Bitcoins are officially donkdown

[DRK Star]

http://www.wickedfire.com/shooting-s...ml#post2164682


My full unedited conversation with Mark...

I removed the channel name and my IP info along with the person who created the channel that does not want to be on record for this.

This conversation took place on 02-25-2014 at 10:39am EST.



[10:39] == JonWickedFire [IP REDACTED] has joined CHANNELNAME
[10:40] == mode/CHANNELNAME
[10:47] == MagicalTux [~MagicalTu@mtgox/staff/MagicalTux] has joined CHANNELNAME
[10:48] <JonWickedFire> Hey Mark.
[10:48] <JonWickedFire> Thanks for coming in.. I know you're a bit.. shaken up and stressed..
[10:51] <MagicalTux> hi
[10:51] <JonWickedFire> Are you doing okay?
[10:52] <MagicalTux> more or less
[10:52] <MagicalTux> it's 1am and tomorrow morning first time I have a lawyer appointment
[10:52] <MagicalTux> things couldn't be better
[10:52] <MagicalTux> (well, not tomorrow but today, now)
[10:53] <JonWickedFire> Yeah, you're in the future over there in Japan, lol.
[10:53] <MagicalTux> guys in NZ are even more in the future
[10:54] <JonWickedFire> Yeah two places I've wanted to visit but cringe at the flight time alone.
[10:55] <JonWickedFire> So I just wanted to talk to you on here, no pressure, you don't have to answer anything you don't want to. I'm not a journalist.
[10:55] <JonWickedFire> We've chatted before briefly. So you know a lil something on me.
[10:56] <MagicalTux> yep
[10:56] <JonWickedFire> And with all of what happened yesterday, even though I knew all of that, I didn't let me contacts at FOX Business publish it, because I didn't want to see bitcoin or gox going up in flames if it could be salvaged.
[10:57] <JonWickedFire> Obviously holding that info back and not publishing a tumblr or leaking docs first allowed someone else to stake a claim on it first.
[10:58] <JonWickedFire> But you win some you lose some.. and honestly, I'm not a fan of people posting things that are rumors or bullshit or not verified just because it damages the shit out of someone or a company... and it really cannot be taken back afterwards.
[10:58] <JonWickedFire> Is that Crisis Strategy Draft even legit?
[11:04] <MagicalTux> more or less
[11:05] <MagicalTux> as the name suggests it's a draft, and it's a bunch of proposals to deal with the issue at hand, not things that are actually planned and/or done
[11:06] <MagicalTux> this said this document was not produced by MtGox
[11:07] <JonWickedFire> I saw some strategies in there that I had shared with you, but also saw some things in there that I would have never suggested anyone ever go through with as it would make you look horrible..
[11:07] <JonWickedFire> I think a lot of people ignored the draft part.
[11:08] <JonWickedFire> It was just really surprising to see that being "leaked"..
[11:10] <JonWickedFire> Do you think it was leaked by someone purposely to hurt you personally or gox in general?
[11:13] <MagicalTux> [01:09:51] <JonWickedFire> Do you think it was leaked by someone purposely to hurt you personally or gox in general? <- I have some doubts
[11:14] <JonWickedFire> Heh, I bet.
[11:17] <JonWickedFire> Are you stepping down as CEO and away from gox too?
[11:17] <JonWickedFire> (If you can't legally disclose, then just say so)
[11:20] <MagicalTux> can't disclose that yety
[11:20] <MagicalTux> yet
[11:20] <JonWickedFire> K np.
[11:22] <JonWickedFire> The reason I'm asking is because after yesterday's events of you removing yourself from the foundation and deleting the Twitter account/posts and all.. right away speculation within the bitcoin arena went into hyper chaotic mode, and the word on the street was that you were closing up shop and running away with all of their monies and bitcoin...
[11:22] <JonWickedFire> How does that make you feel to hear or see people you bailed out yourself and stood up for over the years, turn on you like that?
[11:22] <MagicalTux> not good
[11:24] <JonWickedFire> Mark, I know you're not one for expressing yourself, but here's your chance at it, because you really have stepped up before, and done things NO ONE else ever had.. or probably will again.. and it seems like all of it has been quickly forgotten and instead you're being labeled as the Madoff of bitcoin.
[11:25] <JonWickedFire> We're having this chat, and you're still in Japan at your apt/office and not in a cave somewhere, right?
[11:34] <JonWickedFire> Look Mark, you took mtgox and ran with it, built on it, stuck with it and took it to a level no one ever thought possible. When other exchanges were crippled, you stepped in and bailed them out or absorbed them to save the bitcoin market in general. In exchange it brought you a massive surge of customers and press that made you look like the hero of the day and then some.
[11:34] <JonWickedFire> But what most people forget too was that you weren't set up to handle this from the start..
