remainder is well underway. Overseas, in more logically regulated places such as Europe and parts of East Asia, there's no such barrier.
  - SanderMak 13y ago
    kraken.com
  - Mtinie 13y ago
    Hopefully Vault of Satoshi's volume will pick up as a result. Top-notch infrastructure and things are communicated out to holders in a timely manner.
- ChuckMcM 13y ago
  I could make some smarmy remark about how good FDIC insurance is looking about now but at those levels (north of 30M$ equivalent) even banks have a hard time. So I'll pass. The reference page mentioned their "hot wallet" went dry (presumably it ran out of coin) and someone went to their offline storage and took out the USB stick with the offline wallet and will drive back into town and put some coinage into the account. I suppose if you knew who the Mt Gox folks were, and you had enough BTC you could try to 'stage' this ala Oceans 11 or the Italian job but given the challenge of moving really large quantities of BTC into fiat currency I'm not sure that makes sense. One of the things that is really fascinating about the BTC ecosystem is that all of this stuff happens visibly, unlike private banks where they just find the guy who embezzled the money shoot him and drop him off a pier or something.
  - pyalot2 13y ago
    The FDIC insurance funds only covers a small fraction of the liabilities of deposits. If one of the too big to fail banks fails, and isn't bailed out, depositors are gonna get Goxed.
    - hueving 13y ago
      FDIC covers up to $200,000 for each account.
      - hayksaakian 13y ago
        Approx 200 btc. Note the issues the parent mentioned were with 4k+btc transfers FDIC would not have saved them in USD
        Anderkent 13y ago
        Pretty sure the GP talks about 4k transactions, not transactions with 4k+ btc.
      - pyalot2 13y ago
        The FDIC covers up to $250k for each account. It does so using a fund that's about $50b, for a depositor liability of around $5t. If you do the math, that means around 1% of depositor liabilities are covered. There are over 5000 institutions covered, however JP Morgan Chase holds around $1t in deposits (20%), BofA holds around $2t (40%) and then the rest is divided up in the long tail of decreasing market share. This means that, if for instance BofA or JP Morgan Chase fails (that'd never happen, right?) that the liabilities alone of these banks are already 20x to 40x bigger than the entire FDIC fund. Please tell me you see the problem there.
deleted 13y ago
[deleted]

brokenmusic 13y ago

In short what MtGox should've done if this was really just a technical issue: 1. Stop all deposits until the issue is resolved. 2. Stop all withdrawals and then process all those that were already made - manually. 3. Only then try and fix the bug. 4. Reopen with no fees and some other nice things for customers. All steps should be accompanied by a statement explaining everything thoroughly. Even that course of action wouldn't necessarily restore confidence, but it wouldn't destroy their business. If they're not doing this, it means something else is up and they are not to be trusted. At this point, their business is done anyway (unless they do the steps above like right now). The question is, will people see their BTC. My bet is not. But who knows.

Anderkent 13y ago
1. How do you stop bitcoin deposits? You can't stop people from sending transactions to their deposit wallets. You can maybe stop processing them, but imagine the outrage that'd cause 2. I don't think they can undo the already sent coins. If it really is because of using coinbase outputs, the transactions will confirm eventually (100 generations = ~17 hours?). Sending the money again would cause a double withdrawal. 3. Why? The faster it's fixed the less issues for them
- brokenmusic 13y ago
  1. At the very least take down the option from the website. 2. There are no transactions on the blockchain. All withdrawals are stuck within MtGox. 3. People who withdrew money don't care about the fix, they care about getting their money back. Start paying now or say goodbye to your business. This is no game.
  - Anderkent 13y ago
    Oh, I thought the transactions were already broadcasted, just weren't being confirmed? edit: not on a blockchain means not confirmed. A transaction that's been broadcast but not confirmed yet is probably still in the transaction pool of some miners - as soon as it becomes valid, it might get confirmed even without the original sender rebroadcasting.

lucaspiller 13y ago

As a commenter on Reddit said "MtGox is not only a joke it's detrimental to Bitcoin's ecosystem.". How are people expected to take Bitcoin seriously when issues like this happen all the time?

