Topic: NO PROOF MtGox is insolvent - Document possibly a Hoax? - STOP THE FUD! (Read 7124 times)

I don't disagree with your post except this last if/else part.

I think warfare, globally, is the real value of cryptocoin.  Capital flight has never been available to the plebes, when any Great and Total War has broken out.  So, when the next Great and Total War breaks out, cryptocoin will have value in terms of blood, property, and life: Things that flee a front of war, and wartime capital restrictions.

In terms of WW2, it is very interesting to see where Shicklegruber let money flow out of Germany.  Very interesting indeed.  Also, the term "reparations" is kinda what you are looking for.  I mean, the document asks other coinholders to 'repair' the Goxxies?  I am not saying I disagree at all.  But, the value of cryptocoin is capital flight, plain and simple, that's why it will go up in the future, when wartime capital restrictions happen overnight, as they do.

LOL.  I take it you've never worked for small business.  Even huge companies lose staggering amounts of money on a regular basis due to flawed accounting processes.  It's even more common in smaller businesses where an owner/operator randomly chooses an accounting system they like when the business is small and never upgrades the accounting system as the business grows.  Throw in a lack of independent oversight of accounts and it's frighteningly easy for a business to run out of money before they realised any was missing.

You could, however, argue that the failure to institute proper accounting systems (which would have instantly revealed the discrepancy between the book balances of their BTC accounts and the actual balances as confirmed by the blockchain) constituted negligence on the part of MtGox.  Many smaller businesses than MtGox hold large amounts of funds belonging to others (real estate agents, lawyers, accountants, etc) and manage to ensure that the actual balances in their accounts reconcile with the numbers in their spreadsheets. 

It's shockingly easy to automate the reconciliation and verification process so that any discrepancies generate an immediate alert and no further transactions can take place until the problem is sorted.  In the 21st century, that verification process should be nearly constant and discrepancies detected in almost real time.

He said it was more or less true, but not produced by mt gox. It's obvious a draft of something produced for mt gox (consultant, contractor, investor, whatever) since Karpeles knew of it and what it was back when it was a secret. It also could be a red herring produced by gox to "leak" the story prior to it breaking, and can hide behind "we never made any statement" but still get a story out.

Document is not a hoax. STOP THE FUD FUD!

He said this document was not produced by mt gox?

If someone were to beat you nearly to death it would be a significant thing.

Today we have transcripts of the CEO admitting the "crisis management" document is "pretty much all true".

That means Mt Gox either sold over 700,000 BTC short, lost them, stole them, or were robbed of them.

I personally believe it is a combination of mostly the first and last items in that list.

Comparing this situation to a bank closing on the weekend is IDIOTIC.  This is a failure of such grave proportions is will be talked about for ages.  It has set bitcoin back YEARS in acceptance and now it is all about damage control.  We are talking tsunami damage, not a little storm.

I personally think bitcoin survives even this.  But it's going to take a long time.

Very smart, well written.

By the way, I think that there is good chance for rebranding and a different team taking over (MT)Gox.com and within a month everything will be ok.

Some points and evidence:
1. The leaked document was published Before the website halted trading and shut down. While the document itself has a schedule for the shut down and halt of trade to the exact time (I.E morning time in Japan, Tuesday the 25th).
2. The Gox.com evidence is pretty strong as well.
3. The amount of Bitcoins that was traded during the super low prices on MTGox are around 750,000 btc.
4. Hours before the document was leaked MTGox had a surge of bidding coming in for $100-$110, it was about 15-20k BTC bidding war. As if someone("s") knew people are going to sell massively to those low prices. Furthermore, after the price went down and those 15-20k BTCs were sold on the way down, another ~10K were bought on the way up. This was a super unusual activity in terms of size, even for these last weeks which had huge volumes. This means there is a connection between the document and the trade on MTGox, which clearly has a link to a potential success with the #1 bullet on the document itself.
5. MTGox said that they want to keep "will provide more information as soon as possible to keep everyone in the loop."  Which sounds like there is something secretive going on behind the scenes that only few knows about. It fits well with a new team taking over or a major security issue or both.
6. When a company say what MTGox has been saying in the past few weeks about re-enabling withdrawals repeatedly... They have liabilities, legal liabilities, because in a future court case if it can be demonstrated that they had no way and/or intention on doing so, then they mislead the public using official statements. That can very easily help a "bad faith" liability charge to be accepted in court which would make the management personally responsible. In other words, it is inconsistent with many of the FUD being spread, while it is very consistent with a new team taking over and/or making a joint venture to rebrand and/or restructure etc.
7. The document suggested that the support of MTGox will be available during the shutdown in order to allow "customers" to ask for their accounts' history/records etc, which is of extreme importance(!) and I sent an email using the still technically working support and got verification email and automatic responses as if everything is still working in terms of support. I haven't had a personal reply from the support, but again it shows consistency with the document.

