What is the story behind MtGox and their French bank?

1
1) Technology. Imaging you are back in the 1940's. Pre-ATM's, pre-internet, pre-international calls, pre-computers. Cash was stuff that you put in vaults, and it would cost you an arm and a leg to call the next city. Under these situations, there is no real advantage to having a big bank, so that all of the banks in the United States tended to be small.

Now go to this world now in which you can connect thousands of branches with the internet and transfer money from point A to point B with some keystrokes, at that point you start having an advantage if you have a branch in every city in the world, and you are also in better shape if you can pull vast amounts of money to pay for computer geeks and specialists that can manage all of this technology.

2) Legal restrictions and globalization. In the 1930's, the US decided that it would be better off with a lot of small banks, so it turned out to be very difficult to have a branch across state lines or to have a lot of branches. The...

0 0
2
...
0 0
3

There has been a ton of speculation as to what happened in the catastrophic failure of MtGox. The only thing we know for sure is that it somehow “lost” upwards of 750,000 of customer BTC, valued around $450 million. A number of theories have been circulating on the internet. Here I’m going to talk about the one that seems the most plausible to me. H/t to /u/PuffyHerb on Reddit for most of this.

The theory is essentially that the U.S. Government seized MtGox’s cold storage wallet and Karpeles can’t disclose that information due to a gag order.

Before getting into that let’s recap the “official” story of what is believed to have happened.

MtGox was ignorant of the transaction malleability issue despite it being known for years and there being a wiki page dedicated to it. They tracked transactions improperly given the malleability issue (this may or may not have happened). They automatically reissued transactions when the transaction ID showed an unconfirmed...
0 0
4

The Normans were originally a Germanic tribe, but they had settled in Normandy in the north of France, and had adopted a modified French language and culture. As a result of the Conquest, the refinement of French culture came to be introduced into England and exerted a powerful and formative influence on its language and literature. The Norman Conquest introduced them to the cultural heritage of Latinized Europe.

The Norman rulers looked down upon the English as a barbarous and backward people, and despised the rude vigor of their language that lacked the elegance and grace of French. Naturally under their rule French had to be the language of the Court and the Government, and those among the conquered people who had dealings with the Government thought it prudent to learn French in addition to their own language.

The Conquest also tended to bring the native population together as never before, and the several dialects spoken in the different parts of the country were...

0 0
5

Here's the backstory, as cobbled together by Dick Clement and Ian La Frenais. The thieves were a bunch of small-time hoods that had been put up to the bank robbery by a beautiful acquaintance. The masterminds of the plot, however, were actually agents in MI5, the British counterintelligence service. They wanted to get their hands on a safe deposit box owned by a Trinidadian gangster named Michael X -- because it contained candid sex photos of a member of the royal family.

The heist became known as the "Walkie-Talkie Robbery" because the burglars communicated via two-way radio, and a ham-radio operator caught their conversations on tape as the crime was in progress. He called the police, but they couldn't pinpoint the location -- and there were 750 banks in the search radius. So the thieves fled with their booty, and the crime was discovered at the open of business the next morning.

Naturally, the robbery was front-page news, but all coverage suddenly stopped after...

0 0
6

Bitcoin attracts its fair share of scams and hucksters, but so does any new enterprise — and that’s no reason to judge the virtual currency itself. Recent events, however, raise hard questions about who is overseeing the currency as it moves into the mainstream. Is it time to replace Bitcoin’s loosely organized governance structure with something more formal?

The latest controversy, in case you missed it, involves MtGox, the earliest and most famous exchange for people to buy and sell bitcoins. The Tokyo-based company has been mired in liquidity problems ever since the feds seized one of its bank accounts last year, but things became even more serious this month upon reports that MtGox would not let customers access their own bitcoins.

A flurry of press reports and a fall in prices led MtGox to issue a statement placing the blame on a defect in Bitcoin itself — specifically, a “bug” that allows scammers to dupe the ledger that tracks all Bitcoin transactions. One of...

0 0
7

This post is by my friend, Andi Cumbo. You can (and should!) find Andi on her blog

andilit.com

. You can follow her on

Facebook

and

Twitter

(@andilit) as well. Thanks for joining us today, Andi!

Ted Gup gave me lots of great writing advice when I was in his creative nonfiction class in grad school. Write through to the end; don’t edit as you go. Don’t talk about what you’re writing because that steals the life from it. Be careful about parroting yourself.

But by far the best wisdom he ever shared with me was this, “Look for the story behind the story.”

Photo by Kevin Dooley

It’s a profoundly simple concept when I think about it. All of the stories we love—be they fiction, oral history, biography, or fable—have a truth that sits behind the action of the story itself. In some work—see Aesop and many children’s picture books as examples—the truth is right out there, a moral lesson blatantly painted.

But in other works—J.R.R....

0 0
8

Late this week, Canadian Bitcoin holders filed a class-action suit against defunct online Bitcoin exchange MtGox. The suit named MtGox, its affiliates, and its two major shareholders, Mark Karpeles and Jed McCaleb, as well as Japan's second largest bank, Mizuho Bank, where MtGox kept an account.

In the US, a class-action suit that was filed in late February was amended late Friday afternoon to name another primary plaintiff as well as several new defendants, including “John Doe defendants” and Mizuho Bank. MtGox KK filed for Chapter 15 bankruptcy protection in February, shielding it from lawsuits in the US, but MtGox's executives, its parent company Tibanne KK, and its US subsidiaries are not protected, Reuters notes.

MtGox found itself in dire straits last month, when it appeared to have lost 750,000 bitcoins belonging to its customers as well as 100,000 of its own Bitcoins after weeks of DDOS attacks and “transaction malleability” problems. In total, MtGox is...

