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Statement Regarding Temporary Hiatus on U.S. Dollar Withdrawals (mtgox.com)
161 points by citricsquid on June 20, 2013 | hide | past | favorite | 112 comments



FFS, the original title, something like "Mt. Gox suspends U.S. Dollar Withdrawls for two weeks", was FINE.

"Statement Regarding Temporary Hiatus on U.S. Dollar Withdrawals" makes NO SENSE out of context.

Mods: Please STOP rewriting titles to match the page! You're NOT doing it right!


I also hate how it makes it seem like a new post, but then you click through and see the same comments.

I hope it's automated, otherwise someone is wasting a lot of time on busywork. It's like that guy who reformats all your code just because.


Another suggestion would be to add a little "title edited by: MOD_USERNAME" tag to any edited titles so we could at least keep track of the moderators who are doing it incorrectly.

As it stands, I have no idea if pg himself edited the title or if it was some random user who recently acquired the correct amount of karma.


> or if it was some random user who recently acquired the correct amount of karma

I certainly hope moderatorship isn't granted based on a karma threshold.


If it's based on a karma threshold, I haven't reached it yet, which would mean that the bar is fairly high.


If you want karma all you have to do is submit a lot of garbage, just keep it coming. Most of your submissions will get 0 votes, a few will get you 10 or 20 votes, and one or two will get you 300-400. That's how downvoters get their downvoting powers.

Another option is to submit quality comments for a decade without being banned for saying something against Ruby or whatever the mods are emotionally or economically attached to at the time. Then you may be able to downvote.


>Another option is to submit quality comments for a decade without being banned for saying something against Ruby or whatever the mods are emotionally or economically attached to at the time. Then you may be able to downvote.

That strategy has worked for me.


> created: 741 days ago

That’s one short decade!


No one has said that HN karma is worth anything. I was just providing anecdotal evidence on whether or not there is a karma threshold for moderator status.

Also,

  | for a decade
HN hasn't been around for a decade.



Certain permissions are, like when you get over 500 karma for example as you should soon: you will notice a downvote option beside comments that are not a directly reply to your own.


They are Yc alum


What difference does it make whether pg did it or someone else did? The change was not a good idea.


I agree. The idea that a submitter might add some value to the summary through a better title doesn't seem strange for a site that is based around the idea that its members add value through collection and commentary upon those articles. Why is this one piece of data sacred?


Hate to quote myself, but see the P.S. here: http://news.ycombinator.com/item?id=5568610

If I were a gambling man, I'd say this is quite likely to be shoe #1.


Hardly shoe #1, more like #8 or #9. With the take down of Liberty Reserve, the killing off of a number of exchanges and interfaces to exchanges, its pretty clear the US Government at least has decided to focus for a time on the financial infrastructure which underpins a big chunk of Internet criminal activity. The privacy advocates are getting somewhat caught in the crossfire.

As a company that works with internet advertisers, we see the shadowy parts of the web shimmering there on the periphery, lots of people are trying to scam Google out of some of its advertising revenue, it is a full time job to identify and quash fraudulent traffic here at Blekko, I know from experience that there are many folks at Google that do nothing but that.

But more than that, it says that these activities have reached the nation-state level of attention. Which puts the global losses in the 150 to 200 billion dollars annually.

The effect of that is what Patrick experienced where regulators start effectively 'regex' banning types of activities that are associated with these activities. It's a cold compress on an arterial bleed, not a solution but something to stem the blood loss while other measures are being taken.

It is really all about cash though. When crime doesn't pay, people don't do it. So focusing on making it hard to get paid is the strategy it seems to work on Internet criminal activity. If I had to bet I'd say that someone in the Treasury department has a goal of (ideally) making it impossible to use BitCoin to facilitate criminal activity, through a series of regulations requiring transaction reporting and verification, killing off exchanges that don't do that, and pressuring partners to do the same.


It doesn't really make it that hard to cash in. See http://localbitcoins.com . You'll just get a slightly lower exchange rate. If they thought they didn't want people receiving traceable wire transfers from Mt. Gox, imagine how little they will like the alternative they are pushing people to - in-person cash trades.

>The effect of that is what Patrick experienced where regulators start effectively 'regex' banning types of activities that are associated with these activities.