brokenmusic 13y ago
I don't believe it's just "an issue" anymore. Not to spread FUD, as my coins are also stuck there, but MtGox is likely to go down now.
- lucaspiller 13y ago
  My point isn't whether it's an issue or something more in this case, but things like this don't happen with banks (at least not all the time [0][1]). With a bank you can be pretty confident you can go to an ATM and get your money out. If something does go wrong they will eventually sort it out. If something major goes wrong like them going bust your savings will be covered (at least in the EU, up to a point). Bitcoin services don't have any of these securities - it's akin to asking a bloke down the pub to hold on to £50 for you. [0] - http://www.dailymail.co.uk/money/saving/article-2168701/RBS-admits-Ulster-Bank-fiasco-fixed-mid-July.html http://www.dailymail.co.uk/money/saving/article-2168701/RBS-... [1] - http://www.dailymail.co.uk/news/article-2517106/NatWest-RBS-Cyber-Monday-meltdown-EMPTIES-customers-bank-accounts.html http://www.dailymail.co.uk/news/article-2517106/NatWest-RBS-...
  - makomk 13y ago
    With a bank, you can be pretty confident you can go to an ATM and get small amounts of money out, but even there we've seen system failures block withdrawals for longer than this one. Also, there's small daily ATM limits and at least one major British bank has a policy of refusing large cash withdrawals (several thousand pounds or more) full stop through any means unless you can prove to their satisfaction why you need that much cash: http://www.bbc.co.uk/news/business-25861717 http://www.bbc.co.uk/news/business-25861717

pyalot2 13y ago

The second it became apparent that Fiat withdrawal from Gox turned out to be problematic, it was clear nobody should have his assets on that exchange (that was over a year ago). Why? Well, according to Gox the Fiat withdrawal issues where caused by "ye olde banking system". But, you only had Goxes word for that. So considering all possibilities, including that they simply might not have the money, one needs to make a risk analysis, what would it mean if they didn't have the money? Well, if Gox doesn't have the Fiat to process Fiat withdrawals, it stands to reason that in an effort mitigate issues, they would exchange (themselves) customer funds between fiat <-> coins in order to try to weasel themselves out of the hole. So this means that any liquidity problem on either side (coins or fiat) would manifest itself on both sides (coins AND fiat). Once you can recognize that there's a risk that Gox might have liquidity problems, and that those problems can mean that you will not be able to withdraw your coins, there's only one logical conclusion. This conclusion you could have reached over a year ago, withdraw all funds in any way possible from Gox. And if you didn't do that, well, it sucks, a lot, been there, done that, consider it to be a valuable lesson about dealing with banks in general.

tlrobinson 13y ago
"But, you only had Goxes word for that." Roger Ver, who is well respected in the Bitcoin world, also posted this video: https://www.youtube.com/watch?v=UP1YsMlrfF0 https://www.youtube.com/watch?v=UP1YsMlrfF0 It's a little creepy though, like he's being held at gunpoint, forced to read a statement... I agree it's risky to keep money in a Bitcoin exchange that's showing signs of trouble.
- rytis 13y ago
  like he's being held at gunpoint, forced to read a statement Look at his eyes, he is actually reading the statement.
- pyalot2 13y ago
  You know, I saw that video when it came out (also known as the Roger hostage video). And somehow, strangely, it didn't give any more confidence in Gox. Yes, that video looks like Roger is held at gunpoint by his captors forced to read a statement. Obviously, that's not what happened. However I believe that Roger had a choice of how to deliver his statement. And obviously, if he had seen something to suggest that there would be liquidity problems, or if he was unconvinced, he couldn't have said so. Gox would've probably sued him in the ensuing bank run. Still, he went there, looked at it, and had to get the news out. So how to do it in a way, that doesn't make Gox sue him? Pretty much exactly how Linus did admit that NSA has approached him. Do it in a way to leave you least open to being sued, while still getting the message across. And that's exactly how many interpreted this statement of Roger.

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brokenmusic 13y ago
It already is a bank run, look at the charts. 50k Bitcoins in limbo. Over 10k added just overnight.
- BESebastian 13y ago
  So around £24.4mil? That's nuts.
  - brokenmusic 13y ago
    It's already over 55k BTC, added 5k in just a couple of hours. Probably gonna be 100k tomorrow.
    - Uchikoma 13y ago
      Nearly 63k BTC now.

