[ExI] Bitcoin - Mt.Gox

Gordon gts_2000 at yahoo.com
Sat Sep 7 15:58:16 UTC 2013

Concerned about the financial health of Mt. Gox, (the largest Bitcoin exchange), I transferred out what coins I had there. News surfaced in recent weeks that the US seizure of Mt. Gox funds was no small affair. Not only was its Dwolla account seized, but so too was its US Wells Fargo bank account. The total funds seized amounted to about $5 million, including $50,000 of the CEO's personal funds.

While all this was happening, Mt. Gox was telling customers about the Dwolla seizure, but not about the Wells Fargo seizure, and it was not divulging the dollar amounts. They put a hold on withdrawals of USD which they attributed to supposed technical difficulties as they established new financial relationships. The hold was later lifted, but I've seen numerous reports that USD withdrawals are still delayed as much as four weeks or more. I appears to me that Mt. Gox is experiencing undisclosed financial problems, and that they have been less than honest about it with their customers. 

The liquidity issues at Mt. Gox would also explain the wide spread between the market price there and other exchanges like Coinbase. The Mt. Gox BTC price is about 10% higher. It looks like an arbitrage opportunity, but the discrepancy is probably explained by the fact that US sellers at Gox cannot get ready access to their USD. 

What do you think, Mirco? (or anyone)

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