[11:35] <MagicalTux> [01:25:02] <JonWickedFire> We're having this chat, and you're still in Japan at your apt/office and not in a cave somewhere, right? <- at home, with my cat being a pain sleeping on the keyboard
[11:35] <JonWickedFire> Yeah, doesn't sound like someone on the run with bags of money...
[11:37] <JonWickedFire> What's the plan now for you and mtgox?
[11:37] <MagicalTux> can't comment on that yet
[11:37] <JonWickedFire> Alright.
[11:37] <MagicalTux> (mostly because doing so could compromise our current efforts)
[11:38] <MagicalTux> imgur: the simple image sharer <- my cat pushing my keyboard, me pushing the keyboard back on the desk
[11:38] <JonWickedFire> So you guys are still actively trying to save it though?
[11:38] <MagicalTux> We haven't given up
[11:40] <JonWickedFire> You could have given up and walked away a bunch of times previously, but you always stuck it out... even though others have closed up and walked away, why have you continued to fight and work at it and not give up?
[11:41] <MagicalTux> "Giving up" is not part of how I usually do things
[11:42] <JonWickedFire> Do you want to tell your side of this a bit more?
[11:43] <JonWickedFire> Like what you've sacrificed or given up, personally? I have to imagine it's taken quite a toll on you.
[11:43] <MagicalTux> well, first I would guess is my health
[11:43] <JonWickedFire> What do you mean?
[11:44] <MagicalTux> took on more than 30kg since handling MtGox
[11:44] <MagicalTux> (compensating for stress by eating)
[11:47] <JonWickedFire> I'm guessing stress from lack of sleep too, like now..
[11:48] <MagicalTux> heh
[11:48] <MagicalTux> and drinking liters of coca cola
[11:48] <MagicalTux> how american
[11:48] <MagicalTux> (almost american, actually, since some people see coca cola as being non-american)
[11:52] <JonWickedFire> lol
[11:54] <MagicalTux> anyway
[11:54] <MagicalTux> I should try to get some sleep
[11:55] <MagicalTux> already 2am
[11:55] <MagicalTux> waking up in 4 hours
[11:55] <JonWickedFire> Err
[11:55] <JonWickedFire> One more thing..
[11:55] <MagicalTux> and starting to be tired of pushing my keyboard so it stays on the desk
[11:56] <JonWickedFire> Do you still believe in the viability of an unregulated digital currency like bitcoin tho?
[11:57] <MagicalTux> difficult
[11:57] <MagicalTux> tbqh the pressure we got from banks and governments makes things very hard
[11:58] <JonWickedFire> Do you think if it were regulated it would make it easier to work things out?
[11:58] <MagicalTux> partially
[11:58] <JonWickedFire> How so?
[11:59] <MagicalTux> well, first avoid being blocked by banks and governments around the world
[11:59] <MagicalTux> if regulated, it means that as long as you follow the regulations you're fine
[12:00] <JonWickedFire> The biggest question people really have asked though is are you personally vested in mtgox with your own btc?
[12:01] <JonWickedFire> And whether or not you, like everyone else, have taken a personal hit and are in the same boat as they are in terms of taking a loss/hit from the recent events?
[12:01] <MagicalTux> [02:00:59] <JonWickedFire> And whether or not you, like everyone else, have taken a personal hit and are in the same boat as they are in terms of taking a loss/hit from the recent events? <- any BTC I own personally were on MtGox
[12:02] <JonWickedFire> How much did you lose yourself?
[12:04] <MagicalTux> Well, technically speaking it's not "lost" just yet, just temporarily unavailable
[12:05] == MagicalTux [~MagicalTu@mtgox/staff/MagicalTux]
[12:05] == realname : Mark Karpeles
[12:05] == channels : CHANNELNAME
[12:05] == server : calvino.freenode.net [Milan, IT]
[12:05] == account : magicaltux
[12:05] == End of WHOIS
[12:05] <JonWickedFire> Well, how much is unavail for you?
[12:06] <MagicalTux> I'm not even sure
[12:06] <JonWickedFire> Guys on Reddit and WickedFire are running around posting screenshots of horror stories about how much bitcoin they have lost from this..
[12:06] <MagicalTux> didn't check my wallet before pushing the site offline
[12:07] <MagicalTux> anyway
[12:07] <MagicalTux> maybe I should go to sleep now
[12:07] <JonWickedFire> Anything else you'd like to say to everyone before all the pissed off people start going nuts, even more...?
[12:09] <MagicalTux> not really
[12:09] <MagicalTux> maybe just a link? something like that: Why do we fall? - 9GAG
[12:09] <MagicalTux> well, we'll see how this one goes anyway
[12:16] <JonWickedFire> Well, I'd like to chat more, but I know you're pushing to go to sleep.
[12:17] <JonWickedFire> And so long as you are saying you're not disappearing from this.. that's okay.
[12:17] <JonWickedFire> I still think you should say something more to all these people or at least reveal how much you've taken a hit for, personally..
[12:17] <JonWickedFire> It would show them that you are still on their side.
[12:19] <JonWickedFire> By the way, that whole removal from the foundation, did you decide to leave that before or after the chats with them to help save gox versus let it fail?

