Topic: *DJ Mt. Gox Lawyer: Filed For Bankruptcy Protection Y6.5B Debt - updated (Read 18319 times)

http://techcrunch.com/2014/03/09/mt-gox-hack-allegedly-reveals-bitcoin-balances-customer-account-totals/

Thanks for the comprehensive timeline.

As for the below quote


I think that is pretty standard in voluntary bankruptcy proceedings. No matter how many Bitcoin is left to pay to creditors, if MtGox is open for business they can use any proceeds to increase repayments. If they stay closed, then whatever is left is whatever can be used for repayments.

I wouldn't read too much into it. Certainly not that it means the 740.000 BTC will be made available once they re-open.

http://pastebin.com/jES4zEuf

April 12, 2013 Mtgox starts an AMA on reddit.  States 90-95% of coins are cold storage and does not run a fractional reserve. (either we assume he is solvent here or he’s been running a fractional reserve since June 2011’s hack)
http://www.reddit.com/r/Bitcoin/comments/1c7ahh/we_are_mt_gox_ama/c9dpwct
https://www.facebook.com/MtGox/posts/443093862439476 (proof of date of AMA)
https://bitcointalksearch.org/topic/m.1177353 (security practices dated 9/10/12)

May 14, 2013 Mtgox’s dwolla account is seized by Dept of Homeland Security for violating money transfer regulations.  (it is revealed in Nov 2013 that the real motivation for the seizure was part of a larger operation to take down Silk Road)
http://techcrunch.com/2013/05/16/mt-gox-dwolla-account-money-seizure/
http://thegenesisblock.com/mt-gox-seizures-linked-silk-road-fed-testimonies/

May 30, 2013 Mtgox now requires all users who deposit or withdraw fiat to verify their accounts.
“Until now, Mt. Gox has tried to strike a careful balance between anonymity and money laundering laws, allowing anyone making trades under $1,000 to do so without a verified account and only demanding identification for larger trades. “
http://techcrunch.com/2013/05/16/mt-gox-dwolla-account-money-seizure/

October 2, 2013 Dread Pirate Roberts (DPR) is arrested and Silk Road is shut down.
http://www.forbes.com/sites/alexkonrad/2013/10/02/feds-shut-down-silk-road-owner-known-as-dread-pirate-roberts-arrested/

Dec 20, 2013 Three Silk road 2.0 employees are arrested in a global coordinated crackdown on the darkweb drug marketplace.
http://www.forbes.com/sites/andygreenberg/2013/12/20/at-least-two-moderators-of-the-silk-road-2-0-drug-site-forums-arrested/
http://www.forbes.com/sites/andygreenberg/2013/12/20/feds-indict-three-more-alleged-employees-of-the-silk-roads-dread-pirate-roberts/

Dec 21, 2013 131,000 bitcoin days destroyed.
https://blockchain.info/charts/bitcoin-days-destroyed-min-year?showDataPoints=false&show_header=true&daysAverageString=1×pan=&scale=0&address=
http://www.reddit.com/r/Bitcoin/comments/1tfcad/there_were_an_awful_lot_of_bitcoin_days_destroyed/?utm_medium=twitter&utm_source=Fancy+Show+Tech

Jan 26, 2014 Charlie Shrem is arrested for money laundering for Silkroad using his company Bitinstant in connection with Mtgox.
“Shrem then filled the orders by transferring funds into an account controlled by Faiella and hosted on a third-party, Japan-based Bitcoin exchange. Together the two allegedly sold over $1 million in bitcoins to Silk Road users,”
http://business.time.com/2014/01/27/bitinstant-ceo-charlie-shrem-arrested-for-alleged-money-laundering/
 
Jan 30, 2014 date of meeting between Japanese Mizuho bank and Karpeles.  Karpeles acknowledges Bitinstant users are being investigated and that he's investigating money laundering cooperatively with us gov.  Banking representative informs Karpeles they will be closing his Mtgox account soon.  Karpeles asks why since he is following all rules and regulations but receives vague answers.  Jan 30, fits the timeline of banking issues after Shrem got arrested.
http://picosong.com/Y7di/ (original audio) (audio file was leaked anonymously on March 3, 2014)
http://www.reddit.com/r/Bitcoin/comments/1zepgt/mark_apparently_leaked_conversation_with_a_bank/cft1kgq (japanese conversation is translated)

Sometime between Feb 1- Feb 24 DOJ issues subpoena to Mtgox.  http://www.businessinsider.com/report-mtgox-subpoenaed-by-us-prosecutor-2014-2
 
