here comes preet bharara's long nose.
here comes preet bharara's long nose.
One theory that might be falling apart is Karpeles' plan to arbitrage the bitcoin by selling them on other exchanges.
This is because it looks like Gox was a lot more bitcoin poor (only 2000 left, according to the "Crisis" document) than cash poor ($20m).
Selling the last 2000 bitcoin on other exchanges would net only a small profit (to the tune of another $1 million at its best point). Unfortunately for Karpeles, it would also worsen the problem of not having enough bitcoin to enable people to withdraw them.
To me it looked like Karpeles was simply stalling, hoping that the crashing prices and decreasing faith in Gox would cause enough people to sell their nonexistent coins back to Gox at a huge loss (maybe he was even hoping for a return to $10 levels), to the point where Gox could then use their $20m cash to quietly buy coins to turn on withdrawals again. As seen in today's report, he was also trying to secure outside money to buy enough coins to allow substantial withdrawals, thus giving the air of legitimacy. This obviously didn't happen. The initially planned "controlled" withdrawals were clearly not to prevent price crashing, but rather because Gox simply didn't have the coins to sell. They were probably hoping that Gox prices would return to normal once withdrawals were enabled, thus people would start depositing coins back to Gox, and they could then stay afloat through transaction fees, until everything was back above water.
The huge flaw in this plan, of course, is the fact that Gox had already destroyed everyone's faith, and it was unlikely that anyone but an ignorant few would ever transfer another bitcoin into Gox from elsewhere. So, with only 2000 coins
I think Karpeles was hoping the Gox price would crash faster and harder than it actually did. Laughably, in the 2 days leading up to the shutdown, the price spiked to over $300 because someone saw a few coins moving out of Gox (lol).
Once the Crisis document was leaked, he realized the jig was up, and decided to shut the whole thing down to prevent things from even looking worse for him.
Some suggest that Karpeles stole the bitcoin and is blaming it on transaction malleability. I don't believe that. If he really stole the bitcoins, he could also easily have returned them a long time ago, and kept his cash cow business from falling apart. His actions here were those of a desperate man, not a criminal mastermind.
Yup, the inevitable march of the AD's looking for a little face time in the quest to help fund raising for that Senate seat that would make mom proud.Originally Posted by superallah
Even the Queen prolly won't defend Bitstamp as her likeness isn't found in any of the code.
Always alert to these flag patterns. Which way will it break? Lotta overhead $620 & above but a little investment by Tyler & Cameron and we have a story again.
Not looking good.
I haven't been following this much lately except for the obvious headlines and storylines, but has anyone been trying to actually follow the trail of where the coins went? That's one of the whole deals with bitcoins, that all transactions are recorded in the blockchain. I understand that the process would be crazy-work intensive to find, but jesus, this is the internet, and lots of dough is involved, and there's no shortage of computational power in the btc community.
So, is anyone on the trail? Does anyone know of any discussion of this? I'm not saying anyone'll be successful finding the coins in the end, but it seems like there HAS to be a search party or 30 out there looking, no?
I tried following the "investigation" of the blacksheep theft, and it looked to me like it fizzled out quickly as the coins anonymity worked. Once you get the keys that seems to be it. With so many jurisdictions involved and if the theft took place over the last few years, unless Mark stole them himself (agree with Druff that seems unlikely), I don't see how they can trace the thefts or at least recover anything. The hackers have had a long time to cover their tracks, and even then likely beyond the reach of anyone. I am guessing NSA could do it but dont have any interest (they can probably do anything), but so far most governments have shied away from doing much about this.
Last edited by Charham; 02-27-2014 at 01:37 PM. Reason: blacksheeptheft not silkroad
I've wondered this, too. But if this really occurred over a few years on a high-volume site, it may literally be impossible to track down. If Gox kept poor records of its own transactions, it will be challenging to ever find out what happened.
It sounds like their software was a mess, this article is kind of interesting on the topic of where the $/bitcoin went: http://www.theverge.com/2014/2/26/54...on-from-mt-goxI've wondered this, too. But if this really occurred over a few years on a high-volume site, it may literally be impossible to track down. If Gox kept poor records of its own transactions, it will be challenging to ever find out what happened.