Lerc 13y ago

I have heard multiple explanations for the delays, and I think there are multiple issues at play. Firstly it has been claimed that they have freshly mined coins stored undistinguished from others. If someone withdraws an amount that draws from an address with new coins, that withdrawal will be delayed. I'm not sure how those freshly minted coins get to MtGox in the first place (any such transfer would presumably be delayed). Assuming they do have freshly minted coins in their pools, That would be consistent of some short term delays. I have experienced delays that fit this model where a Hash for the transaction has been provided but the transfer does not arrive at the other end for a few hours. Anything affected by this mechanism shouldn't be delayed beyond 17ish hours. There are transactions not going though for longer periods, The transaction hash is being provided. I have seen claims suggesting that transactions are failing because of a subtle protocol incompatibility, which would explain the fairly random nature of the failed transactions. Lots of people are saying MtGox is out of funds and the sky is falling. The biggest problem with those claims is that people have been predicting the imminent demise of MtGox for quite some time. MtGox may be failing, but everything that happens cannot be a sign of imminent collapse if it keeps on going. I'm not sure if the claims of MtGox running a fractional reserve on the sly are very valid. I think it's more likely that they have technical issues, but the very nature of Bitcoin means that they could potentially lose all their bitcoin through technical issues alone. If you lose a private key or transfer bitcoin to an address with a lost key, those coins are effectively gone. If your software isn't behaving it's quite possible to make an automated money shredder. It's fairly obvious that at this point they need to do some fairly significant steps to demonstrate that they are in control of enough bitcoin. If they want to restore confidence in their ability to pay out, they should use Bitcoin's ability to demonstrate ownership to do just that. Restoring confidence in their ability to operate is going to be a longer road.

brokenmusic 13y ago
I think since they refuse to show evidence they have enough funds, it should be assumed it's a scam until proven otherwise. Really, they're making tons of money off fees, they are the most expensive exchange. Screwing customers like that is below acceptable. They're not just some paid app that can go down and customer won't be affected too much. It's money. Lot's of them. You can't refuse to pay and keep silence, otherwise you're a scammer.

fragsworth 13y ago

Mt.Gox needs to calm everyone down by signing a message from an address (or multiple addresses) that contain enough bitcoins to prove that they can handle the withdrawals. If they do not do this, we must assume that they are insolvent and have lost their customers' coins.

robzyb 13y ago
How would we know that they haven't just paid someone (with a lot of bitcoins) $20k to sign that message?
- brokenmusic 13y ago
  Why would that anyone holding a lot of coins need some incomparably small sum from MtGox while he can clearly make more selling it before the meltdown on other exchanges?
  - kalleboo 13y ago
    By propping up MtGox he'd be keeping the value of his Bitcoins up. If MtGox fails, there'll be a huge dip in the price of BTC across all the exchanges.
    - brokenmusic 13y ago
      He can also be the first to sell on another exchange and buy at the bottom. More profit, less risk.
- atmosx 13y ago
  You don't. But it's better then nothing at least as a PR. On the other hand, I know of no bank that could get it's head straight around a bank-run.
  - Mtinie 13y ago
    I would agree with you, in the context of the fractional reserve system. But in the case of a cryptocurrency exchange the credits and debits should be more or less equal, minus the trading fees. At least, that's how places like Mt. Gox promote themselves. It may take longer to get your funds, if there is a "run" on the exchange, because of the flood of transactions into the system and the need to reconcile everything, but that would likely be measured in a few hours extra, not days/weeks.

dash_riprock 13y ago

And I wondered why my fiat withdrawal has not reached my bank account for almost 2 months :-( Bugger.