There are a few more notes to be taken, but I think I listed enough,

Obviously, as I do hold some GOXBTC I do also Hope, it is the case and that us, MTGox's customers will see our money back. I really do.
By the way, at first I accepted it was all lost, but now with all the new evidence surfacing, it seems hope is not lost, there is a good chance that a rebrand and a new team is exactly what is going on, on top of making the customers whole.

@ISAWHIM you're a Gox fanboy?

None of these options apply.

There is a third option which makes most sense

3.) Mission to deliberately harm/kill BTC - Mission taker Karpeles

the insolvent theory makes no sense, because noone can be THAT incompetent.

outright fraud makes no sense because the exchange had so many options to fraud people of their money, WITHOUT killing itself. Simple example, by keeping up the withdrawal delays of USD they themselves or via insider friends cooperating with them, were able to almost instant withdraw and therefore do some insane arbitrage as in buying at bistamp/btc-e/coinbase and sell for 10-20% up. Rinse and repeat.
Many other ways to use the exchange power in order to profit, like for example doing your own trades without fees, allowing you to profit on the smallest differences in buy/sell and many more i am not going to list here.

So fraud option is not an option either.

To me, it only leaves the option of deliberate trying to harm BTC. And if you look at the way karpeles acted, this is the most likely option BY FAR.

Near total bankruptcy... is that like near total death... or "not dead", or "not bankrupt".

Gox is being nailed by spammers, hackers and noobs with DDOS attacks. That is why support is down (shut-down by zendesk themselves), and twitter (shut-down by twitter themselves), and why they moved the office (at request of the other tennants and land-lord), and have disabled "logins" (to protect you from someone possibly having logged-in after having stolen your credentials, after being infected following these FUD articles listed on infected websites.)

The DNS is still there, the HTTPs cert-auth is still there, the offices are still there and filled with working employees...

The only ones completely clueless about what is going on, anywhere, is the bitcoin foundation. They were clueless about the last resignation, and this one, and the many others that will follow. They are just ad-space to advertise your BTC business. They don't actually do anything, or know anything.

They removed the word "insolvent", because I am sure they were told to, by lawyers, since that is slander without proof or knowledge of the situation. Just as I am sure BTCe will remove the word "bankrupt" from the statement they made. Of all the people in the loop, BTCe would hardly be one of those even remotely close to any loop. They just repeated what they were told, or they are the ones spreading the FUD themselves. (Think about that for a second... If they had a clue what is going on, they would not have released a statement like that. That statement alone, shows they are clueless.)

The fact that Gox is down, and still, nothing has changed, only confirms that "Gox's issues" actually had nothing to do with anything on any other exchange. All exchanges have been falling for almost a month now. Weeks before all this crap about Gox rolled-out.

Gox was purposely being held down, by someone simply cashing-out, at any cost, because he/they could. He/they were willing to cash-out for less, and we were all willing to buy those discount coins from him, for less. No-one was forced to pay less. There was no crash. We were all making out like bandits. We will again, once gox opens the gates.

Then the price on all exchanges will go back up, as less people become unable to sell for less, and more people are willing to pay a little more money for a little less BTC.

I am sure there were a few pissed thieves, with coins stuck in the exchange, who had not been identified yet, or had, and were just not "called-out". You can't prosecute them for taking BTC, as easily as you can for prosecuting them for "attempting to launder into cash". Letting them get less cash was the smartest thing to do. They didn't get any cash that anyone wasn't willing to part with. We all voluntarily gave-up our cash for those discount BTC. In the end, he does not actually get that cash, and chances are, some govt will.

Shit happens... Deal with it.

Do you all freak-out this much on the weekends when the banks close?