0 0
9

The important answer is on https://support.mtgox.com/entries/20568322-all-eur-transactions-will-be-temporarily-suspended-within-europe-with-immediate-effect

quote :

"While Bitcoin at a European level is so far not directly impacted by this decision, the Bank de France (France's central bank) has confirmed that because of European banking rules, monetary transfers (deposits and withdrawals) through a single entity are subject to financial regulation and therefore can only be performed by licensed financial institutions such as banks or Payment Service companies (the European Equivalent to a Money Service Business). This decision has forced us to find other payment processing partners within Europe that will allow us to quickly resume all EUR transactions for our European customers soon."

To be allowed to accept deposits, keep your funds, and allow withdrawals, mtgox ( and any other European based exchange, like virwox for example ) have to be...

0 0
10

From a distance, the world’s largest bitcoin exchange looked like a towering example of renegade entrepreneurism. But on the inside, according to some who were there, Mt. Gox was a messy combination of poor management, neglect, and raw inexperience.

Its collapse into bankruptcy last week — and the disappearance of $460 million, apparently stolen by hackers, and another $27.4 million missing from its bank accounts — came as little surprise to people who had knowledge of the Tokyo-based company’s inner workings. The company, these insiders say, was largely a reflection of its CEO and majority stake holder, Mark Karpeles, a man who was more of a computer coder than a chief executive and yet was sometimes distracted even from his technical duties when they were most needed. “Mark liked the idea of being CEO, but the day-to-day reality bored him,” says one Mt. Gox insider, who spoke on condition of anonymity.

Last week, after a leaked corporate document said that hackers...

0 0
11
...
0 0
12

This story was corrected on 4 November. Due to an editing error Kraken’s response to our request for an interview was omitted.

More than 18 months after the MtGox bitcoin exchange filed for bankruptcy in February 2014, little is still known about what happened to the 850,000 missing bitcoins. The now defunct Tokyo-based company claimed hacker malleability attacks—illicit alterations of transaction ID numbers—were responsible for the disappearance. MtGox users who traded the virtually currency for fiat money suspected fraud. Whatever the reasons, the fallout appears to have been a financial calamity for Bitcoin investors: the value of a bitcoin dropping from a peak of over $1,000 prior to the exchange’s collapse to around $232 today.

Although investigators remain tight lipped about their findings, Tokyo Metropolitan police took Mark Karpeles, the CEO of MtGox, into custody in August on charges of manipulating company accounts and stealing from exchange users. Then on...

0 0
13

TOKYO Mt. Gox, once the world's biggest bitcoin exchange, filed for bankruptcy protection in Japan on Friday, saying it may have lost nearly half a billion dollars worth of the virtual coins due to hacking into its faulty computer system.

The collapse caps a tumultuous few weeks in which the company has remained virtually silent after halting trades of the crypto-currency, shaking the nascent but burgeoning bitcoin community.

Wearing a suit instead of his customary T-shirt, Mt. Gox's French CEO Mark Karpeles bowed in contrition and apologized in Japanese at a news conference at the Tokyo District Court, blaming his firm's collapse on a "weakness in our system", but predicting that bitcoin would continue to grow.

"First of all, I'm very sorry," he said. "The bitcoin industry is healthy and it is growing. It will continue, and reducing the impact is the most important point."

Angry investors have been seeking answers for what happened to their holdings of...

0 0
14
This is the possible Story behind Mt.Gox

“By the time you realize that real life has begun, you are already three moves in.”—Author unknown

It was June 19, 2011. Mark, a 26 year-old young man—a boy really—was ecstatic. He had recently purchased MtGox—a small, online exchange for trading virtual tokens—and business was booming. These virtual tokens were called bitcoins and Mark loved them.

Bitcoins were an obscure curiosity: a peer-to-peer electronic cash system that allowed users to store and exchange credits with any other user in the world, nearly instantly, and without the assistance of a third-party or the permission of an authority. All that was needed was a 78-digit secret number—a key if you will.

In order for his customers to withdraw their bitcoins over the internet, MtGox stored some of these keys on its online server. The remaining keys were stored on USB drives and backed up on paper to prevent theft should the server be compromised.

But...

0 0
15

MtGox Overheats with Bitcoin Price in April 2013

The media started to talk about bitcoin quite a bit in early 2013, and all that hype eventually led to one of the largest bubbles in bitcoin’s history. MtGox was responsible for roughly 75% of all bitcoin trading at this time, and it seemed as if everyone was trying to get into the bitcoin market at once. The price kept rising to around $250 on MtGox until the exchange started to stall and lag behind the orders that were coming in from users. It’s possible that the inability for MtGox to handle this new influx of users harmed bitcoin’s reputation as a new digital currency.

Read the first part of the story: The Rise and Fall of MtGox: A Complete Timeline (Part 1)

MtGox ended up suspending trading on April 11th and 12th for a market cooldown. MtGox returned to trading roughly 150,000 bitcoins per day by next month.

Problems with the Legacy Banking System

Throughout its history, MtGox also had...

0 0
16

Japanese police have arrested the chief executive of the failed company MtGox, which was once the world's biggest exchange of the virtual currency bitcoin.

Mark Karpeles is being held in connection with the loss of bitcoins worth nearly $US400 million, which prompted the company's collapse in February last year.

The 30-year-old is suspected of manipulating data on the exchange's computer system in 2013 to artificially create about $US1 million.

It was not immediately clear if there would be more charges against Karpeles, who reportedly denied the allegations.

The global virtual currency community was shaken by the shuttering of MtGox, which froze withdrawals in early 2014 because of what the firm said was a bug in the software underpinning bitcoins that allowed hackers to pilfer them.

Police said investigators suspect Karpeles knew details about the missing bitcoins which were reportedly transferred to an account controlled by him without...

0 0