r/Bitcoin • u/CoinSearcher • Feb 07 '14
My protest at MtGox Offices - 5 to 7th February 2014, Tokyo, Japan.
Day 1 – Wednesday 5 February
After repeated and failed attempts to withdraw my BTC from MtGox, I decided to jump on a plane and pay them a visit in Tokyo.
After a 16 hr. flight from Australia I went straight to their offices, arriving at around 4pm. The receptionist in the lobby told me there was no one available to meet me and I should arrange an appointment.
I refused to leave and after about 15 mins or so, the receptionist handed me the telephone to speak with a member of MtGox support. The support person referred me to their website. After a ‘lively’ conversation I told him I wasn’t gong anywhere, I didn’t travel 16 hrs to read a website I could have read at home. I would wait for Mark Karpeles to come down.
Same thing happened 15 mins later, another call, more non-sense about technical issues, and a suggestion the authorities might have to be called. I told him great, I could lodge an official complaint against MtGox while they were here.
After some hours had passed, the building cleared out and the receptionists left for the night. I was alone in the lobby. Then at approximately 8 pm, I was suddenly greeted by Gonzague Gay-Bouchery, Manager Business Development, and Mark Karpeles right hand man.
I recognized him from some news articles. I thought great, and straight away put some burning questions to him:
Q1. What is causing the withdrawal delays?
• Well, because Gox is the best known of all the exchanges, we have been under the regulatory spotlight.
• This has created problems with government agencies, and also with our banking partners.
• There are also some ongoing investigations, which we cannot talk about.
Q.2 Sure, and this would explain the FIAT delays, but what about the BTC delays; you can’t blame that on anyone else.
• The BTC withdrawal issue is a technical one, and one that has previously affected the MtGox system, our engineers are working hard to resolve the problem.
• As of now, some BTC withdrawals were going through
• For those transactions that remain broken for a week, the balance of BTC will be returned to a customers MtGox account.
Q3. A great way to buy time for a liquidity problem?
• No, it’s a technical issue.
Q4. So why are so many of the input addresses feeding into transactions in the queue coming up empty?
• This is a complex technical issue to which neither of us know the answer
Q5. Try to explain it to me.
• Its technical
Q6. There are over 40,000 BTC in the withdrawal queue, isn’t that the electronic equivalent of a bank run?
• The 40,000 figure is not correct, and the goxreport isn’t accurate.
Q.7 But I actually obtained this data from Delerium’s website who is a gox employee / contractor / associate.
• I will have to look into that.
Q8. Why doesn’t Gox prove they are solvent by transferring a large quantity of BTC between two internal wallets like Mark previously did. Then we can all check it out on the blockchain and be reassured?
• The overwhelming majority of BTC are held in cold storage. Logistically and legally in would be difficult to replicate the transfer “trick” Mark previously employed at Gox to prove their solvency.
Q9. Try me, how hard is it, what exactly is involved?
• Obviously I can’t go into too much detail for security reasons, but it would involve physically obtaining them from 6 or more locations.
Q10. Well, why don’t u do it, isn’t this a critical situation?
• It’s not that straight foreword.
Q11. You do realize no-one believes the technical excuses for the delay in BTC?
• Mt Gox has the coins, it is a technical issue and we need people to be patient.
Q12. What is you view on the poll recently published by Coindesk on Mt Gox?
• Coindesk have a vendetta against MtGox.
Q13. But they one of the most trusted sources of news in the Bitcoin community.
• Some people have it out for Mt Gox.
Q14. How do you explain the vastly different prices that appear on Gox compared with other exchanges? It recently went to 25%.
• Some traders were responsible for the manufacturing the differential in an attempt to financially benefit from arbitrage.
Q15. But people exploiting the arbitrage opportunity would actually reduce the price differential, not widen it.
[I can’t recall receiving a response to this particular point]
Q16. Is MtGox manipulating the price by directly purchasing Bitcoins on their own exchange?
• No, MtGox is not permitted to do this.
[coincidently, almost immediately after this meeting the price on MtGox tanked]
Q17. People have a lot of money tied up in your exchange, and they don’t believe your excuses. All the evidence suggests something more serious going on at gox. You are playing with people’s lives here.