Would you freak-out this much if the bank holding your money closed, because they had threats of robbers coming to rob the place?

No, You would be glad that they shut the doors, told you to go home, and wait it out. Seriously, would you rather they kept the doors open, and you would just HOPE the robbers don't come before you, or while you are there?

Go to the park, come back in a few days... Once we all have something solid. It is not like the guy is going to go anywhere, or spend any money. What is he going to do, use his bank, pay in cash, hide in Atlantis or Zimbabwe? I hear USD gets you a lot there!

All is but speculation at this moment.
There is no denying the funny string on the blank gox site about the acquisition thou.

Everyone will just have to face the facts that MtGox has successfully lined their pockets with your Bitcoins and gotten away with it, and now with gox.com they are going to do it a second time.

Lol...  Youre sort of right OP.

No proof of insolvency... not as much as proof of near total BANKRUPTCY.

I agree with both of you. The media shitstorm will blow over, like it always has before. The new kids and bitcoin non-believers surely are having a field day with this one, and aren't helping its image, that's for sure. But it's inevitable and happens over and over again and bitcoin emerges resilient as the coins are distributed to stronger, smarter hands during the market downturns. Once the market turns bull, the accumulation phase will begin again as many clueless investors buy in, and the cycle repeats itself.

Last summer I witnessed this on a smaller scale with the ASIC chip preorder debacle. Yifu Guo, a trusted community member, basically screwed the pooch and didn't deliver his brand new ASIC chips on schedule, thereby screwing preorder companies that had invested much and taken customers' money for assembly. (These are mining rigs, so time is money. Also they were the first ASICs so time was big money.) For a while, he was one of the most hated people on the forum (as were some of the assemblers). I've never seen more profanity and name calling, even death threats. Money and greed turn people into absolute monsters. In the end, though, most people got their money back (Yifu issued refunds) and that saga is long behind us.

Overall, given the lack of hard, concrete evidence and the record amount of FUD (both here and on reddit) I could go either way on Gox. I know many of you are angry. Just remember that this is a cutting edge technology in its infancy, and you're lucky to be part if the IPO. If you can't handle the stress, maybe Bitcoin isn't for you.

Regarding Gox, I feel for those who lost a lot of money. Try to keep things in perspective, have a little patience, and hope for the best.

Actually 1 is not an option, because noone is so retarded as to lose 99% of their funds under management.

Bottom line.  There are only two possibilities here:

1.) They are in fact insolvent which indicates absolute incompetence.
2.) Outright fraud.

You mean thieving?  It tends to lurk right next to "We do IT in a fucked up half assed stupid fashion."

Also, I work in IT, so for me, Gox was obviously a lego operation.  

But, see, TRUST is what all great thieves, exploit.  So, perhaps cryptocoin is like a battleground of theiving shitbags versus regular good people who do not present a false face to the world?  I treat it as such, simply because, cryptocoin like major corporate brands, will surf through WW3 and come out the other end of it looking even better.  Just like g00g, mitsubishi, krupp. etc.

The document is the purest bullshit I have ever seen.

I am strongly suspicious of Two Bit Idiot, the blogger who released it. He claimed to have verified the figures with "multiple sources" close to Gox:

1. But then why for weeks since the malleability bug or even months/years has none of this come out, and then all of a sudden Two Bit Idiot has an internal document and "multiple sources"?
2. And why when the document is so clearly fake it's laughable has it been confirmed by "multiple sources"?

It's no secret that some apparently knew (Charlie Shrem for example) over the past couple of days at least that Gox is moving towards acquisition, so someone has cobbled together this bullshit visibly hastily.

And it was immediately pumped by Coindesk. They need to look into things properly.

I agree, it doesn't pass the first smell test. Its writing style suggests non-English, maybe German or Russian. Although there are no obvious give-aways like incorrectly capitalized nouns, the tone and style is reminiscent of the mtgoxtakeover website.

Like they have been monitoring the situation over the years - while they lost the customers funds?
They aren't doing anything.

gox lives?
on their site now!

Dear MtGox Customers,

In the event of recent news reports and the potential repercussions on MtGox's operations and the market, a decision was taken to close all transactions for the time being in order to protect the site and our users. We will be closely monitoring the situation and will react accordingly.