Time shouldn't matter, because the trail is essentially written in stone, no? 1 out of every 20 bitcoins ever made took a trip out of one place/set of places and into some other set of places. I'm not saying you can put a name/face to a number or anything, or even get the coins recovered, but simply based upon the design of the system, it's incomprehensible that at least a big number of the coins should be able to be followed to their current wallets/locations. Even with washing coins through different services and shit like that, the massively large numbers involved would reveal the entry and exit points of any such washing service. I'm sure it's not an easy thing to figure out, but Christ, smart people with info and a mission can get some amazing things done rather quickly, such as the whole NioNio thing. Armed with hand histories and not a whole lot else, the entire UB cheating scandal was outed even with the host company actively trying to hide info. With bitcoin, this shit seems like it should be a lot more straight-forward, as all the transaction info is necessarily public already, and just needs to be interpreted, rather than gathered and interpreted. I dunno, maybe I don't understand the system as well as I initially thought I did.
Wow. As many as 18 employees? There turning over $50m a year and yet running it on a shoestring, sloppy coding, no audit. What a clusterfuck. Pretty sure if they employed just one jew they would have spotted the coins disappearing through their fingers.In recent days, some in the community have even speculated that the heist could have been an inside job. No one has claimed that Karpeles would intentionally steal the coins — Mt. Gox was his baby, after all — but the exchange had as many as 18 employees during various stretches, any of whom could have been aware of the previously published bug.
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in a stunning turn of events the asbergers posse on reddit are claiming its a massive conspiracy and the US gov seized the cold wallet.
"Birds born in a cage think flying is an illness." - Alejandro Jodorowsky
"America is not so much a nightmare as a non-dream. The American non-dream is precisely a move to wipe the dream out of existence. The dream is a spontaneous happening and therefore dangerous to a control system set up by the non-dreamers." -- William S. Burroughs
Might buy a couple coins if we get back to the low 500's. I think eventually we get back over $1k, but idk how low it'll go before then. Is coinbase the gold standard for BTC sites? I like the fact that they're based in San Fran and have VC dollars.
I can now buy 85 BTC instantly, starting today.
However, I have no interest to buy anything at the current 580-ish rate.
As people have said before if you are looking to trade Forex might be your best bet.
FWIW, I'm using Coinbase, have made two purchases and everything has gone smoothly. They are always a little above what you will see as the Bitstamp rate, but from what I've seen they seem to be the most trustworthy. The 4 day waiting period kind of sucks, and there are some issues trying to get instant purchase authorization with a CC, but all in all my experience has been positive.
BTW, first time in a while it has held steady at a decent rate.
ok seriously tho if youre going to embezzle, i dont know, maybe no one ever said to themselves "yeah im just going to go for it and steal $400,000,000 in a currency affiliated primarily with organized crime despite everything about me being public knowledge". im just saying i dont think thats every happened, which is cray because lets face it almost everything happens sooner or later.
"Birds born in a cage think flying is an illness." - Alejandro Jodorowsky
"America is not so much a nightmare as a non-dream. The American non-dream is precisely a move to wipe the dream out of existence. The dream is a spontaneous happening and therefore dangerous to a control system set up by the non-dreamers." -- William S. Burroughs
Here you go Tine...
http://www.cnn.com/2014/02/26/tech/i...tml?hpt=hp_bn1(CNN) -- The Dogecoin started off as a penniless Internet joke. But Matt Thompson plans on selling his vacation home for this meme-inspired currency.
The 27-year-old entrepreneur has been selling games and gadgets over the Internet for years, but nothing as big as his Wisconsin vacation home, which he is offering for 100 million Dogecoins.
Dogecoin (pronounced DOHJ-coin) isn't something tangible like the dollar bills in your wallet. It's an open source file-sharing form of cryptocurrency that was created by programmer Billy Markus in December 2013. The newbie cryptocurrency started off as a parody of Bitcoin, using the image of a perplexed Japanese dog. Chances are, you've probably seen Dogecoin's mascot somewhere on the Internet already. As the Shiba Inu would say: Wow, much coin-cidence.
But this satirical currency isn't just a punchline anymore. Through trading and transactions between users, the currency went from being worth nothing to being valued at more than $65 million, and it has a uniquely supportive community of users from the site Reddit.