patio11 13y ago
Gox's explanation is that the 2nd largest bank in Japan was so inundated by Gox's wire transfer volume that it could not possibly cope with it. An alternative hypothesis very popular in the community: Mt. Gox has been functionally insolvent since the US froze about $6 million in their accounts when they closed the US subsidiary for being a money laundering operation, and Mt. Gox has been delaying hard-currency withdraws to the majority of their customer base to buy time until their transaction fees make them solvent again. A point in favor of the alternative hypothesis: I don't have to be an idiot to believe it is true. Another hypothesis I'd grant greater than zero credence to: Bank: "We think you're a money transmitter." Gox: "Really!?" Bank: "Certainly looks like that." Gox: "We prefer to think of ourselves as a technical firm which is compliant with all the laws of Japan as long as nobody asks any pointed questions." Bank: "No technical firm requires more than, say, 10 outgoing wires per day. If you need more than that, we need to ask some pointed questions."
- dash_riprock 13y ago
  I fear your point 2 is right but your point 4 makes me laugh the most - which helps let me tell you. It was, as they say, to good to be true.
- kalleboo 13y ago
  > Gox's explanation is that the 2nd largest bank in Japan was so inundated by Gox's wire transfer volume that it could not possibly cope with it. Anyone who's banked in Japan wouldn't be surprised at all to hear that. This is a country where the only ATMs that take foreign cards are the ones at 7-11. All international transfers are performed by hand, on paper. They'll call you at home to ask you the reason for your transfer. What company other than Mt Gox sends out thousands of international wires per day? Everyone else has foreign subsidiaries to deal with that. And we all saw what happened when Mt Gox tried that... That said, that's no excuse for people to attempt to use them as a customer. The lack of transparency this far along into the problem has made me lose any faith in them as well. They seriously can't even give you a queue number and ETA on your transfer?

levosmetalo 13y ago

I still don't understand why are people keeping bitcoins on MtGox in the first place? It's not like they are going to get any interest from MtGox from doing so. If you need to buy/sell bitcoins then just send them to MtGox and retrieve immediately after transactions. Just keeping money, either virtual or real in someone elses wallet is not a good idea, especially if you don't get any benefit, only potential risk. I'm not blaming the victims here, just can't understand the reasoning behind. Then again, I have never used MtGox, so I might have been missing something.

brokenmusic 13y ago
Trading. Some people trade.
- Mtinie 13y ago
  That accounts for some of the people who use the exchange that way, but I'm not sure it applies to most of the funds that have stayed out there.
- jnbiche 13y ago
  Volume on Bitstamp has been adequate for trading for sometime now.
- levosmetalo 13y ago
  I said "except for trading". As "money/coins in", "buy/sell", "coins/money out". Still not understand why keeping it there.

chmike 13y ago

Possible insider information on close to come hit on BTC. Or big players want to secure their money after a good profit from BTC value raise and move to avoid a burst on the BTC speculation bubble.

marxdeveloper 13y ago

My account and all the funds seem to be frozen, I kept them in $. When I log in it shows me: Your account has been restricted from accessing funding options. Please contact support@mtgox.com for additional information on why your account has been restricted. I've tried contacting their support, but no luck so far. I have never used BitInstant and I was verified before. Anyone else having similar issues?

wfn 13y ago
Try hopping onto the official #mtgox support channel on freenode and asking ne0futur and/or others.
- haakon 13y ago
  Just be very careful not to sound frustrated or impolite, or they'll kickban you immediately. It's getting pretty tense in there.
  - FireBeyond 13y ago
    No kidding. I own no BTC, but jumped in there just to have a look, and it's testy and tense. Staff jumping on anything that sounds vaguely negative, even if not directly related: [09:19:42] <Asmiran> if the bug is caused by known reason [09:19:55] <Asmiran> it should take not that long time to solve the problem [09:21:36] <@SarahCoinBit> Asmiran that is your opion, don't pass it off as fact (even though the logic was flawed, admittedly)

laichzeit0 13y ago

This isn't the first time this happened. Three months ago I had BTC withdraw problems [1] with MtGox. It took them about 5 days to send my money. That's when I decided "fuck this shit" and moved to BitStamp. The difference between how the two exchanges operate is night/day. Even if they have legitimate technical problems, it's just not worth using them. Don't get Gox'd, use a better exchange. [1] https://news.ycombinator.com/item?id=6688659 https://news.ycombinator.com/item?id=6688659

jschmitz28 13y ago
> Don't get Gox'd, use a better exchange. Interestingly, a bug (and maybe margin trading exploit) took down trading on Bitfinex earlier tonight and withdrawals are currently halted. Before this I've never had any issues with the exchange. The last few months dealing with bitcoins have made me realize how important it is to have your money insured.