[sonatine]

Not even considering slogging through that you ginger.

[BetCheckBet]

http://online.wsj.com/news/articles/...448992982.html

MtGox has been subpoenaed by the U.S. Attorney's office in New York, the Wall Street Journal's Christopher M. Matthews reports.

An unnamed source tells him simply that federal prosecutors sent the subpoena this month.

MtGox shut trading operations last night over what it says were "recent news reports and the potential repercussions on MtGox's operations and the market."

[BeerAndPoker]

[BetCheckBet]

Japan authorities looking into closure of Mt. Gox bitcoin exchange






TOKYO, Feb 26 (Reuters) - Japanese authorities are looking into the abrupt closure of Mt. Gox, the top government spokesman said on Wednesday in Tokyo's first official reaction to the turmoil at what was the world's biggest exchange for bitcoin virtual currency.

"At this stage the relevant financial authorities, the police, the Finance Ministry and others are gathering information on the case," Chief Cabinet Secretary Yoshihide Suga told a regular news conference when asked about Tuesday's shutdown of the Tokyo-based exchange.

Speaking shortly after The Wall Street Journal reported that Mt. Gox had received a subpoena from federal prosecutors in New York, Suga declined further comment.

Japan's Financial Services Agency and Finance Ministry told Reuters on Tuesday that they do not have jurisdiction over Mt. Gox after the exchange's website went down and efforts to reach company officials failed. The Bank of Japan said it had nothing to add to a comment by Governor Haruhiko Kuroda that bitcoin was "very interested" in bitcoin.

Mt. Gox later posted a statement on its site saying it had halted "all transactions for the time being in order to protect the site and our users."

Mt. Gox CEO Mark Karpeles told Reuters in an email: "We should have an official announcement ready soon-ish. We are currently at a turning point for the business. I can't tell much more for now as this also involves other parties." He did not elaborate on the details or give his location.

[DRK Star]

Japan authorities looking into closure of Mt. Gox bitcoin exchange






TOKYO, Feb 26 (Reuters) - Japanese authorities are looking into the abrupt closure of Mt. Gox, the top government spokesman said on Wednesday in Tokyo's first official reaction to the turmoil at what was the world's biggest exchange for bitcoin virtual currency.

"At this stage the relevant financial authorities, the police, the Finance Ministry and others are gathering information on the case," Chief Cabinet Secretary Yoshihide Suga told a regular news conference when asked about Tuesday's shutdown of the Tokyo-based exchange.

Speaking shortly after The Wall Street Journal reported that Mt. Gox had received a subpoena from federal prosecutors in New York, Suga declined further comment.

Japan's Financial Services Agency and Finance Ministry told Reuters on Tuesday that they do not have jurisdiction over Mt. Gox after the exchange's website went down and efforts to reach company officials failed. The Bank of Japan said it had nothing to add to a comment by Governor Haruhiko Kuroda that bitcoin was "very interested" in bitcoin.

Mt. Gox later posted a statement on its site saying it had halted "all transactions for the time being in order to protect the site and our users."