What Patrick experienced is a symptom of the rules surrounding ACH transactions - namely that they can be charged back up to 6 months later (1 year in some cases). That makes banks squeamish about accounts receiving large numbers of them. I don't think ACH transactions in general are "associated" with criminal activity - most paychecks are delivered this way.


In person cash trades are easier to bust. Especially if there's much in the way of volume or the transactions are sizeable.

They are also far more hassle and potentially dangerous.

Don't pretend that making electronic transfers harder wouldn't suppress the market to some extent.


Yeah, but there is nothing illegal about an in-person cash trade, so what are you going to bust them for? (Well, I suppose the cops can always find something to bust someone on...)


There are all sorts of inventive ways the cops can seize money, especially if the amounts are both large and frequent.

In some places carrying huge amounts of cash is more than enough to get the cash temporarily impounded pending investigation, even with no other immediate suspicious circumstances.

Besides which, the point was that (in general) forcing users into these sorts of arrangements is much more onerous on them than just sorting it all out electronically.


We probably saw the beginning of this problem a month ago - https://news.ycombinator.com/item?id=5707936 . I can't imagine that the two are not related.

Also from the https://support.mtgox.com/entries/21649594-Withdrawals-and-D... :

OKpay has made the decision not to work with any Bitcoin exchanges as of May 29, 2013.

Dwolla has closed our account as of May 15, 2013.

All of the recent closures don't exactly instill confidence. Still, it might be possible to form or partner with a Japanese entity and receive domestic transfers from them.


I agree. I'd read this statement as: none of our partner banks will do USD withdrawals for us anymore. We think we might be able to find a new bank within two weeks.


Yep. I'd bet real money on that being the root cause. I'm not so sure about the new bank thing though.


Unfortunately true. I'd hate to tell everyone with money in mtgox that it is time for a bank run, but...


Luckily, everyone with deposits in Mt.Gox can convert them to bitcoins and send them to some other address. This is one of the benefits of Bitcoin.


> Luckily, everyone with deposits in Mt.Gox can convert them to bitcoins and send them to some other address.

If you have US dollars on Mt.Gox, and no one can take US dollars out of Mt.Gox now and there is very low confidence that this will change in the future, its going to be very hard to find anyone give up any other currency or virtual currency for US dollars -- whether you want bitcoins, yen, slips of latinum, or triganic pu, no one is going to give you them for dollars on Mt.Gox if dollars deposited on Mt.Gox are trapped.


Sure they will, coinbase will quite happily turn them back into USD for you.


If you have bitcoins on Mt.Gox, sure, you can get USD for them elsewhere.

The issue I was raising was that if you have USD on Mt.Gox and people don't think USD will be able to be extracted from Mt.Gox, you will have trouble converting your USD to bitcoin to get it off Mt.Gox, because people who have bitcoin on Mt.Gox will be reluctant to convert it to USD on Mt.Gox.


That's true, but I'm unclear why you'd store USD for any length of time on mtgox anyway.


> That's true, but I'm unclear why you'd store USD for any length of time on mtgox anyway.

The same reason you'd keep any currency in an account tied to a particular marketplace: liquidity that allows you to trade without the delay of getting money into the marketplace from somewhere else.


It takes a long time to transfer money into MtGox and with the wild price fluctuations it might be prudent to wait for a better price instead of buying at the current market price the second the transfer clears.


Exactly what I did when I heard about dwolla no longer offering withdrawals for MtGox....I love coinbase! It's so simple and the UI is clean.


Unfortunately, nobody will be willing to sell bitcoins for USD on mtgox if they can't ever get their USD out.


That seems to be what's happening at the moment. I initially assumed this announcement would cause a panic sell-off, instead it seems as if a lot of users are now converting their USD back into BTC in light of the hiatus. The exchange rate has ticked up pretty steadily as a result.


If it was just a MtGox only issue, then bitcoins on MtGox ought to be at a premium compared to the other exchanges. But if you look at http://bitcoincharts.com/markets/ it seems like MtGox is perfectly in line with the other markets - within half a dollar of Bitstamp and actually cheaper than BitBox etc.


