Topic: Discuss: Do you think Gox is intentionally trying to damage BTC? (Read 8401 times)

At least we know what the plan was now, God I wouldn't want to be in the boots of somebody holding a bunch of zeros from Gox

Looks like mtgox deleted there support site with zendesk.  Not sure what this means but support.mtgox.com is no longer there you get the following message displayed.

No help desk at support.mtgox.com
There is no help desk configured at this address. This means that the address is available and that you can claim it at http://www.zendesk.com/signup/

I don't know how profitable you guys think the trading fees are; they can't just simply "cover" $5 million USD seized by the FBI and continue to pay their normal operating expenses...

I don't know their level of actual expenses but I do know that in business your expense is a sliding scale; the more you make, the more it costs to stay in business... Financial exchanges operate on less than 1% Net Profit per year after all is said and done...

Let's just run a little financial simulation for speculation purposes. These are the conditions:

- Assume you need to pay off $5 million USD and still have enough for regular operating expenses.
- Assume you can operate at a 90% Gross Profit after operating expenses. (On average, for Every $111 of Gross Income you spend $11 on regular Operating Expenses leaving $100 left over.)
- Trade commission is 1.2% total for each transaction.
- All debts rely on new incoming USD as the older pre-existing accounts were forfeited.


To become solvent:

$5,000,000.00 (Gross Profit) = [$504,583,333.33 (Volume of Trade) * 1.2% (Trade Commission)] - $1,055,000.00 (Normal Operating Expenses @ 90% Gross Profit Ratio)

Net Profit @ 1% of Gross Income (not Gross Profit) = $60,550.00 per year.

It would take 82.5 years to cover the loss at that pace. If the volume of trade would bump up to say, $5 Billion it would be 8 years, and at $50 Billion would take 0.8 years...


Most financial exchanges deal with Hundreds of Billions of Dollars per year in volume... 1% start's to look pretty good there.


On top of all this; enough new USD will need to be transferred in monthly just to cover the expenses in order to stay in operation until they have enough time to recover. Even if old accounts are traded back and forth so rapidly that the volume of trade was a trillion Gox Bux they still wouldn't have any USD to spend unless it's transferred in from outside of the exchange.

Regardless of how they choose to apportion the minimal amount of USD transferred into Gox's account daily they are probably insolvent and operating on borrowed time and money... They wouldn't likely be able to pay their obligations right now anymore than they could squeeze blood from a turnip.

It's not an insurmountable problem given enough time, very careful spending, and solid growth of Bitcoin... Unless the incoming USD deposits slow down...

Basically, they've been skating on very thin ice and when people stopped sending in USD and just sent Bitcoin it put them under tremendous financial pressure. They likely cover expenses by selling coins on other exchanges to compensate for the decrease in USD deposits...

I think they are insolvent.

Mark spent everyone's BTC on a golden swimming pool filled with coffee milkshake.

They are far from insolvent. What is happening is quite simple, they are taking full advantage of rock bottom prices and idiots selling and profiting from it. This same thing they've done dozen of times and many lost money and a lot of people made a lot of money. They are riding they wave, although quite illegal one but since for now there is no regulation why not make shitload of money from this little panic sell off. Few weeks from now, all prices will be back to normal and just as usual everyone will look back at this and laugh. This is only going to go on for short while longer until enough people complain and regulators step in then all this easy money business will be done and done.

Those SR2 coins came up missing/stolen at about the same time, did they not?  Who's to say Mark didn't have something to do laundering those for them?  And using his customer monies to do so would not be legal or ethical, as he's not paying interest.  But maybe $0.10 on the dollar was too tempting for ole fatboy.

Furthermore, the malleability issue is known for like 3 years and had been on the Wiki for 1 year.  So suddenly when the SR2 coins are known to be on the move, it suddenly becomes an issue?  Give me a break!  He may well have laundered those coins from SR2 and used transaction malleability as a cloak for the laundering.  The whole thing stinks to high heaven. But it's a familiar stench coming from GOX, given their previous escapades.  These guys are dishonest players.

Remember -- Mark Karpeles isn't in Japan because he's Japanese.  He's there for regulatory arbitrage.  Never forget that.  He KNEW the price was going to fall because of his announcement.  And he no-doubt took advantage of his ability to move markets with his announcements -- regardless of the fact that it was a 3 year old known issue of limited significance to any exchange who tracked internally properly.

TL:DR

He may well have shorted BTC using his customers' coins/money,  AND/OR laundered SR2 coins.

I'd bet $100 Mark knows EXACTLY what happened here:
https://blockchain.info/charts/bitcoin-days-destroyed-min-year?timespan=7days&showDataPoints=false&daysAverageString=1&show_header=true&scale=0&address=

I agree, he should be replaced by that dude who went to jail for posting explosives through the US mail.

Or that one guy who allegedly is a paedophile.

So many choices of figurehead.

Your post made me laugh, so I'm not sure if you're also making fun of the coffee now.

In case you were serious, I insulted him over his desert-like coffee because this is the type of drink girls would drink at my middle school and high school.

Do we really want someone who has the same beverage choice as a teenage girl to be representing Bitcoin?

"The situation surrounding Mt. Gox has led some investors to believe it is teetering on the edge of bankruptcy and that bitcoins on the exchange may become worthless.

Discussion on Bitcointalk.org, an online forum, touched on the office move, as well as questions about whether Mt. Gox was going to collapse or is a Ponzi scheme, or is intentionally trying to destabilize the digital currency. One participant suggested Mt. Gox is “sabotaging” the currency for someone’s personal benefit."

Made my day.

SSL error, cool.

This post made the news, it was linked here: http://www.pcworld.com/article/2100100/mt-gox-bitcoin-price-falls-below-100.html

those where the days, when I got up and made a large home made Iced coffee every morning

To the ground? Impossible.

They just seem to take all the events lightly..barely caring about them lol

JED SAVE US!

interesting points. ok, if mt.gox is intentionally trying to damage btc, then all it means is it's not gonna end yet. it could go on until btc is down on the ground.  or at least they'll try to.

Incompetent to do pretty much anything.

If there was a big dump of coins or a series of dumps on the run-up to the fiasco, then Gox might have known they could sell high, impact the market and buy-back cheap.

Sorry to say it, but this is what regulators do. If someone intentionally manipulates the market, they go to jail. 

Yeah, yeah, yeah. I know - I'm scum for mentioning regulation.  On the flip side, $3-$5bn USD has been wiped off the price of Bitcoin in the last few months and probably double that in reputational and brand damage.

You can go to jail for stealing $100 from a cash register; losing $3-$5bn gets you hate mail.

Maybe we should collaborate with the miners, and skim 10% from every bitcoin address and bail MtGox out.

Edit: Crap, got beaten to the joke

They're too incompetent to intentionally damage BTC.