Mt. Gox CEO Mark Karpeles told Reuters in an email: "We should have an official announcement ready soon-ish. We are currently at a turning point for the business. I can't tell much more for now as this also involves other parties." He did not elaborate on the details or give his location.

[Dan Druff]

I think it's interesting that, after an initial crash down to 400, the non-Gox markets have recovered and sit at around 565 at the moment.

I don't like that at all. I think a second crash is imminent.

[sonatine]

I think it's interesting that, after an initial crash down to 400, the non-Gox markets have recovered and sit at around 565 at the moment.

I don't like that at all. I think a second crash is imminent.

I can guarantee its about to moon based on every logical indicator saying in the clearest possible terms the opposite.

[Henry]

chinese is buying

[Sanlmar]

Just got back from skiing. Looks like Bitcoin fell harder on the downward slope than I did.

However, it looks like it's gonna paint a dragonfly doji on the daily chart. This is usually a very positive reversal pattern.

there is gonna be a whole lot of "just get me the fuck out, I am even" resistance starting at $650 or so. I think people will let it run to there.

i am in on a break over $520. So let's say Stop @ $475 and target $620. Good EV

A nice cleansing of the weak and infirm sellers ought to have occurred here.

Edit: $520'ish definitely right number. Rainmain. Gotta plow through that to trigger buy.

We're in. This will not win any awards. $540 obv resistance.

Looking at the Bitstamp chart, if we close over today's open - that'll be a pretty cool reversal candle.

I am going to exit here at $590. Entry was $522. The rise was pretty quick.

That has been one hell of a linear rise from $400. Very overbought atm. Work needs to be done - retracements and profit taking from the folks who bought at the lows.

$600/620 the overhead and resistance begins. Why not just bag the quick profit.

[Sanlmar]

Having run away like a little girl...

I will say this bullish reversal pattern we are seeing on the daily is pretty fucking rare.

Example :


The actual BTC chart is even better looking than the above textbook example cause 5/25 has a "long legged dragon fly doji" at the bottom. If this wasn't a 24 hour market it might even be the holy grail of trading bottoms - the "abandoned baby doji". Always thought that was a cool name, lol.

If today's candle closes at $600 or more we get a bullish engulfing pattern. 5/26 green candle dwarfs 5/24 red. Traders love that shit.

I also think a lot of weak holders have been shook out by Gox and crash. This might actually turn out to be a good thing for near term price.

So all that said the chart looks great. Druff, I firmly do not see an imminent crash. Yet I say again, Bitcoin is a bubble in collapse, so bag your profits quick.

Might rebuy on a retracement back to $550... We'll see.

[Charham]

I have been thinking about the Japanese regulators distancing themselves from this. Seems very strange to me. This has been a fraud for a long time and clearly in the last few weeks to,pretty much anyone. Mtgox was saying things were safe and reliable, presumably taking new customers, while clearly things were not well. This is a fraud plain and simple. Forget bit coins, this is a plain scam with crypto currency thrown on top to try and cover it up. For the Japanese to walk away seems crazy to me. Just apply plain criminal laws. Irritating. I doubt any retires we're fleeced but they should close it down, seize everything and follow the money. Yakuza involved or something else must be going on.

Japan has insanely insular litigation laws, which are compounded by the fact that bitcoins are nothing but silly numbers generated by silly math with no intrinsic value whatsoever.

The yakuza involvement is a given really, as anyone with a cursory understanding of how Japanese politics works would understand, and also guarantees that Gox was able to grease the right palms ages ago to address this end game.

Regarding fraud, I dont believe this was a case of fraud at all. Banks are banks because there are laws regarding audit controls, among other things. Gox was no bank. They simply failed the correctly establish controls for inventory audits. Perhaps that was simply a blind spot for them, perhaps someone deliberately subverted that control. Either way, calling it a fraud is not entirely accurate, providing the narrative presented to date is accurate.

. Where is crosses a fraud for me (and if we knew all the facts I suspect there are many other frauds) is that over the last few weeks they have been trying to sign up new customers saying they are the worlds largest, they are safe, reliable, etc. when in reality they were not and knew it. For that alone Japanese should shut them down. As you say though Japanese legal system looks like it woks differently than what I would expect, and we may have yakuza etc.. The Fat frapaccino CEO doesn't seem that worried frankly, he is in failed start up mode, talking about new business models, relaunching , etc. this will play out, bigger story will be on what regulators do with this for the rest of bitcoin.