Feb 5, 2014  former bitinstant users are now required by gox to verify id by mailing notarized documents by mail to Japan.
http://www.reddit.com/r/Bitcoin/comments/1wyrdu/mt_goxs_ridiculous_new_documentation_requirements/

Feb 5, 2014 reddit user ‘coinsearcher’ flies to Mtgox headquarters and confronts Gonzague Gay Bouchery to question where his bitcoins are.
http://www.reddit.com/r/Bitcoin/comments/1x9gue/my_protest_at_mtgox_offices_5_to_7th_february

coinsearcher tells us his attorney friend sent him info suggesting the US authorities is ‘squeezing’ Mtgox.
http://www.reddit.com/r/Bitcoin/comments/1x9gue/my_protest_at_mtgox_offices_5_to_7th_february/cfberiu

Feb 6, 2014 135,000 bitcoin days destroyed an unusually large transfer of coins (potentially to the DOJ?)
https://blockchain.info/charts/bitcoin-days-destroyed?timespan=30days&showDataPoints=false&daysAverageString=1&show_header=true&scale=0&address=

coinsearcher adds more detail on his conversation with Gonzague further implying there is a criminal investigation that is related to the inability to release bitcoins for withdrawal.
“If you look at the bitcoin days destroyed in the weeks / days leading up to the withdrawal suspension, there are two huge spikes. If you assume these coins moved had a medium age of 1 year, you get almost 730,000 BTC. i.e. divide the total days destroyed by 365. https://blockchain.info/charts/bitcoin-days-destroyed-min-year” (first spike was Dec 21, 2013 the day after SR2.0 arrests)
http://www.reddit.com/r/Bitcoin/comments/1z3ld0/rbitcoin_markets_the_us_government_has_control_of/cfqn1zr?context=3
 
Feb 7, 2014  user is locked out of his account for previously using bitinstant, he needs to get id verification.
https://bitcointalksearch.org/topic/mtgox-locked-my-account-with-40k-because-i-used-bitinstant-before-453760

Feb 7, 2014 Mtgox stops all bitcoin withdrawals citing technical problems. (note that this is the day after the massive bitcoins days destroyed)
https://web.archive.org/web/20140224133422/https://www.mtgox.com/press_release_20140207.html

Feb 10, 2014 Mtgox issues press release that TX malleability is causing the bitcoin withdrawal problem.  They blame the protocol.  Bitcoin experts have stated the protocol is fine.  Gox’s internal code is sloppy thus causing the problem.  (This is a possible stalling tactic of Mtgox)
http://www.cryptocoinsnews.com/2014/02/10/mt-gox-blames-bitcoin-core-developer-greg-maxwell-responds/

Feb 15, 2014 Bruce Fenton (potential investor) contacted Karpeles to offer capital and help to fix the exchange to get it running.  Financial statements were given to Fenton but the deal did not move forward.  Karpeles gave no indication that coins were missing.
http://www.reddit.com/r/Bitcoin/comments/1z6phy/my_conversation_with_mark_from_mt_gox_my/

Feb 15, 17, 19, 20 2014 Mtgox website announces will be working on restoring withdrawals soon, eventually moves due to ‘security issues’ and more delays.
https://web.archive.org/web/20140221015037/https://support.mtgox.com/home

Feb x, 2014  crisis pdf is circulated among potential bailout investors (secondmarket, winklevoss?, Circle?).  I've been told the crisis strategy pdf was deliberately shown to investors not with the intention of acquiring investment but to get them to instill fear and panic in the market about Gox's insolvency.  Someone with insider knowledge about Gox's temporary insolvency (govt seizure) would benefit by buying a lot of cheap coins at $100 knowing that in the near future Gox would come back and rebrand itself as a new exchange and solvency suddenly restored. Shrem has mentioned in a podcast that Gonzague has been running Mtgox for several months now as the de facto CEO.

Feb 22-23, 2014 “SecondMarket was, in fact, approached by Mt. Gox some time last weekend. Mark Karpeles approached Barry Silbert to solicit an acquisition offer”
“However, when the magnitude of the theft and potential fraud became free, Silbert and his team quickly pulled out of discussions,” 
(I question the sincerity of the intent of Karpeles approaching Silbert for a bailout, no sane person would bail out Mtgox.  Surely Karpeles must know the reaction of a VC that is already well known in the bitcoin community would be to panic and distance themselves from Mtgox right?  Maybe this was a way to leak that Mtgox was insolvent thus inducing panic and fear on their own exchange?  Or maybe Karpeles was actually delusional enough to believe what was written in the Crisis pdf)
http://two-bit-idiot.tumblr.com/post/77920927310/i-retract-nothing-i-have-written-so-far-regarding-mt
 
