nice little gem
Yeah, and who is the most likely suspect to take advantage of the malleability. Now, I'd prob notice a $750MM debit from my checking account. That dbag Karpeles was either involved in the theft or lied about it for over a year.
Gox closes down, good bye you magnificent bastard
- Thread starter Pekelo
- Start date
Yeah, and who is the most likely suspect to take advantage of the malleability. Now, I'd prob notice a $750MM debit from my checking account. That dbag Karpeles was either involved in the theft or lied about it for over a year.
That is true, but you didn't cash out of your Litecoins while waiting for the Gox resolution, did you? That would have been the smart thing to do and buy back when the obvious crash happens...
The bottom line is that the swings are fairly predictable and easy to play....
This email sent out the day before the destruction of Mt. Gox. "All your Bitcoins are safe and highly secured."
HEY! You gotta cut us mods in that deal!
Sheesh, some people. Freakin' low lifes!
Breaking news (the whole Gox saga) is coming soon from twobitidiot, who broke the previous leaked document. Here is his blog:
http://two-bit-idiot.tumblr.com
http://two-bit-idiot.tumblr.com
The CEO of Kraken who personally knowns Karpeles has his own theory:
http://jesse.forthewin.com/blog/201...ked-up-shit-and-the-greater-good.html?cpm=329
Basicly he is saying, Gox was running a fractional reserve business because they had been robbed a long time ago and they were trying to make this up...
" If I assume that the Crisis Strategy Draft is truthy, a scenario like this is more plausible than what we've been fed:
1.Gox was robbed of a massive amount of coins (800k+) at some prior point in time, possibly June 2011, and has been operating a fractional reserve since.
2.Gox determined that it was better to continue operating the exchange, probably both for the sake of Bitcoin, and for their customers who would eventually be made whole from fees earned.
3.Gox knew of transaction malleability and had been keeping that scapegoat in their back pocket to use in the event of a bank run. Or, they didn't know but the losses from TM were actually recent and minor. Or, they didn't know but the losses from TM occurred over a long period of time and they never noticed because they never reconciled the books, because they knew they wouldn't match anyway because they were already fractional.
4.Fiat withdrawal problems led to an increased uptick of BTC withdrawals, outpacing BTC deposits and draining reserves to 0. This may have been compounded by an actual problem with transaction malleability that accelerated the process.
5.Gox spent its fiat reserves and customers' fiat reserves to buy up BTC in order to keep the ship afloat until they could launch their rebranded Gox.com and Bitpocket wallet, which they'd hoped would provide more runway in the form of additional BTC deposits.
6.Gox doesn't make it happen in time and is forced to shut down, negative on fiat by millions and having lost all BTC."
--------------------------------
So in plain English, if the hack was done years ago, Gox was nothing but a Ponzi since then. As long as new customers were coming in with their reserves, the show could keep going on, but once that stopped, the pyramid has fallen....
http://jesse.forthewin.com/blog/201...ked-up-shit-and-the-greater-good.html?cpm=329
Basicly he is saying, Gox was running a fractional reserve business because they had been robbed a long time ago and they were trying to make this up...
" If I assume that the Crisis Strategy Draft is truthy, a scenario like this is more plausible than what we've been fed:
1.Gox was robbed of a massive amount of coins (800k+) at some prior point in time, possibly June 2011, and has been operating a fractional reserve since.
2.Gox determined that it was better to continue operating the exchange, probably both for the sake of Bitcoin, and for their customers who would eventually be made whole from fees earned.
3.Gox knew of transaction malleability and had been keeping that scapegoat in their back pocket to use in the event of a bank run. Or, they didn't know but the losses from TM were actually recent and minor. Or, they didn't know but the losses from TM occurred over a long period of time and they never noticed because they never reconciled the books, because they knew they wouldn't match anyway because they were already fractional.
4.Fiat withdrawal problems led to an increased uptick of BTC withdrawals, outpacing BTC deposits and draining reserves to 0. This may have been compounded by an actual problem with transaction malleability that accelerated the process.
5.Gox spent its fiat reserves and customers' fiat reserves to buy up BTC in order to keep the ship afloat until they could launch their rebranded Gox.com and Bitpocket wallet, which they'd hoped would provide more runway in the form of additional BTC deposits.
6.Gox doesn't make it happen in time and is forced to shut down, negative on fiat by millions and having lost all BTC."
--------------------------------
So in plain English, if the hack was done years ago, Gox was nothing but a Ponzi since then. As long as new customers were coming in with their reserves, the show could keep going on, but once that stopped, the pyramid has fallen....
And maybe the other bitcoin exchanges are having the same problem too, and will shut down soon, one by one.
Who knows....
Yeah, it's absolutely the most plausible. Karp is going to do hard-time.
It was posted 4 hours ago, but it is mostly just more details, nothing new really. There is a leaked business report from January. For newcomers, Gox is located in Tokio, but incorporated in Delaware and run by 2 Frenchmen. ( Karpeles and colleague Gonzague Gay-Bouchery)
When some other firms (SecondMarket, Blockchain.info)) to whom Gox was offered for sale learnt about the size of the fraud, they contacted the Southern District of New York DA, thus a criminal investigation is under way from the US....
I am not getting why Karpeles couldn't make up the loss from the commissions? They were charging 0.5% and their volume was highest for months....
Here is a very good prediction from a month ago by a smart redditor, warning that insider trading could be going on at other exchanges:
http://www.reddit.com/r/BitcoinMark...ily_discussion_sunday_january_19_2014/cetk51b
" tl;dr - drip bots are run not by traders, but by exchanges mimicking traders to steer the market out of stagnant (and unprofitable) conditions. This behavior along with various other fiat-related shenanigans strongly suggests that Bitcoin exchanges may be standing on alarmingly thin financial ice."
It is official now:
"TOKYOâBitcoin exchange Mt. Gox said it was filing for bankruptcy protection and that 750,000 of its customers' bitcoins and 100,000 of its own had been lost.
At market prices charted by the CoinDesk bitcoin index, that would represent a loss of $473 million.
The company's lawyer also said at a news conference at the Tokyo District Court that Mt. Gox had outstanding debt of about ¥6.5 billion ($63.6 million) with assets worth ¥3.84 billion."
----------------------
There are indications that all those 750K coins are not missing completely but unreachable for various reasons, like either government seizure or lost private keys...
"TOKYOâBitcoin exchange Mt. Gox said it was filing for bankruptcy protection and that 750,000 of its customers' bitcoins and 100,000 of its own had been lost.
At market prices charted by the CoinDesk bitcoin index, that would represent a loss of $473 million.
The company's lawyer also said at a news conference at the Tokyo District Court that Mt. Gox had outstanding debt of about ¥6.5 billion ($63.6 million) with assets worth ¥3.84 billion."
----------------------
There are indications that all those 750K coins are not missing completely but unreachable for various reasons, like either government seizure or lost private keys...