Ill just add that I was looking through some of the bit talk forums about people wanting to sue. Lots of small speculators were sending Mt Gox money even early this week. obv they did this with eyes wide open, sort of like buying lock poker money at a discount, hard to sue when you cant cash it.

[Dan Druff]

Not only that, but they were continuing to allow people to deposit money there in exchange for bitcoins that did not exist. That by itself is blatant fraud.

It's bad enough if you deposited there and your bitcoins vanished due to Gox's incompetence. It's much worse if you bought bitcoins since Feb 7, unaware that you were buying nothing and just contributing to the Gox Bailout Fund.

This has so many parallels to Lock Poker and Full Tilt, and anyone who doesn't see fraud isn't looking hard enough.

[Dan Druff]

Regarding people who bought this week knowing what they were getting into, I only partially agree.

Not every depositor on Gox was aware. Most were, some weren't. They still had the rhetoric on the front page how safe and reliable they were.

The burden is NOT on the buyer to know he is being scammed. If you take even a penny from someone based upon false pretenses (such as selling them bitcoin you don't really have), it's fraud. Period.

[Dan Druff]

Gotta love this arrogant frog:

February 26th 2014

Dear MtGox Customers,

As there is a lot of speculation regarding MtGox and its future, I would like to use this opportunity to reassure everyone that I am still in Japan, and working very hard with the support of different parties to find a solution to our recent issues.

Furthermore I would like to kindly ask that people refrain from asking questions to our staff: they have been instructed not to give any response or information. Please visit this page for further announcements and updates.

Sincerely,
Mark Karpeles

Asshole needs to learn some humility and either be honest with people or STFU.

Lol at asking people not to ask his staff questions after they've stolen from people.

I really hope someone finds this guy and gives him a good beating.

[abrown83]

Regarding people who bought this week knowing what they were getting into, I only partially agree.

Not every depositor on Gox was aware. Most were, some weren't. They still had the rhetoric on the front page how safe and reliable they were.

The burden is NOT on the buyer to know he is being scammed. If you take even a penny from someone based upon false pretenses (such as selling them bitcoin you don't really have), it's fraud. Period.

I remember reading awhile back that Gox fired most of their staff and hired a new staff.

That means to me one of two things. Either the staff was stealing and Mark didn't know about it, or Mark was stealing and the staff was rising up against him.

[Walter Sobchak]

Not only that, but they were continuing to allow people to deposit money there in exchange for bitcoins that did not exist. That by itself is blatant fraud.

It's bad enough if you deposited there and your bitcoins vanished due to Gox's incompetence. It's much worse if you bought bitcoins since Feb 7, unaware that you were buying nothing and just contributing to the Gox Bailout Fund.

This has so many parallels to Lock Poker and Full Tilt, and anyone who doesn't see fraud isn't looking hard enough.

I haven't followed this very closely but it seems that Gox was mixing its own funds with customer funds which were on account? That right there is shady as fuck and is illegal for any company in a regulated industry like banking, brokerage, etc.

[sonatine]

Re; Fraud

The grim truth is that there is more information in this thread than there was likely disseminated internally to Gox staff beyond the systems team and the management tiers above them.

They are a business, so its their mandate to try to sweat this out.

EG They may already be discussing receiving a BC loan designed to keep the engines pumping. It would make sense; if you were sitting on 500,000 BTC, would you rather loan out 200,000 and prop up the prices at $600USD a coin while scraping 3% off two thousand transactions a day, or would you rather sit on your 500k coins and watch them drop to $100 or less while scraping 3% of a few hundred (if not zero) transactions a day because you allowed Gox to poison the market, perhaps fatally?

Seems like pretty basic math to me.

[Dan Druff]

Just before Gox went down, the price shot up over $300 based upon a rumor that withdrawals were starting soon.

These rumors were based upon someone seeing bitcoin leaving Gox, so some idiots surmised that withdrawals were about to start (lol).

In light of what happened, it now appears to have been a last-minute looting of the company or insiders selling off the few bitcoins left so they could get their own money out.

Why is this not being discussed anywhere?

[sonatine]

Its unlikely that many other observers are looking at this through online poker colored glasses.

Personally, that wasnt the conclusion I reached at all, for example. I assumed they were testing mitigation of the exploitable code.