Best regards,
MtGox Team

Yeah, I agree. People don't realise they're part of the problem when they spread this FUD without any concrete evidence. They complain about the price falling, but it wouldn't fall if it wasn't for the FUD spreaders and panic sellers.


They very well might become insolvent / bankrupt, but speculating on this and what really happened based on little evidence or hunches isn't helping.

This is the very essence of it. Had it been all negative fud being spread around I could to some degree have bought it. But rather it has been a consistent cycle of spreading fear/hope via various channels and that just look to me like someone moving the market at their own accord taking advantage of MTgox unwillingness/inability to communicate (not exactly the first time they act like a muted wall) It is quite likely that they have been gagged by their lawyers (especially if their legal council is from Japan, you don't admit failures over there in the corporate world unless it's unavoidable).

Anyone trading on mysterious documents and rumors is a fool and will soon be parted from their money. Honestly people, a guy named "two-bit idiot" produces a leaked internal draft that looks like a 3rd. grader made it, and it makes the NY Times! There are so many things wrong with this.

• Who was it written for? It seems to be an internal document, but speaks to an external audience.
• It does not appear to me (untrained) to be consistent with the known writing of Mark K., so who wrote it?
  
• Why is it denominated in a foreign currency?
• Why is there a page that looks like a balance sheet but is completely redacted? Why include it?
  
  I could go on.  Oh well, your fear is someone's gain.

sadly, the media didn't call the USD a fraud or ponzi scheme during the financial crisis in 2008, even after Lehman collapsed, the underlying root cause, money based on debt, was not brought up  

^ This! ^

+450 000 0000

 Bitcoin regulation and destruction is coming. I don't care what you've heard about "5 stages of grief" or buy on the low or whatever. Sure it might go down and then its probably going to spike up and we might see 10 000$ again in 6 months. But i am not ever trusting the community if this doesnt get fixed.

Despite what the landing page may say, subdomains are never available for anyone to take.  You don't register a subdomain with a registrar, you simply make DNS pointers to the webhost and since only the main domain registrant can legitimately create DNS entries for that domain and all subdomains they are the ones who control where the subdomain lands.  

http://www.reuters.com/article/2014/02/25/bitcoin-mtgox-ceo-idUSL1N0LU12G20140225

Seems he hasn't jumped out a window at least.

Does MtGox look professional to you? If not, why do you expect their document professional?

The offices are empty and the CEO is no where to be found.

That's not really how a solvent company acts.

http://news.yahoo.com/bitcoin-exchange-mt-gox-39-website-down-053727771--sector.html

If there is one thing that speaks against the document more than anything else it's the extreme amount of BTC lost that is claimed. I highly doubt that gox had that in total deposits these days unless they had A LOT of unused btc sitting around in old accounts.

I can't remember if gox disclosed how many coins they had in deposits back in 2011 when they got hacked, but iirc people were throwing 4-600k figures around on the high end and that was when BTC was 10% of current value and gox had 95%+ of the exchange market.

I do however think that they could potentially have lost 1/10th of the stated value, the withdraw queue was pushing above 70k I think towards the end with around 10% of transactions making it. Even this is a extreme case however since it only takes 1 double spent input to make a transaction invalid and most gox withdraws could contain 5+ even at low amounts.

Also if they had 740k in total deposits, the withdraw queue before they halted withdraws would have been A LOT bigger. You really think only 10% of total deposits tried to get out during the last week of withdraws? The numbers simply does not check out.

Did nobody notice that the document is written the same way (by a German) as the mtgoxtakeover website?

I disagree. It is regulations fault that there are so few exchanges. It is regulations fault that BTC cannot freely be traded for cash or cash deposits, which would be the absolutely safest method.

Without regulations there would be bitcoin trader cafes everywhere, with security in place and cash checking machines, maybe even in banks? The safest trading is  p2p cash for btc, in a trusted environment.

Regulations are the reason why your bank is not offering BTC as a foreign currency or a commodity, right via online banking.

It is 100% the fault of regulators what is happening here, and 100% their intention.

The Mt. Gox homepage was not loading, although no error message appeared. Its source code contained a line saying, "put announce for mtgox acq here."  That's from yahoo news.  I wonder if that means Gox is being acquired?