Thompson, a user of Bitcoins since 2011, started buying and selling Dogecoins two days after they were made available online. But the early adopter didn't think of selling his vacation home for cryptocurrency until his property got no offers after several months on the market. His three-bedroom, two-bath home is one of 2,300 properties on sale in Sawyer County, in the state's northern woods.
To attract potential buyers, he decided to accept Dogecoins as a payment form. He sees potential in it.
"I don't mind holding on to (Dogecoins) for a multitude of reasons, including that I believe I can use them to further my business," he explained. Thompson, who lives in Minnesota, primarily sells video and electronic game accessories online. He's been able to buy and sell inventory from places such as China by using the digital currency. "It's safe and easy with minimal fees," he said. "To date, I've found it to be very good for supplementing payment methods."
Timothy Lee, who has written about cryptocurrency for The Washington Post, says Dogecoin can be a feasible alternative to Bitcoin, but it is important to put it into context. Bitcoin is the most popularly traded cryptocurrency and has the largest community of users in the digital currency realm. Dogecoin is one of the top 10 cryptocurrencies, but it has a far smaller following.
Ben Doernberg of the Dogecoin Foundation -- yes, the founders even established a nonprofit organization -- says what makes it special compared with its competitors is its community.
"It was important to the founders that the currency would be friendly and accepting. Most of these Bitcoin competitors are created to make a lot of money, but it's hard to generate a healthy supportive community," he said. Doernberg estimates that more than 100,000 people use Dogecoin actively.
That does make for a limited pool of users who can fork up Thompson's 100 million Dogecoin price tag, which translates to roughly $135,000. The value of a Dogecoin is about one-tenth of a penny, whereas a Bitcoin is valued at a hefty $630 -- and at their peak Bitcoins were trading at $1,200.
Even though the value of Dogecoin is only a fraction of other cryptocurrenices, that doesn't mean it's easy to earn.
There's a process, says Dogecoin user Lionel Vogt, who first shared Thompson's story with CNN iReport. The Georgia resident explained that people use graphic cards and their computers to help "mine" Dogecoins. (In doge-ism speak, it's called "digging" for coins.) Mining is the process used to create digital currencies -- it's where computers solve mathematical equations in exchange for Dogecoins.
It's similar to producing other popular cryptocurrencies such as Bitcoin, Litecoin and Peercoin.
Dogecoin even has its own website, which has step-by-step instructions on how to get started using the currency. It also features a flashy introductory video of an animated Shiba Inu flying through a fictional city on a rocket ship.
The Dogecoin community is doing more than just joking around and financing online shopping sprees. The currency is being used to raise money for events and people. Before the Sochi Winter Olympics kicked off, Dogecoin fundraisers helped send the Jamaican bobsled team and an Indian luge contender to Russia to compete in the Games. The Dogecoin Foundation and Reddit's r/Dogecoin community were able to raise more than $30,000 for the two causes.
Despite the Dogecoin community's generosity, Thompson says the cryptocurrency has its critics.
"So many people, especially people involved with Bitcoin, tend to believe it's a copycat. I really don't think you can be so shortsighted. I believe the value of an economic system is the sum of all of its parts. So, there is room for all sorts of coins," he said.
Markus, the creator of Dogecoin, explains that the currency is not meant to be a rival to Bitcoin. Both use the same technology. "Dogecoin wouldn't be where it is without Bitcoin leading the way," said the Portland, Oregon, resident. "Bitcoin is the trailblazer and Dogecoin is a friendly spin that helps introduce the world of cryptocurrency."
Dogecoin's longevity is also dependent on network effect, Lee explains. "Dogecoin is sort of this self-fulfilling prophecy," he said. "The more people who accept it, the more value it has. Bitcoin has a head start on that," he said.
Bitcoin has been around for five years whereas Dogecoin has been in circulation for three months.
With the cryptocurrency still in its infancy and only a fraction of the value of its popular counterparts, it begs the question: Has Thompson received any offers for his six-acre vacation home?
Not yet, he says. But he's definitely made an impression with the Dogecoin community. "I've been asked a lot of questions about this house, and I think it's a good effect. It gets more people talking," he said.
Dogecoin Foundation's Doernberg says all the chatter is a good thing for the digital currency.
"The U.S. dollar is only valuable because people are willing to accept it. In currency, that is the most important thing," he said.
