Topic: MT.GOX PRESS : Statement Regarding Temporary Hiatus on U.S. Dollar Withdrawals (Read 6229 times)

On a scale of 1 to 10, of the sensitivity and impact of an announcement that a financial institution can make, something to do with limiting access to customer funds is about an 11.

5) Mt. Gox is certainly not a martyr, but it would be hard to argue that we aren’t "taking one for the team" as far as Bitcoin is concerned. We are a big target, and are absorbing the frustrations of Bitcoiners, regulators, banks, and a media that still doesn't quite understand what Bitcoin is. This is a job we are happy to fill, and not just because we are compensated for it. Our hope is that, once Bitcoin finds its place, we will be able to say that we made a difference in sorting it all out in the early days. New exchanges, business models, merchants, traders, and consumers are rising up to innovate and create a whole new way of doing business. A lot of lawyers are getting new cars in the meantime too.

5) Mt. Gox is certainly not a martyr, but it would be hard to argue that we aren’t "taking one for the team" as far as Bitcoin is concerned.

AML / KYC is very likely the part that requires manual intervention. This would also explain why USD wires were affected.

I have had to deal with a surprising number of bank transfers the old fashioned way with my bank. With Paper. Depending on what gox's relationship is to their bank (why not get a bigger bank?), their own system for verifying with drawls (maybe they personally do everything by hand) and depending on how the bank wants to handle things for them- (maybe they deliberately limit gox) it might not be as automated as you think.

Just a few comments, I work in a bank in Asia and I am familiar with the operations department and the processing of swift payments.

Whatever Gox says, swift payments are automated. Many millions of them are processed every day, if anyone thinks it can be done manually, they are kidding themselves. I can understand manual intervention is required from two points of view - instructions submitted with incorrect or missing data and KYC / AML requirements. About the only thing I believe from the latest Gox post is that they do not want to upset Mizuho - whatever the real problem is, they're not telling us.

And one more thing, in my professional life I have seen many situations where banking processes get into trouble due to spikes in volume, either caused by shortages in manpower, network bandwidth, software or hardware limitations. What I have never seen is a decision to shut things down for 2 weeks. Any financial institution would first of all monitor volumes, and would know in advance when they are approaching capacity. They would then plan accordingly, in advance and develop an alternative. This takes time. Months, at least. Sure, you can be surprised by volumes. They can go up faster than expected. In that case, the bank would take one of two decisions, based on internal priorities and funds available to fix the problem. Option 1 is they don't spend any additional money - the current process continues, it struggles, there are delays, but at the same time the alternative system is developed. Once that is done and tested, they flick the switch, usually over a week-end or another point of low volume, minimizing downtime. Option B is similar, except with more money thrown at the problem. You hire more people to help the struggling process, and spend more money to accelerate the development of an alternative. The switch-over is the same, and would never result in a downtime of more than 12-24 hours, and even those, over a week-end.

Also, nobody in the financial industry is moronic enough not to understand the impact of an announcement that you are stopping USD withdrawals, especially when you do not fully disclose the reason. They should have done better in the first place, coming 24 hours later to appease the masses is just not good enough.

Disclosure: I have an account with Mt.Gox and have used them in the past, but have no balance of either BTC or fiat.

I think it's possible

Just a few comments, I work in a bank in Asia and I am familiar with the operations department and the processing of swift payments.

Whatever Gox says, swift payments are automated. Many millions of them are processed every day, if anyone thinks it can be done manually, they are kidding themselves. I can understand manual intervention is required from two points of view - instructions submitted with incorrect or missing data and KYC / AML requirements. About the only thing I believe from the latest Gox post is that they do not want to upset Mizuho - whatever the real problem is, they're not telling us.

And one more thing, in my professional life I have seen many situations where banking processes get into trouble due to spikes in volume, either caused by shortages in manpower, network bandwidth, software or hardware limitations. What I have never seen is a decision to shut things down for 2 weeks. Any financial institution would first of all monitor volumes, and would know in advance when they are approaching capacity. They would then plan accordingly, in advance and develop an alternative. This takes time. Months, at least. Sure, you can be surprised by volumes. They can go up faster than expected. In that case, the bank would take one of two decisions, based on internal priorities and funds available to fix the problem. Option 1 is they don't spend any additional money - the current process continues, it struggles, there are delays, but at the same time the alternative system is developed. Once that is done and tested, they flick the switch, usually over a week-end or another point of low volume, minimizing downtime. Option B is similar, except with more money thrown at the problem. You hire more people to help the struggling process, and spend more money to accelerate the development of an alternative. The switch-over is the same, and would never result in a downtime of more than 12-24 hours, and even those, over a week-end.