Check again -- look at http://bitcoincharts.com/markets/currency/USD.html. There's a significant premium on MtGox. At the time that I'm writing this, the values are

    mtgoxUSD:     112.99
    bitstampUSD:  107
    btceUSD:      106.87
    cbxUSD:       106.12
    vcxUSD:       105
    bitoxUSD:     95


I get a different version checking now - MtGox isn't even the most demanding of Bitcoin:

    icbitUSD    100
    bitstampUSD 103
    btceUSD     106
    cbxUSD Camp 107
    mtgoxUSD    109
    rockUSD     109
    bitboxUSD   118
It's tied with rock, and as I said, below BitBox. Looks like Bitstamp has diverged more, though.


This is true, but Mt. Gox historically has the lowest exchange rate as they have far more liquidity than other exchanges. Gox is also the primary indicator against which other markets rise or fall, today is no exception.

In an unrelated note, big fan of your site.


If mtgox crashes bitcoin crashes, at least temporarily. You'll end up with your bitcoins safe, but they won't be worth $100+ anymore (if ever again).


Right, but my guess is people who have dollar holdings on mtgox aren't going to find it as easy now to sell them in order to do such a transfer.


This assumes they haven't already spent some of their depositors' bitcoin and can run out. (Not claiming they have done this, just pointing out this scenario is possible)


I don't know about US law, but in Europe if you're a financial institution and you suspect a customer transaction is involved in money laundering or a similar it's a criminal offence to inform the customer without first clearing it with the relevant legal authorities.

If there is some kind of investigation going on MtGox might be completely unaware of it, saying "there's a backlog" is a pretty common way to provide cover while such an investigation is on-going.

One of the reasons you get fully licensed as a financial institution by regulators is that you get some level of legal protection/ring-fencing from the activities of your own customers.

(IANAL but I used to work on real-world forex trading desk in a previous life, hence had to undergo the mandatory FSA training)


In the UK, you can never inform the customer - that is the offence of "tipping off".


IIRC You can with the consent of the FS(C)A


The weird thing is that MtGox made a deal to (effectively) sell themselves to Coinlab which would have either fixed these problems or at least made them not Gox's problems. But then they went back on the deal.


I wonder about the economics. Could this just be an issue of them deciding to close down altogether? I don't know why, but this read to me more like a run on a bank, rather than a compliance issue. What did people do in the Great Depression? Bank holidays....


Unlikely. MtGox is not a bank. They charge commission on every trade and make pretty good money. They were running just fine 1 year ago when the volume was few times less so it's unlikely they are having financial problems now.


Did they shut you down for risk or for using a personal account for business?


For those willing to wait, this should temporarily make arbitrage more profitable. People that cannot wait 2 weeks for withdrawals will have to use their USD balances at Mt Gox to (re)purchase Bitcoins, which can then be moved to other exchanges and sold. This will cause a temporary, artificial increase in demand at Mt Gox only, leading to a higher-than-normal price differential between it and other exchanges.

That said, this is only the latest snafu with these guys. I am tired of all of the issues at Mt. Gox. Someone else really needs to step up in their place.


Over the last few weeks, bitstampUSD has moved from 6% to 14% on this chart. My guess is that only accelerates that process.

http://www.bitcoincharts.com/charts/volumepie/


Indeed, MtGox is trading about 5% higher than other USD exchanges right now.

There is a (small?) risk that this could be a sign of bigger trouble to come. I don't know if I'd be comfortable leaving USD funds in MtGox right now. Maybe that's a risk others are willing to take.


Agreed. It may be smarter at this point to buy Bitcoins with you USD balance and sell them for EUR, GBP or JPY. The volumes are smaller but it is possible.


just do it


A reminder: bitcoin, like tor, is useless if the government has a realtime analysis of the L3 network traffic of a majority of the participants, as we have learned they do in the US under NSA's MAINWAY and MARINA programs.


Not true: A new transaction in the bitcoin network isn't linked to any IP address, since transactions diffuse through the network haphazardly: There's nothing to distinguish between a transaction coming from elsewhere and a new transaction originating in the client. The only way to figure out the originating IP address would be to collect all data on close to 100% of the network and analyse the data in a sophisticated way.

Hunting down a money trail through the block chain by getting user data from exchanges or points of purchases without trying to determine the raw IP for a particular transaction is much more tractable, as others have pointed out.

