I would just like to add that the writing has been on the wall for MANY months. Here some quotes from +4 months ago, which are basically big discussions with Sturle, in chronological order,:
they are heavily delaying outcoming wires, while incoming wires work just fine (ohhh... No "overwhelming" with incoming money?). Everything strongly indicates they are having liquidity problems, and that they have been forced by circumstances (seizures, Coinlab, misappropriation) to run a fractional reserve.
2+2 = 4
Gox is short of $10M and they are heavily delaying withdrawals. They make up stupid excuses such as "the old financial system cannot follow the thriving BTC economy" and "our huge volume is overwhelming the biggest bank is Japan". Still, there's no problem with the money coming in, only with the money going out.
At the same time, Bitstamp is actually handling a higher volume, and processing withdrawals quickly and smoothly.
The most plausible scenario is simply that Gox is having liquidity problems.
Defendants are informed and believe that in March and April, 2013 MtGox customers, at the
suggestion of CoinLab, deposited $12,788,701.08 into one or more CoinLab bank accounts;
CoinLab then caused the amount of such funds to be credited to such customers' MtGox
accounts but CoinLab did not transfer the actual funds into the MtGox bank account. As a
result, such customers' MtGox account reflected a higher amount of currency funds available
to such customers than were actually in the MtGox bank account. In April, 2013, and upon
the demand of MtGox, CoinLab transferred a portion of those amounts, $ 7,473,490.29, to the
MtGox bank account, leaving a balance of approximately $ 5,315,210.79 to be transferred to
the MtGox account and which is being wrongfully held by CoinLab.
They are admitting they have a big hole, and they do not say anywhere that they had to cover the hole with their own money (I would have stated that clearly in the official document, to wipe out doubt about insolvency - wouldn't have you?). The only hard cold fact they are stating is "
such customers' MtGox account reflected a higher amount of currency funds available to such customers than were actually in the MtGox bank account".
Plus, instead of being transparent and disclosing their balances as any serious company would do after the mainstream media started to write that Gox might be insolvent (Forbes, Wired....), while many customers started to leave them for good, causing a very unhealthy spread of +10% between exchanges, they just make up absurd excuses such as
"the current withdraw problems are being caused by the traditional banking system, not because of a lack of liquidity at MtGox. The traditional banking partners that MtGox needs to work with, are not able to keep up with the demands of the growing Bitcoin economy" Really? The above seems the most plausible answer to you after all the facts Gox have been hiding and that we now know?
Finally, I'm amazed by the fact you keep repeating "they have $12M in their order book", like that is somewhat reassuring:
- that money is just on Gox balances, it might very well not being backed by fiat in their back accounts (AS THEY ADMITTED IN THE COUNTER-SUE TO COINLAB)
- even if that money is fully backed by existing funds in their bank, what do you want them to do with it? That is supposed to be their customers money, they are not supposed to operate/cover holes with that!!
- I don't know if you have any experience in running a business, but it doesn't seem so: the fact is they only have $12M in the order book (again: customers money), and they admittedly have a hole of $10M. So, the hole is almost equal to the full amount of fiat they have in their order book, and roughly half of the all time high fiat amount they EVER had on their order book. That's HUGE, try to extrapolate that to Forex and tell me that covering such a hole wouldn't be a problem for them
- Another fact is they allegedly had only an income of $8M during the 4 months of all time high usd volume EVER, and again the hole is $10M. Let me tell you that's a huge hit for a business, having a hole significantly (20%) bigger that the income you got in your best 4 months ever is a BIG problem for ANY company. When the alleged hole was "just" $5M, I thought it was bearable. Now that we discover the hole is *at least* $10M, I can't help being worried.
Occam's would say that they are running out of cash
and the reply from Sturle to my post above:
Don't bother. Rampion is vaccinated against facts and logic. Completely immune. He doesn't even read this thread (or does it very selectively), just post here from time to time.
Amazed by how people still tries to cash out using MtGox.
IMO this rally may give them additional fuel, but they are on the brink of something very bad. Too many months of obvious illiquidity.
Mt Gox has redeemed itself in my eyes. I waited 3 months for an earlier regular swift withdrawal. Cancelled it and requested expedited 5% fee withdrawal instead. Today, about 2 weeks later, just like they promised, he money hit my account. 5 figure USD amount
Wow, "expedited" or "emergency" 5% withdrawal that takes
between 2 weeks and 4 weeks to clear... So much for the "emergency"
Honestly, I still think what I wrote weeks ago: the 5% fee is just a desperate attempt to make some extra money to cover Gox's losses. The BS about "the traditional banking system" not able to keep up with their volume is UTTER BS, guys I hope you know what Occam's Razor indicates here:
Gox is doing fractional reserve with customers money, they have a huge hole of at least $10M and they are struggling to cover it, and that's the only reason of the huge delays in withdrawals. Wonderful reply by Sturle to my post above:
Your mouth is big, your documentation non-existing, you are making up holes, and you fail to explain anything in a way that makes sense.
I think somebody owes an apology to the community, btw.
