Bitcoin exchange Mt. Gox disappears in blow to virtual currency

Discussion in 'General Discussion' started by stg58, Feb 25, 2014.

  1. stg58

    stg58 Monkey+++ Founding Member

    Wow, this further reinforces my fear of virtual currency.

    TOKYO (Reuters) - Mt. Gox, once the world's biggest bitcoin exchange, looked to have essentially disappeared on Tuesday, with its website down, its founder unaccounted for and a Tokyo office empty bar a handful of protesters saying they had lost money investing in the virtual currency.

    The digital marketplace operator, which began as a venue for trading cards, had surged to the top of the bitcoin world, but critics - from rival exchanges to burned investors - said Mt. Gox had long been lax over its security.

    It was not clear what has become of the exchange, which this month halted withdrawals indefinitely after detecting "unusual activity." A global bitcoin organization referred to the exchange's "exit," while angry investors questioned whether it was still solvent.

    A document circulating on the internet, and purporting to be a crisis plan for the exchange, said more than 744,000 bitcoins were "missing due to malleability-related theft", and noted Mt. Gox had $174 million in liabilities against $32.75 million in assets. It was not possible to verify the document or the exchange's financial situation.

    Bitcoin exchange Mt. Gox disappears in blow to virtual currency - Yahoo News
    Gator 45/70 likes this.
  2. stg58

    stg58 Monkey+++ Founding Member

  3. NotSoSneaky

    NotSoSneaky former supporter

    As heard on another forum:

    If you don't hold it, you don't own it.
    Mountainman, VisuTrac and stg58 like this.
  4. HK_User

    HK_User A Productive Monkey is a Happy Monkey

    Smoke and Mirrows!
  5. stg58

    stg58 Monkey+++ Founding Member

    My coins....
    Mountainman, Brokor and VisuTrac like this.
  6. stg58

    stg58 Monkey+++ Founding Member

    This seems to be the crux of the biscuit....

    The truth, it turns out, is that the damage had already been done.
    At this point 744,408 BTC are missing due to malleability-related theft which went unnoticed for several years.
    The cold storage has been wiped out due to a leak in the hotwallet.The reality is that MtGox can go bankrupt at any moment, and certainly deserves to as a company. However, with Bitcoin/crypto just recently gaining acceptance in the public eye, the likely damage in public perception to this class of technology could put it back 5~10 years, and cause governments to react swiftly and harshly. At the risk of appearing hyperbolic, this could bethe end of Bitcoin, at least for most of the public

    MtGox Situation: Crisis Strategy Draft
    Last edited: Feb 25, 2014
  7. BTPost

    BTPost Stumpy Old Fart,Deadman Walking, Snow Monkey Moderator

    I would be interested to know, how many Monkeys have BitCoins invested in Mt.Grox? If there are any, Do they expect to get ANYTHING back, on that investment, or from that Investment? Just Wondering.....
  8. stg58

    stg58 Monkey+++ Founding Member

    Another question would be what recourse is there for members of Mt. Gox? What government agency in what country do you file claim/suit? Most governments don't like BitCoin so how aggressive will they be?
    This guy ran it and bailed on Sunday if he is sitting in Dubai with a ton of real cash who goes after him?

  9. HK_User

    HK_User A Productive Monkey is a Happy Monkey

    WHY? Would I want a Bit Coin?
  10. VisuTrac

    VisuTrac Ваша мать носит военные ботинки Site Supporter+++

    And i just picked some fractional [btc] from a coworker wanting out.
    And no, I don't have any at Gox. Actually anyone that did, doesn't any more bwahahahaha
  11. VisuTrac

    VisuTrac Ваша мать носит военные ботинки Site Supporter+++

    most of the bitcoiners have been avoiding gox for quite awhile now.
    they have been in death throws for probably over a year.
    Only those not paying attention will have missed it.

    and no, most of those that are in there have or should be reserved to getting $0 on the dollar.
  12. Gator 45/70

    Gator 45/70 Monkey+++

    Electronic Sheeple's ?
    Mountainman and VisuTrac like this.
  13. stg58

    stg58 Monkey+++ Founding Member

    The Mt. Gox BitCoin owners will wait years and get penny's on the dollar at best...

    My response was to buy more silver....
    Mt. Gox files for bankruptcy, hit with lawsuit

    Mt. Gox files for bankruptcy, hit with lawsuit| Reuters

    (Reuters) - Mt. Gox, once the world's biggest bitcoin exchange, filed for bankruptcy protection in Japan on Friday, saying it may have lost nearly half a billion dollars worth of the virtual coins due to hacking into its faulty computer system.

    The collapse caps a tumultuous few weeks in which the company has remained virtually silent after halting trades of the crypto-currency, shaking the nascent but burgeoning bitcoin community.

    Wearing a suit instead of his customary T-shirt, Mt. Gox's French CEO Mark Karpeles bowed in contrition and apologized in Japanese at a news conference at the Tokyo District Court, blaming his firm's collapse on a "weakness in our system", but predicting that bitcoin would continue to grow.

    "First of all, I'm very sorry," he said. "The bitcoin industry is healthy and it is growing. It will continue, and reducing the impact is the most important point."

    Angry investors have been seeking answers for what happened to their holdings of cash and bitcoins on the unregulated Tokyo-based exchange.