EDIT: User "sneak" has changed the wording of his original comment, so this reply now doesn't make as much sense)


I'm pretty sure an eavesdropper can simply watch for outgoing transactions which you never recieved and deduce that they originated from you. No fancy network analysis needed.


Exactly right. However, it means they would have to have direct access to 100% of the traffic from the user in question, while the original comment referred to having just a percentage of the backbone (user "sneak" has since edited the original comment to use different wording)


True, but that depends if you want to go from Bitcoin addresses to IP address or vice versa.


The avarage Bitcoin trade is not ananymous. You have to provide identification with most exchanges and you'd have to invest a lot of effort to stay really anonymous.

The primary benefit of Bitcoin is it's speed utility (you can send money to anywhere within minutes and low fees) and the inability to freely create infinite amount of it (scarcity).


I don't think the entire usefulness of Bitcoin is related to staying anonymous as it's actually pretty hard to stay anonymous when using Bitcoin.

Also, wouldn't the government need to be operating a certain percentage of the Tor nodes to do effective traffic analysis?


"Also, wouldn't the government need to be operating a certain percentage of the Tor nodes to do effective traffic analysis?"

Not if they can conduct surveillance on the entire Internet.


You establish a random circuit through the Tor network when you first connect. Even if the NSA is analyzing every packet between every node, they're not going to be able to distinguish your packet from anyone else's. I think they would need to control some of the nodes to keep track of packet sources and destinations.


You are wrong. Tor does not include any latency, so a passive global adversary who can watch every packet can correlate your input to the Tor network with the traffic between nodes and the outputs of the exit nodes, and thus break the anonymity property. The reason this does not apply to anonymous remailers is that they randomly permute the messages they receive, sending them out in a different order than they were received; this creates far too much latency for use with HTTP or IRC or other common protocols, so Tor sacrifices security against a global adversary.

http://www.cs.usfca.edu/~ejung/courses/f11683/lectures/tor.p...

http://mice.cs.columbia.edu/getTechreport.php?techreportID=5...


It's still useful, just less anonymous.


From bitcoin.org: "Bitcoin is not anonymous"

  http://bitcoin.org/en/you-need-to-know


Yeah I should have been more specific: less pseudononymous.

Eavesdroppers (local, ISP, or NSA) can link specific addresses to your IP address when you make a transaction.

One workaround is to use a hosted online wallet or submit pre-signed transactions to the network through a third party like https://blockchain.info/pushtx (assuming the connection is secure, including resistance to traffic analysis isn't possible)


Why pasting as code making it impossible to click on it?


Is there any theoretical way to defeat these programs and ensure anonymity? I'm even suspect of SSL given private keys can probably be demanded through FISA court.


The 100% theoretically guaranteed method is the zerocoin extension: http://zerocoin.org/


Caveat, much higher bandwidth and data storage requirement.

One ZeroCoin transaction takes the bandwidth/storage space of something like 100 (or was it 1000?) Bitcoin transactions. That could add up fast.


Well, not fully defeat, but you could make yourself less of a target by using a series of shell accounts and effectively laundering the money.

Just Google laundering. Techniques are widely publicized and accessible.


Use separate hardware on public wifi. Take the battery out when you're done.


Was that a joke?

What does public WiFi have to do with anything? We're talking about the NSA wiretapping Internet backbones and forging SSL certificates.


We're not talking about forging ssl certs and never have been. NSA doesn't do that and never will, for reasons which are totally obvious if actually think about what would happen if they did.


By "forge" I meant using the private keys (obtained through FISA, or possibly cracked) to either decrypt or MITM SSL sessions, not using one of their own CAs to create a valid but obviously fake certificate, which I assume is what you thought I meant.

Maybe "forge" was the wrong word.


I think (not an expert) that with elliptic curve Diffie-Hellman (which e.g. Google uses), even with the private key and the whole session, you still can't decrypt the session (Diffie-Hellman provides a secure channel, public/private proves the server is who it says it is).


That is correct. These are referred to as ECDHE, or DHE for the non-ECC variant (vanilla DH). The last e is "ephemeral", referring to the lifetime of the session key.

The property that this provides is known as "forward secrecy".


Assume they have access to the original pricate keys.


We're talking about anonymity, not secrecy.


Oh I see. That works as long as nothing you do online can identify you. That rules out the vast majority of things people do online.