jcfrei 13y ago

Does anybody know what happens to funds on mtgox in case they go bust? Is there some kind of deposit insurance? I sold all my bitcoins but I've still got quite a lot of fiat on that account (USD) and losing it would really piss me off.

patio11 13y ago
I'm going to assume this question is being asked in good faith. Mt. Gox is not covered by the formal or informal guarantees to make creditors whole which the Japanese government customarily extends to regulated depository institutions. Mt. Gox has been, let me be delicate, cagey about their extent of involvement with Japanese regulators. Should Mt. Gox abscond with your money, you will certainly have civil torts available. You can pursue them in any court of competent jurisdiction in Tokyo. This will take 3 to 5 years and cost you several hundred thousand dollars. I'll save your competent legal representative some time and cut to the chase: vindication in court will not enable you to recoup a single yen.

paulpw 13y ago

From: https://bitcoinfoundation.org/forum/index.php?/topic/700-mtgox-insolvency/page__hl__mtgox https://bitcoinfoundation.org/forum/index.php?/topic/700-mtg... " Mt Gox has a custom reimplementation of Bitcoin that is known to be quirky and non-compliant in a bunch of ways, for example, it used to overlook the coinbase maturity rule. That means miners who use custom software to send money to MtGox immediately, without waiting for confirmation, didn't get spotted by the MtGox software. When they tried to respend the newly mined money, the transactions failed to propagate. I don't know if that specifically is still an issue, but the MtGox scanner site suggests that their implementation fails to implement a bunch of other edge case rules around fees, sizes, and canonical signatures. It seems very likely to me that for some reason Mark K is not able to work on his codebase anymore, and isn't able to resolve bugs in a timely manner, leaving his support staff to try and clean up the mess by making horrible hacks like "throw away and retry later". The question in my mind then becomes - where is Mark and what is he doing? "

TomGullen 13y ago

Why anyone was using Gox in the first place confuses me. It's been having trouble for over a year now I think? Lots of warning signs, yet people continued to use them. If anyone had done cursory research before buying Bitcoin (and they should of) they would of read a wealth of horror stories and bad signs about MtGox. It didn't even make sense to use them as a new user, the price of BTC was considerably more expensive than other exchanges! I think in part it's caused by the media always refering to MtGox for price information as they have the longest historical data and inadvertently providing MtGox with a lot of free promotion. I wonder how sites like eToro who allow you to trade Bitcoin pegged on MtGox price will be impacted if MtGox really is insolvent. To me the simplest explanation for all the problems MtGox is suffering is that they are insolvent.

peteretep 13y ago
> Why anyone was using Gox in the first place confuses me Sell price was ~$100 more on MtGOX than on other exchanges. If you have ten bitcoins you want to sell, that's $1,000 more if you're willing to wait 6 weeks for MtGOX to send you your money.
- Mtinie 13y ago
  I don't know anyone who has been able to pull USD out of Mt. Gox for months. The reason it was +$100/BTC on Gox vs. other exchanges was the people were paying a premium to get their current fiat holdings converted into something that they could pull out. Now that avenue is apparently closed, too, so it will be interesting (to say the least) to see how this plays out.
- pmorici 13y ago
  That's the thing though there was no evidence that they were sending anyone any money at least not in USD.

captaincrunch 13y ago

Seeing customers get this treatment is exactly why I created my own exchange, in fact there are so many alternatives nobody should be using Mt. Gox anymore. So many good alternatives: VaultOfSatoshi.com, Bitstamp.com, Kraken.com, etc..

infruset 13y ago

I have just been able to withdraw 0.3 BTC.

pjc50 13y ago

Just as "all political careers end in failure", so all Bitcoin exchanges end in collapse. You have all the problems of a normal bank run, and* the problems of being a regulatory gray area, and no political or regulatory bailout mechanism available. There is also the constant risk of technical failure or criminal activity losing all your assets beyond all possibility of recovery. * Eventually. Not immediately, after a period of a few years.