"Dogecoin's priorities are 'let's get everyone to the moon,' " Doernberg said. "Cryptocurrency is really powerful and instead of locking it up for a few people, let's get everyone in the world on it."
Not sure if this was already posted, it came out over two weeks ago, but...
http://money.cnn.com/2014/02/12/tech...in-regulation/Bitcoin regulation coming this year
New York state's top financial regulator has detailed his plans to regulate bitcoins sometime this year.
Benjamin Lawsky, New York's financial services superintendent, said he will issue "BitLicenses" to companies dealing with bitcoins. That would mark the most significant step thus far in the United States to regulate the digital currency.
"Our objective is to provide appropriate guardrails to protect consumers and root out money laundering -- without stifling beneficial innovation," Lawsky said at a currency conference in Washington., D.C., on Tuesday.
Lawsky said Bitcoin exchanges should have to warn their customers virtual transactions are irreversible, bitcoin values are volatile and they should carefully guard their digital wallet keys.
"We've found in other areas of the financial world that strong, clear, concise disclosures are critical to earning the long-term trust and confidence of consumers," said Lawsky. "And virtual currency is no exception."
The state of New York might also impose rules on Bitcoin-related money businesses similar to those that govern banks, although it's unclear how that would work. Lawsky's office did not immediately provide additional details.
Bitcoin exchanges might also be forced to adopt "know-your-customer" requirements, which force financial institutions to keep an eye on customer behavior and report suspicious activity to law enforcement. And Lawsky is even considering rules for those who use their computers to "mine" and create bitcoins in the first place.
The largest obstacle for regulators is that Bitcoin was built not to be regulated. Unlike the centralized U.S. dollar system, where the government has a monopoly control on the production of money and doles it out to licensed banks, the Bitcoin universe is decentralized by design. They're produced by random players around the world. They're transferred seamlessly via nameless digital wallets.
Lawsky admits that Bitcoin's unique nature leaves government officials with more questions than answers.
"I think that's healthy -- particularly if we are being true to our stated goal of proceeding without any prejudgments," he said.
The state regulators' suggestions come after five months of inquiries that started in August. The Financial Services Department has met with Bitcoin experts, law enforcement and academics. It also held two public hearings last month in New York City that drew the attention of 14,000 people who tuned in online from 117 countries.
The question now is whether many Bitcoin exchanges would be subject to Lawsky's regulations. The two major Bitcoin exchanges in New York City that would have been regulated are lying dormant. Bitfloor shut down after getting attacked last year. BitInstant's website is down since its CEO was arrested last month for allegedly laundering money to users of online drug bazaar Silk Road.
Still, Lawsky believes regulation could add credibility to the still nascent, unstable currency.
"If we get those rules right, perhaps we can make New York and the United States a magnet for legitimate, well-regarded exchanges and other virtual currency firms," he said. To top of page
"Dogecoin (pronounced DOHJ-coin)"
uh, thanks for that....
LOL I was thinking the same thing
And to think that this whole time I thought it was pronounced Doggy-coin
Sonatine, apparently you have done some heavy lifting slogging through tl;dr class stuff that any non aspergers adult would find difficult.
Question:
Due to ICE pursuing Silk Road and the clear link between SR & largest exchange Gox...
Do you believe ICE/Homeland Security's seizure or the cold wallet killed Gox? Not Transaction Malleability - red herring.
03:12 <@ne0futur> when I were insisting , telling mark to disclose stuff
03:12 <@ne0futur> saying things like "fuck the lawyers, disclose"
03:12 <@ne0futur> he answered me once
03:13 < shadylog> ne0futur: with...
03:13 <@ne0futur> 2014-02-20 10:40<MagicalTux> le gouv. US veut pas qu'on disclose hein
03:13 <@ne0futur>US gov doesnt want us to disclose
[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
[12:02] <JonWickedFire> How much did you lose yourself?
[12:04] <MagicalTux>Well, technically speaking it’s not “lost” just yet, just temporarily unavailable
Transaction Malleability did steal a portion of bitcoins, but not the insane 99.7% amount. Gox is now unable to refill their hot wallet due to the seizure.
Gox likely had a tiered system of "hot wallet", "cold wallet" and "coldest wallet". It's possible the US Gov took control of the "coldest wallet", which would contain the largest amount.
Last edited by Sanlmar; 02-27-2014 at 09:02 PM.
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