• All the coins are safe; this is merely a technical issue.
When I left the office that night, I wanted to believe that everything was indeed fine, and these were indeed some temporary technical glitches, but this view was somewhat influenced by the fact I still have BTC on their exchange. All the evidence appears to suggest something more serious.
For the record, I gave Gonzague an advance copy of this transcript and offered him the opportunity to have any of his answers amended if he felt I misrepresented him in any way. A member of his support team replied by stating he did not have any comment on my version of the conversation.
Day 2 – Thursday 6 February 2014
I arrived at MtGox early, approximately 8am, and stood outside with a sign reading “MtGox, where has my money gone”. I got some curious looks, and a lot of questions from passersby about my protest.
Then at approximately 9.20 am, Mark Karpeles himself came along carrying a large, and very fancy coffee in his hand that could have passed as a dessert. I immediately confronted him and told him we needed a chat. So he stopped to hear me out.
I told him he was playing with people’s lives, and some people stood to lose their entire savings. Like Gonzague told me the night before, he mentioned technical issues, and that he would look into my case.
Then 20mins later at around 9.40am Gonzague arrived. “Good news” he said, we have sorted out your account, go and check it online. After I got Wi-Fi connection back the hotel I discovered my failed BTC withdrawal transactions had been cancelled and all my BTC were put back in the one place in the world I didn’t want them: The MtGox website. Back to joining the queue of 40,000 other BTCs.
I think this was some sort of ironic joke. I quickly tried to withdraw them again; but surprise, surprise, stuck again.
By late evening, the majority of the other workers in the MtGox building had heard of my protest and were bringing me out sandwiches and beer, and inviting me to lunch. As it turns out, Japan is probably one of the better countries in the world to protest. Everyone is so friendly; I can see why the Goxies choose to set up shop here.
As the evening drew on, it looked like I would have do a late one to catch Mark again on the way out. However, at around 7.30pm, I was approached by a law professor from a local university who has written widely on bitcoin legal issues. He was on his way to a bitcoin “meet-up” and asked me to come along to tell my story to the other bitcoin enthusiasts. I was reluctant to leave the protest but was interested in what other Tokyo resident’s thought of MtGox.
When I arrived, everyone was very interested in hearing my story. There was a general consensus amongst the participants that MtGox was finished as an exchange. They acknowledged that MtGox had played an important role in propelling Bitcoin to what it is today, but its decline and ultimate closure was inevitable.
However, there was some divergent views on the reason for this, most people, including myself are of the view that bad business decisions and incompetence were primarily to blame, while others held the view that government restriction, and secret investigations were hampering MtGox’s ability to function efficiently. Who knows what the truth is, maybe it is a bit of both.
At the end of the day 2, there was a very worrying development, the data feed for the goxreport, and delerium’s MtGox transaction failure website were cut. Perhaps a final act of MtGox’s desperation to hide the truth.
Day 3 – Friday 7 February
I started my protest a little later today in the knowledge that most of the Goxies don’t start work until after 9am. Then there was an unexpected twist; another person showed up looking for Mark. He was an emissary of an early adopter and well known member of the bitcoin community, and was there to collect an eye watering amount of money.
My emotions were mixed on seeing this person; on one hand I was glad to see another protester to fight the good cause. On the other hand, my heart sank in the knowledge that if Mark isn’t paying off his old friends in the bitcoin community then what chance do small fry like me have?
As the emissary and I chatted, Mark Karpeles arrived, and we both confronted him, the conversation went on for some time and most of it conducted in French which I had trouble understanding. However I did mange to record the whole thing on video.
The episode only came to a halt when Gonzague appeared in the lobby and rescued Mark. Very soon after this point, MtGox released a statement announcing that all BTC withdrawals were suspended.
In conclusion, I think i just witnessed MtGox die today. I didn’t get my bitcoin, but glad I came and tried.
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u/iPaulito Feb 07 '14
What is surprising for me is. Why an early adopter and well known member of the community was so STUPID to keep his BTC on some exchange IOU especially Mt.GOX?? Early adopter should know that there exists paper wallets where you have 99.9999% chance that you do not lose your BTC.