Feb 24, 2014  Crisis Strategy pdf is leaked to public via twobitidiot's blog.  All major bitcoin exchanges issue coordinated joint statement condemning Mtgox insolvency.  Mtgox has massive panic selling throughout the whole day and abruptly shuts down.  Karpeles becomes public enemy #1.  (Twobitidiot is invested in a FDIC style insurance for bitcoin.  The exact type of service that would be in demand after a bitcoin exchange disaster)

Feb 25, 2014 Jon Wickedfire, an alleged news journalist for Fox news, interviews Karpeles on IRC.  Gives vague links referring to a 9gag.com site.  Karpeles drops hints alluding that coins are not “lost” but “temporarily unavailable”.
http://www.wickedfire.com/shooting-shit/179038-my-conversation-mark-karpeles-mtgox-2.html#post2164682

Feb 26, 2014 ne0futur, an IRC Mtgox support mod, says Karpeles can not speak about certain things by the US government
http://pastie.org/private/qjdf6xtxohxa8qxsnjtmq
 
Feb 28, 2014 Mtgox files for bankruptcy protection.  This is covered in the global media.

March 2, 2014  the Jan 30th conversation between Karpeles and the Japanese banker is released by anonymous user 'nanashi' in the IRC chat room.  Karpeles acknowledges Bitinstant users are being investigated and that he's investigating money laundering cooperatively with us gov.  Date of Jan 30, fits the timeline of banking issues after Shrem got arrested.  Who and why would they leak this audio file?  Karpeles?  Is it standard business practice to record a conversation with a banker in Japan?
http://pastebin.com/2xF9VCXj (IRC chat log)
 
 
user 'nanashi' says he is a messenger  and that hackers are trying to find out the truth.  That a random lease document pdf, employee info, mtgox's trading engine source code and that audio conversation are released.  My speculation is that the audio may have been leaked by someone who's trying to protect karpeles reputation.  Maybe someone wants to make it public that Karpeles is working with the DOJ and did not steal customer coins.  Maybe Karpeles leaked this information himself.
 
however he says: [02/03/2014 21:35] want gox boss going a jail for crime against user
 
 
 
At this point, there seems to be a lot of activity happening behind the scenes that is not being explained in the official statements or actions of Mtgox.  mtgox.com shows they are under bankruptcy protection.  That leaves them the option for civil rehabilitation meaning that they may have ability to reopen business in order to pay customers back.  That was explicitly written by Mtgox's attorneys. 
 
"In order to increase repayments to our creditors, it is necessary to explore the possibility of having MtGox Co., Ltd. continue its business. This is why the civil rehabilitation procedure has been chosen, Rebuilding MtGox Co., Ltd under the supervision of the court in a legally organized procedure while giving proper explanations will not be for the sole benefit of the company but for that of the whole bitcoin community.
 
All efforts will now be made to restore the business and recover damages to repay debts to creditors. We hope for the understanding and cooperation of all."
https://www.mtgox.com/
 
 Mtgox can not possibly pay back their creditors if they only had 2000btc left like the Crisis Strategy pdf stated (unless they ignore the 740k btc missing as a liability).  I infer this to mean that in the near future Mtgox or a rebranded company will soon have a large enough bitcoin injection (possibly from the cold storage wallets seized by the Feds) to run a profitable exchange.  Although this is just an option and does not mean they are yet approved for this.


** speculation: notice the timeline implies that in April 2013, business was running smooth with no withdrawal delays in either fiat or btc.  After May 2013, verification becomes a requirement.  Payouts in fiat become harder.  5 months pass before DPR is arrested in October 2013.  Within 2 months, SR2 employees are arrested in dec 2013.  Jan 26, 2014, shrem/faiella are arrested.  Afterwards Mtgox insanity ensues.

** I also left out the Coinlab lawsuit for breach of contract in May 2013.  That doesn’t have too much significance regarding the 9gag theory.  (govt seizure)

Wow, wasn't expecting this. Surprised the price hasn't fallen because of it.

100% agree !
But their is no information here !
Anybody working in webdesign as to face this soon or later. Happend all the time.
Who care !
In business now and for the last 20 years, if you have never facing a trail just mean you have made no fucking business.
Sad but true.
Make a paralel : a little story like this with the actual shitstorm, what a joke.

Mark running with the money is just totally BS, why on earth run with the money, purchassed by FBI, interpol, btc community, etc instead of running the compagny to earn that on max 10 years !
Make no sens to me..
He just got married, a child...
His life is ruined buy now.
Maybe he make a php error, gox was weak, hacker fly with all btc. I have no idea !!
But mark running with the 750K is the less probable plot.
CCN just want cliks for add revenue, It's a good title ! who care if it's true or non-relevant

Umm I really just honestly would like to see this mess cleaned up. If we can get the bitcoins back to their rightful owners somehow that would be awesome.