Also, I think Gox SHOULD be sued.  That will help matters because it will put everything in the open.  It will also lend credibility, however slim, to Bitcoin because you can get legal redress if someone steals your coins.

+1000

The very fact that they used such wording in the first place indicates they had good reason to believe they were insolvent. The fact they removed it could simply be a move to minimize panic.

It does not prove it, but it certainly implies it, very strongly.

It tells us that the document in question was correct about its prediction that Mt. Gox would attempt to rebrand themselves as "Gox" and that very much lends to the credibility of the document.

Like I said, it could have been created by someone with inside knowledge about Mt. Gox, and they used that knowledge about the rebranding and other things to make the document seem legit, whilst at the same time forging the numbers to create a panic.

I totally agree with you IF this is all true.

The point I am making is I think we are already doing a lot of the damage described above even if it all turns out to not be true. The journalists are already feverishly writing the "I told you so" articles as we speak, I am sure.

The document may be real but I sure don't believe the figures in it. Where did all the fiat go? Did they spend it to buy BTC at $1,000 just to lose the BTC later?

They're incompetent but were they really that incompetent? If they claim something like this it smells like deliberate fraud.

The alleged internal mtgox document reads very real to me.  If it's a hoax, they did a great job (only really weird part was the picture of Mark under Part 2 - why have it at all and on some weird letter form? - an internal memo would just say what the letter would entail?)

The document discusses many things I and others on here believed to be the case and possible solutions:

1.  Acknowledges that the gox fiasco is not just about gox but that it will affect bitcoin's adoption going forward in a massive way.  The key is making the bitcoin customers whole for the sake of bitcoin itself.

2.  Requires Mark to resign.

3.  Someone (or a group of people) PURCHASE gox after factoring liabilities (but didn't realize the liabilities were so enormous).  It is a valuable exchange and I think most people would trust Gox if they knew it was being run by completely new management.  Someone with a high profile and trust must take over gox (like Andreas or someone similar), even if they don't want to right now.  I believe customers will stay if there is proof of bitcoins to back all withdrawals - not sure if that is possible though (see #4)

4.  PART OF MAKING GOX CUSTOMERS WHOLE IS FOR CERTAIN WHALES TO GIVE (OR LOAN WITH THE UNDERSTANDING THAT SOME OR ALL LOANED BITCOIN MAY BE LOST) SOME OF THEIR MASSIVE BITCOIN HOLDINGS TO GOX AFTER MARK IS GONE WITH THE UNDERSTANDING THAT IT IS ONLY FOR MAKING CUSTOMERS WHOLE, ALL OF WHICH IS FOR THE CAUSE OF BITCOIN.  (again, didn't realize the number of bitcoins short was so huge, and was thinking about very early adopters who may possibly own massive amounts of bitcoin).

Cannot emphasize enough how huge this is for bitcoin adoption going forward.  Those who simply want gox to die are missing the big picture.  If gox customers are ultimately cheated, there will be a sell-off, but it probably won't be that big as some of this is already factored in.  Many in the public as well as companies, hell even the media, were starting to talk about bitcoin in a positive way.  They will turn and run in a heartbeat - they haven't yet bc technically no one has yet been cheated - they and we are all waiting to see what happens.  All the "I told you bitcoin was dangerous (or a fraud)" will be out in full force.  Media will be brutal and gov regulation will come down like a hammer.  Bitcoin's adoption will stop cold in its tracks, and the public, which was always worried about security, will say "no thanks, I don't need this product that badly"  and bitcoin will unfortunately grind down slowly to nothing for many many years to come

 

The very fact that they removed the word insolvent indicates they have no solid evidence that they are insolvent either.


That, to me, does not automatically imply they are insolvent. Companies get acquired all the time while still solvent.


Not disputing that but buying a new domain and re-branding also does not tell us anything other than the fact they are re-branding.


Point taken, did not realise it was marked as a draft.

However, surely the document is trustworthy or it is not. I don't see how it could be a legitimate document with numbers that cannot be trusted.

How do we know that mtgox has not been hacked in order to create chaos?

1. Joint statement by blockchain.info and other exchanges pretty much makes it crystal clear they are insolvent. In fact the original statement even used the word "insolvent" in the title and body of the statement (they have since removed such wording).