    Gregory Greene, who estimated his bitcoin stake at $25,000, filed a lawsuit in the U.S. District Court in Chicago late on Thursday, saying Mt. Gox had failed "to provide its users with the level of security protection for which they paid.

    Baker & McKenzie, a Chicago-based law firm that represents Mt. Gox, declined to comment. It is not yet clear if the firm is representing the exchange in this lawsuit.

    Mt. Gox said the exchange, used overwhelmingly by foreigners, had lost 750,000 of its users' bitcoins and 100,000 of its own. At the current bitcoin price of about $565, that would total some $480 million - representing about 7 percent of the estimated global total of bitcoins.

    "This may be telling for the level of traceability of the transactions. Bitcoin has been telling us that it is more traceable than cash. The question is, how much more and is there the potential for real recourse in the case of theft," said Moshe Cohen, assistant professor at Columbia Business School in New York.

    Mt. Gox said there was a discrepancy of 2.8 billion yen ($27.4 million) in its bank accounts when it checked on Monday. Junko Suetomi, a lawyer with Baker & MacKenzie, said she could not comment on the balances of foreign bank accounts held by the company.


    Many bitcoin market participants have said Mt. Gox's problems were specific to the company and were caused by what they said was a lax attitude by Karpeles, while bitcoin itself - free of any central bank control - was still a noble venture.

    "If we could agree on legal regulation, we should let (bitcoin and regulators) co-exist," said Keiichi Hida, a bitcoin investor and member of the Japan Digital Money Association. He lost about 100,000 yen worth of bitcoins, but seemed unconcerned as he became interested in the virtual currency as a form of "study".

    "We should make it a national project to have bitcoin used nationwide at the time of the 2020 Tokyo Olympics," he said.

    Mt. Gox shut its website on Tuesday after freezing withdrawals earlier this month in the wake of a series of technical difficulties.

    The exchange had liabilities of 6.5 billion yen ($63.67 million), dwarfing its total assets of 3.84 billion yen, the company said. It had 127,000 creditors in bankruptcy, just over 1,000 of whom are Japanese.

    The company and Karpeles have said little in the days before Friday's court filing, which is similar to Chapter 11 bankruptcy in the United States, except that they were working with others to resolve their problems.

    Another lawyer, Akio Shinomiya at Yodoyabashi and Yamagami, said Mt. Gox wanted to file a criminal complaint against what he said was a hacking attack, but had no specific means of doing so.

    "Bitcoin has always been volatile and speculative, said bitcoin user Ken Shishido, who had about a tenth of his bitcoin holdings at Mt. Gox, but has seen the rest of his bitcoins soar tenfold since he began trading 18 months ago.

    "It's too bad that this happened, but we have to let it go. And then we'll buy more."

    Fortress Investment Group became one of the first big investors to say it had lost money investing in bitcoin. In a regulatory filing with the U.S. Securities and Exchange Commission, the company said it incurred $3.7 million in unrealized losses in 2013.

    (Here is a list of related stories on bitcoin and the collapse of Mt.

    (Additional reporting by Nathan Layne and Emi Emoto in Tokyo, and Jonathan Stempel, Emily Flitter and David Gaffen in New York; Writing by William Mallard; Editing by Ian Geoghegan)

    Chinese response.

    Chinese investors rushed to buy bitcoin, seeing it as potentially undervalued, after the value of the virtual currency fell following the shutdown of the Mt Gox bitcoin exchange this week.

    Since Tuesday, more than 30,000 bitcoins have changed hands in China. That’s four times the usual trade volume, and compares with just 300 exchanged in the United States.

    Read more at Mt Gox exchange shutdown sparks Chinese bitcoin gold rush | Max Keiser
    Last edited: Feb 28, 2014
  14. VisuTrac

    VisuTrac Ваша мать носит военные ботинки Site Supporter+++

    This is better than any roller coaster ride. YMMWV.
  15. mysterymet

    mysterymet Monkey+++

    The only alternate currency I want is the kind I can hide in the backyard "safe".
  16. HK_User

    HK_User A Productive Monkey is a Happy Monkey

    Reminds me of the Gold Market in the 1980s.

    A bird in the hand is worth two in the briar patch.
  17. VisuTrac

    VisuTrac Ваша мать носит военные ботинки Site Supporter+++

    Lots of peeps lost huge real dollars in that exchange.
    even with all the scandal surrounding Mt. Gox (was Mount Gox .. but should be Empty Gox) BitCoin prices have been trading in a pretty tight range for the past couple of weeks .. but trending lower.
    Too many folks put all their eggs in one basket. I mean seriously, someone put their life savings in there. I like risk but going all in with a pair of deuces before the flop .. too much for me.
  18. kellory

    kellory An unemployed Jester, is nobody's fool. Banned

    now just to play devil's advocate, what if the hacker attack came from the banks?;)[tf]
  19. BTPost

    BTPost Stumpy Old Fart,Deadman Walking, Snow Monkey Moderator

    Well someone made a "Killing" and with all the Coins NOW, nonExistant, unraveling the Trading is going to take a Forensic Accountant, with TONs of Encryption and Computer Expertise, Years to track, even if the folks that did make withdrawals, ALLOW the Accountant to examine their end of the Transactions, in Question. I would bet we are talking ZERO Recovered Assets. .....
  20. HK_User

    HK_User A Productive Monkey is a Happy Monkey

    Or China!
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