Also, nobody in the financial industry is moronic enough not to understand the impact of an announcement that you are stopping USD withdrawals, especially when you do not fully disclose the reason. They should have done better in the first place, coming 24 hours later to appease the masses is just not good enough.

Disclosure: I have an account with Mt.Gox and have used them in the past, but have no balance of either BTC or fiat.

I hear you ... but is it possible that there is a problem with the interface between Gox's platform and the Mizuho's (if one even exists), requiring manual intervention for every request ?

The pressure we brought onto the bank’s resources finally gave in

I tried to warn everyone but got labeled as conspiracy theory. People claim BTC is immune to government, and the government loves us.

Told ya some day you'll wake up. Now the panic begins!

Stick around bird boy, you'll see.

Dear Mt. Gox Customers and Bitcoiners,

The reaction since yesterday’s statement regarding the temporary suspension of U.S. dollar withdrawals has had mixed reactions, and raised more than a few questions about why we had to take this step right now. Rather than be subject to inaccurate speculation we’d like to clarify some points here. Due to pending matters we are unable to get into everything in great detail, though we’d certainly love to and are looking forward to the opportunity.

1) The problem with the U.S. withdrawals (and even other currencies for that matter) is that our bank can no longer handle the volume of withdrawals. They struggled in the last two months, and the increase due to the Dwolla separation has made it increasingly more difficult. The pressure we brought onto the bank’s resources finally gave in, and we are now working with them to find an alternative method (hence the suspension). We would have preferred to give notice if we were able to, but it was sudden for us as well.

2) We are now working with new banks and alternative methods for transmitting money to our customers. This does not mean we are stopping entirely within the next two weeks, but it will be slower than we would like. We are literally going to use our manpower to process withdrawals ourselves, manually. This will take more time, but we are dedicated to doing as many per day as possible. We announced a suspension in order to manage expectations while we deliver at a temporary reduced rate. Our goal is to have a new system set up in the next weeks with clarity for both the banks and for our customers.

3) Our previous release was rather vague, but for a reason. Mainly, we don't want to upset our bank! They do great work, but our kind of business is completely new to the banking industry. Processing international wires does not just involve pushing a button. It requires real manpower processing everything individually, even in this modern computer age. While Bitcoin's power lies in its ability to transfer fast and securely through software, the rest of the financial world does not operate like that (contrary to popular opinion). Money is surprisingly analog in many ways, and scarily digital in others.

4) Every customer’s funds are safe, sound, and accounted for. In fact, in our dealings with the Japanese financial regulators we have been assured that we are not under local pressure or suspicion and can operate as usual within normal legal frameworks.

5) Mt. Gox is certainly not a martyr, but it would be hard to argue that we aren’t "taking one for the team" as far as Bitcoin is concerned. We are a big target, and are absorbing the frustrations of Bitcoiners, regulators, banks, and a media that still doesn't quite understand what Bitcoin is. This is a job we are happy to fill, and not just because we are compensated for it. Our hope is that, once Bitcoin finds its place, we will be able to say that we made a difference in sorting it all out in the early days. New exchanges, business models, merchants, traders, and consumers are rising up to innovate and create a whole new way of doing business. A lot of lawyers are getting new cars in the meantime too.

6) As risky as it is to invoke the name of Litecoin (LTC???), we must apologize for not keeping everyone up to date. The fact is that the current situation means a continued delay, but for good reasons. We’re looking at July right now, though that depends on a few things. Mainly, we want to do things correctly from the beginning.

7) The new trading engine is finished, is smokin’ fast, and is currently undergoing bench tests. We’re looking forward to deploying it very soon.

While not the most in-depth update we'd like to give, we hope that it has at least clarified a few things. In the next few weeks we are planning to do another AMA on Reddit when we’ll hopefully be able to answer many more questions and also shed some light on what’s been going on at Mt. Gox these past months. Thank you for your patience and support.

What panic? I see no sign of panic.
Panic would be Bitcoin dropping to $50 or below.