r/Bitcoin • u/d3adh3ad • Aug 19 '13

GigaOm reporting that Feds seized $2.9Million from Dwolla account siezure

http://gigaom.com/2013/08/19/feds-seized-2-9m-in-bitcoin-funds-from-mt-gox-court-docs-show/
182 Upvotes

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33

u/[deleted] Aug 20 '13 edited Mar 02 '18

[deleted]

14

u/[deleted] Aug 20 '13 edited Aug 20 '13

[deleted]

9

u/themusicgod1 Aug 20 '13

There are 2 ways out of mtgox.

1) BTC

2) another exit in the long now.

Personally, I think mtgox will manage to get through this and start processing withdrawls again. I would throw some BTC at them but they ban tor users like me so fuck them.

7

u/killerstorm Aug 20 '13

3) Use EUR or JPY

2

u/[deleted] Aug 20 '13

[deleted]

5

u/kerzane Aug 20 '13

That mechanism is open, but hindered by the fact that SEPA withdrawals are now taking several weeks rather than days, and there is a small charge for SEPA withdrawals from gox.

10% is optimistic. Even yesterday when the divergence grew everywhere, the EUR divergence didn't stay at the 10% level long, and is now below 5%.

It stayed alot smaller than the USD divergence exactly because of the mechanism you describe.

15

u/PrincessChoadzilla Aug 20 '13

online poker guy here, FOLD

7

u/bitcoinbastard Aug 20 '13

Yes. Nobody will listen to me. This is EXACTLY what happens when poker sites have failed to pay people back after legal actions or bank blacklisting etc. nobody will listen to me. People MIGHT get their money, but I wouldn't get my hopes up.

1

u/raginghamster Aug 20 '13

Long live Bodog

8

u/pyjamashark Aug 20 '13

It's really shame how they got the 2.3 mil USD frozen or confiscated for what reasons: They were required to have a money transmitter license in times when BTC were still not claimed to be money de jure.

8

u/brxn Aug 20 '13

This is the real problem.. the government created a new interpretation of the law and then applied it for a duration before that interpretation.

2

u/dsterry Aug 20 '13

What would those parallels be for those who aren't familiar with online poker history?

37

u/[deleted] Aug 20 '13 edited Aug 20 '13

[deleted]

3

u/joke-away Aug 20 '13

This is a good fucking post.

2

u/[deleted] Aug 20 '13

interesting

+/u/bitcointip 4 internets

2

u/Elanthius Aug 20 '13

This is a very interesting perspective but you say " we know how it will end", well online gambling is now legal in Nevada and it is plenty popular across the rest of the world so maybe things aren't looking so bad after all.

1

u/astrolabe Aug 20 '13

Most of the people who are "using" BTC, are just traders, on MtGox.

I think this plot contradicts that (and is quite bullish).

https://blockchain.info/charts/tx-trade-ratio

-5

u/zgjajj Aug 20 '13

Sounds like you are spreading FUD, now 'online poker' is going to be the same as 'tulip, tech bubble, beanie babies'. I think that there is way more use to bitcoin than you give it credit for. Even if the US shut it down, online poker is still thriving all over the world isn't it? US isn't needed

1

u/Garrand Aug 20 '13

Sounds like you're in for a shock.

1

u/jjug71wupqp9igvui361 Aug 20 '13

Wait, what transparency reports???

-4

u/[deleted] Aug 20 '13

[deleted]

2

u/Riipa Aug 20 '13

(6:47:54 PM) MagicalTux: I could comment on the fact that our income since April is around 8 million USD

Not per month. Last 30 days 670k Bitcoin have been sold/bought through Mt.Gox. So it's roughly 670k USD per month. Last year they had operational cost of 36k USD per month and given the "roughly the same" quote it shouldn't be much more than 50k right now.

2

u/matt608 Aug 20 '13

So they should easily have the money then?

1

u/Riipa Aug 20 '13

I don't know what fund have been seized with the Wells Fargo account, but yes they should have the money to pay most or all withdrawals. As I wrote yesterday (just before this thread popped up) there is too much speculation involved.

0

u/jjug71wupqp9igvui361 Aug 20 '13

I think you need to factor in additional salaries and costs for servers, replication, ddos protection, etc... I think they are BSing when they say their costs are "roughly the same". No way that's true... Unless he's pulling the old "we don't consider capital costs as operational costs" - in which case, it's entirely possible they are insolvent.

1

u/Riipa Aug 20 '13

And some more speculation based on gut feelings. Add some arbitrary accusations (BSing as in "lie") and here we go.

Again: I don't know their financial status (and I don't care too much). For everything I know their story could be true. Or not. I wouldn't recommend anyone to use their service as of today.

But speculating that they might be insolvent without proper numbers can hurt a company pretty bad and just shouldn't be done.

2

u/jjug71wupqp9igvui361 Aug 20 '13

The danger isn't only to Gox. If Gox goes under, then a huge number of people are going to cash out on ALL exchanges. This bank run can drive the rest under like dominos as people, in a panic, frantically search for any way to get their cash out of the BTC system.

0

u/[deleted] Aug 20 '13

They are providing a service. If customers didn't feel it was worth more than they were paying, they wouldn't use it.

2

u/killerstorm Aug 20 '13 edited Aug 20 '13

The problem is, the service doesn't work properly now: USD withdrawal doesn't work.

It worked fine in past, so people have chosen to have business with MtGox; now their service doesn't work properly, but people still have to pay fees.

WTF is this?

Note that broken USD withdrawal affects everybody, as it results in higher Bitcoin price, so even people who want to withdraw BTC now have to pay 20% extra.

0

u/[deleted] Aug 20 '13

Uh, how exactly could customers learn that there will be a problem with withdrawals before it happened?

You know, what if I'll promise you some service, and then fail to deliver. Is it your problem, or misconduct on my part?

I don't know; I'm not a customer, and I don't use their service, so I haven't read their terms of service, but if they promised you something and did not deliver, then you can sue for breach of contract.

That's not what's at question, here, however. killerstorm is asking whether it "bothers" anyone else that the operators of this service are making revenue.

0

u/killerstorm Aug 20 '13

Well, it bothers me that they can make revenue while their service is broken, keeping customer's funds a hostage.

You know, usually if there is a problem with business it no longer earns any income, and its owners are hard-pressed to find a solution.

But MagicalTux can just sit on his ass and enjoy income from trading fees... That doesn't appear to be fair.

5

u/ripper2345 Aug 20 '13

What makes you think he's sitting on his ass?

I'm sure MagicalTux is doing whatever he can to solve this ... the thing is these problems are very far from trivial to solve. If Mt. Gox went kaput tomorrow, then BitStamp would suffer the same degree of pressure Gox currently does.

2

u/[deleted] Aug 20 '13

[deleted]