Why taking the battery out? Are you talking about a smartphone or a laptop?


It's only as useless as the stock market and SWIFT.


LocalBitcoins.com still up and running: https://localbitcoins.com/sell-bitcoins-online/usd/


  as well as debuting a dramatically improved trading engine
  which will be launching very soon
They wedged that one in there at the last minute, but this tidbit could have more impact on the future of the company than the rest of the release. One of the main gripes of Mt. Gox has been the lag-prone trading engine and the spotty real-time data feed.

Fixing those two things could help them keep customers they have and potentially attract more traders who rely on speed in their strategies.


imho they're just serving up a compliment sandwhich of sorts: http://www.urbandictionary.com/define.php?term=compliment%20...


Just FYI, I made 6 bank withdrawals in Euro two months ago, and I still have only received 3 of them. They've used up all their goodwill with me.


Currency of the future. I've also been waiting on my second withdrawal forever.


Your withdrawing in your local currency, right? The problem is with Mt. Gox and their ability to give you fiat, not Bitcoin.


Yeah, and what do you think would happen to Bitcoin if all the exchanges vanished? How long do you think the Bitcoin economy can survive on its own?

The reality is that for the majority of its users, Bitcoin is not a currency; it is just a way to make payments in other currencies.


So it's like gold, but better.


The best way to withdraw money from mtgox is to post a sell ad on bitcointalk.org in the currency you wish to withdraw, set your price about 3-5% above daily average (as long as that is at or below the cost to buy coins immediately) then sell the coins to someone for a bank transfer in your local currency, saves having to wait weeks for your money.


I suppose you've talked to support about this? What's their excuse?


They say the bank processes a queue and there's nothing they can do to speed it up. Every couple of days a support guy leaves a message on my support ticket stating that they're still waiting for the bank to process stuff. MtGox is very obviously in over their head.


Any theories how this will fair for the market cost of Bitcoin?


Although it could have some impact, your money isn't "locked" with MtGox due to being able to transfer it to another exchange as Bitcoins, and cash it out as another currency there.


Most on Mt. Gox don't have secondary accounts, and this is more likely for those who are looking to make short term $ (and who tend to panic sell). For the various exchanges they could move to, what's the turnover time to be able to trade and more importantly, make USD withdrawals? Will the other exchanges be ready for this? How exacerbated could this be if there's a price drop?


A comment based entirely on speculation. Do you know for a fact that most people on Mt Gox don't already have another account elsewhere or can't figure out how to create one?


Little affect these days. There are other brokers out there which helps stabilise the price of bitcoin.


Price has been pretty stable for awhile now. There's always 'the crazy periods' when it get's hyped up and the price is all over the place, but in general the price hovers around plateaus. Currently around ~$100.


Possibly raise the price on MtGox as people who want their cash will have to buy BTC with it and then sell them for USD elsewhere.


Buy it from whom? Who is going to sell BTC for USD without some confidence that they can actually receive the USD from MtGox?


Any news, no matter what it is, immediately causes panic selling. So, short term price drop. Then? Who knows?


Except that it's up slightly since this news was released.


Well, yeah, since its negative news for the expected future value of USD balances currently held on Mt.Gox, the natural result is, at least in the short-term, a drop in the value of USD on the Mt.Gox exchange, which, ceteris paribus, implies a rise in the BTC:USD exchange rate on that exchange.


Is this possibly a canary?


I was actually wondering the same.

For those curious: https://github.com/therealplato/dhs-mtgox-warrant/blob/maste...


For what?


I believe he may have been implying that the cause is somehow linked to an outside agency, which in the case of Bitcoin discussions usually implies a government body somewhere.


No, it's a press release.

(sorry, I can't help my Airplane style of humor)


As many mentioned, you can easily move your Bitcoins out. However, I'd posit that 75% or more of accounts on Mt. Gox do not have a verified account elsewhere. Are the other exchanges prepared for the increased load if it comes? If one or two have downtime, what will that do to the price?


> you can easily move your Bitcoins out

As long as they don't run out of bitcoins (I'm not claiming they've been spending their depositors' bitcoins, just pointing out that it's a theoretical risk.)


It's only a matter of time until there will be enough exchanges to satisfy the demand, the problem here and the potential price drop is only temporary. Bitcoin market has yet to adapt to all this.




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