I hope you agree with me. If you are happier to call this "digital Darwinism" or something similar and call it "good for bitcoin" I beg to differ.

Fuck this article, it´s BS
If i told you mark stole some candy in first grade, it could change what do you think about mark or mtgox situation??

I found this: http://www.cryptocoinsnews.com/2014/03/03/exclusive-tibanne-co-ltd-sentenced-2013-mark-karpeless-lies-new/

Maybe we should ask US federal agencies if they have seized Mt Gox assets in any form and see if they deny, confirm or refuse to say.

How would be go about asking them?

Of course they are... Now how long do we have to wait until mtgox reports all their cold wallet address to sustain the claim that they were solvent at least in the end of 2013, and see where and how did all of those coins move out of its control?

Just show me where the 750K BTC where in the blockchain before (IF) losing control of all them. If they can't point to them, they never had them or, more likely, ran with them and doesn't want everybody to ran after them.

This nonsense about the "magically missing" BTC must stop already. Just point when/where did it happen.

TL;DR: First thing mtgox have to do is publish a report of all their cold wallet addresses showing an aggregate balance of around 750K BTC at some point in time in the past. That's the first thing to prove before talking about missing/stolen/temporarily unavailable coins.

That's easy. They are in the public blockchain ledger.

All of us whant to know where every single one of those missing 750k Bitcoin have gone to. That's too much to be lost!

Agreed +100000   

I wouldn't trust that fat fuck to pick up my dogs shit.

Here's the video, Mark explaining what happened in japanese

http://www.youtube.com/watch?v=NeuCuM9CkBc

I'm constantly amazed at peoples inability to read other people. You just have to look at Karpeles face!! I would not trust him to feed my cat let alone with my money.

Probably the cleaning lady threw out the paper wallet that had half a billion in bitcoin stored in it. In the end end it will be something like that or a hardware failure, inside job or programming screw up.

Michael Bolton: I must have put a decimal point in the wrong place or something. Shit, I always do that. I always mess up some mundane detail.

How exactly am I supposed to prove this?

The main thing I want to say though is that all people are innocent until proven guilty.

I would also like to say that I object to bitcointalk users acting more like a lynch mob attacking Mark on the one hand and victim blaming Mt Gox BTC holders on the other.

It is impossible for us to win if we are divided.

While the other bitcoin leaders (and exchange operators) have betrayed Mark and tried to distance themselves from him in his hour of need they have unfortunately sided with the enemies of our movement.

I can remember when moonco.in (early solidcoin 1 exchange) was hacked and many people were screaming for the exchange operators blood as they thought he had done a runner with all the bitcoin. I wanted to give him the benefit of the doubt though and I remember thinking (and possibly writing) "Do not crucify the exchange operator." 

Now more than ever I see this as important.

I found an article which argues the points a better than I seem capable of.

http://chrispacia.wordpress.com/2014/02/28/this-is-what-most-likely-happened-to-mtgox/

for example:

This person posted the story of his one-man protest out front of MtGox and his run in with Gay-Bouchery on Reddit.

His first question to Gay-Bouchery was, “What is causing the withdrawal delays?”

His response:


    • Well, because Gox is the best known of all the exchanges, we have been under the regulatory spotlight.

    • This has created problems with government agencies, and also with our banking partners.

    • There are also some ongoing investigations, which we cannot talk about.



and...
To the extent MtGox lost BTC due to malleability it was likely only a small amount. Not 97% of all BTC.
Karpeles made an effort to fix the code and get withdrawals back online as soon as possible, but it quickly became apparent there was no way he could cover the BTC needed to satisfy the requests.
Karpeles takes MtGox offline still unable to disclose exactly the source of its problems.
Karpeles reaches out to Bitcoin industry insiders for a bailout but can only tell them he doesn’t have the BTC and doesn’t disclose why. The insiders freak and notify Coinbase, Blockchain, etc. of the insolvency. They proceed to release a joint statement.

so yes the theory is that , US Federal officers demanded access to MtGox safety deposit boxes and seized the contents....

I have no evidence of this and it remains a theory but frankly most of the other stories don't completely add up either. We need to know the truth.

In one source I have read that it was 120,000 bitcoins held my MtGox missing. So what's the exactly amount?

i don t know if i have posted this here:

but how can you make disappear 30 m usd from your account without your bank or your accountant knows?

http://www3.nhk.or.jp/nhkworld/english/news/20140228_45.html