2. The source code on the Mt. Gox website says "put announce for mtgox acq here" which indicates a recent acquisition of the business, implying that they have been bought out and are going to continue operation of the business under different owners and management.

3. There is very solid evidence that gox.com was just acquired by Mt. Gox and is going to be used for their upcoming rebranding just like the document claims. Do a whois and gox.com and see: http://www.domaininvesting.com/andy-booth-sells-gox-com/

The document is clearly titled as a draft and may have been written by someone who doesn't speak English as their first language, so it's not a good idea to dismiss it on those grounds alone. I do agree that it's quite suspicious but everything written in the document seems to be unfolding exactly as predicted. I wouldn't fully trust the numbers in the document because it may have been written to cause a panic, but who ever wrote it clearly has an inside connection to Mt. Gox. Based on the joint statement and the actual Mt. Gox website being down I would say that the "proof" for Mt. Gox being insolvent is extremely high, hence the apparent acquisition.

The sad thing is, I get the feeling we are not going to get proper closure. This situation will just continue and the proof will make itself obvious through the build up of circumstantial evidence. The shittiest way for Gox customers (including silly old me) to learn the truth.

Mt.Gox support site has been deleted ... and the subdomain is now available for anyone to take !??!

Ironic contrast with your own sig. In bitcoin you want 6 confirmations, but for general panic we apparently need none.  The big news is, there is no news, just a blank page where mtgox used to be, with a weird "acq" announcement placeholder in the html-source.

Seeing how bitcoin is in a far better position than November last year and loads of encouraging news has been coming out, I'm starting to believe that people just want bitcoin-prices to go down because regardless. People seem to be panicking just so they can panic. Even if the rumored documents were real(doubtful to say the least), this would still mean it's old news and has nothing to do with the current bitcoin. I get that everyone likes to panic, but this stuff seems to have happened years ago, you've missed the panic window, you're too late.

I agree, that is not encouraging.

Still not proof though.

Yes they are. We have warned them multiple times before.

Many big names who previously supported MtGox have very publicly distanced themselves from Mark today.  They probably know him far better than any ordinary users.

Better question, are people really this dumb to not see the obvious?

Is there any concrete evidence of mt gox being insolvent anywhere? so these guys havent stated a thing the last 2 days, the only action we have seen is them halting trading and the website going down.
And we are all just speculating.

 Is Mark Karpeles really this dumb, does anyone really know him. \

Yes, it's hard to imagine them having dealt with this in a worse way.

And, while they might refuse to say they are solvent they have not (as yet) stated they are insolvent either.

Companies do sometimes go into lock down when they are about to either file for bankruptcy or announce some really good news. Right now I wouldn't be betting on either option.

I like their website... " put announce for mtgox acq here  "  lol

MtGox refused to even comment when asked by Wired about the allegations.  They're doing absolutely nothing to convey the actual truth to the public, so at this point it's their own damned fault if people believe the rumours.  They've had every opportunity to deny the various rumours which have sprung up over the last few day and consistently refused to state that they are solvent. 

The onus is pretty much on them to prove their solvency now.  Once you stop paying people what you owe them without any agreement in place about when they will be paid, the presumption of insolvency applies by default.  It's the lack of information from MtGox itself which is destroying MtGox.

https://www.mtgox.com/

judging by mtgox's latest actions they are pointing to insolvency

i believe they have been insolvent since their usd cash withdrawl problems

mark karpeles probally just wanted to buy time and blame transaction malleability

It seems like everyone is running round like like lunatics declaring MtGox is insolvent and dead without any solid proof. I am not saying this may not the case but lets at least wait for a solid bit of evidence - either an announcement from MtGox or proof that the document going around claiming MtGox lost 700,000+ BTC is real. Otherwise we are shooting ourselves in the foot. The media is and will have a field day on these claims and if later they prove to be false the short term damage will have already been done.

The document in question does not look at all professional to me and no one really seems to know where it really came from. What if it was just created by someone wanting cheap bitcoin? I would say that they have done an exceptional job of spreading FUD if that was the case.

Its amazing how many forum members come out of the woodwork claiming this is the end of Bitcoin, announcing class action lawsuits against MtGox, sending MK death threats etc. None of this is helping the situation.

STOP the FUD.

In my opinion Bitcoin is here to stay with or without MtGox!! Lets just get on with it.