This page has been archived and commenting is disabled.

FBI Launches Probe Into "Criminal Violations" By Mt.Gox

Tyler Durden's picture




 

It does not appear that things are getting any better for the virtual currency exchange named after "Magic: The Gathering."

  • *FBI SAID TO BE PROBING POSSIBLE CRIMINAL VIOLATIONS BY MT. GOX
  • *U.S. SAID TO REQUEST DOCUMENTS FROM BITCOIN SERVICE PROVIDERS
  • *MANHATTAN U.S. ATTORNEY SAID TO BE REVIEWING MT. GOX SHUTDOWN

No real reaction yet in price across Bitcoin exchanges.

 

As Bloomberg reports,

The office of Manhattan U.S. Attorney Preet Bharara and the Federal Bureau of Investigation are probing possible criminal violations tied to the shutdown of Tokyo-based Mt. Gox, once the world’s largest exchange for digital currency transactions, two people familiar with the matter said.

 

...

 

Bharara’s office has requested documents from businesses that provide Bitcoin services and the FBI is reviewing the matter, said the people, who requested anonymity because the matter isn’t public. One of the people said that the matter is in its preliminary stages and isn’t yet a formal investigation.

Bloomberg BusinessWeek summarizes "where did the bitcoins go?"

How did the once-largest Bitcoin exchange lose hundreds of millions of dollars’ worth of the digital currency?

Two words: transaction malleability. A hacker can tinker with the code that makes a Bitcoin transaction happen, so that it looks like it didn’t go through. The person who was supposed to receive a payment then asks again and, in Mt. Gox’s case, is paid again automatically. Mt. Gox has acknowledged this was happening. It seems that someone has been slowly bleeding it for months, leaving it without the funds to pay out legitimate withdrawals. But with the company being pretty tight-lipped about it for now, that’s only the best theory.

Was this a shot from the blue?
Not quite. Mt. Gox has been having problems for months, and people have been complaining about not being able to get their money out of the system since late last year. The company halted withdrawals altogether in early February. So while the number of lost Bitcoins is striking, many people have seen the failure of Mt. Gox as imminent for a while.

...

Where did the lost Bitcoins go?
In theory, Mt. Gox could begin to track their path by identifying the fraudulent transactions and searching for the wallets the coins ended up in. But no one is putting much faith in the accounting expertise over there at the moment. In any case, many of the tainted coins have likely moved beyond their initial destinations. If there really has been a slow leak from Mt. Gox for a long time, then the coins could have spread to the ends of the earth by now. One thing is certain: They are probably all over the place, just based on the sheer number of coins alleged to have been stolen. They’d amount to about 6 percent of the Bitcoins in existence.

Is this a security problem with Bitcoin itself?
When Mt. Gox described the issue as a bug in the Bitcoin protocol, people didn’t appreciate it. The technical issue at the root of Mt. Gox’s problem didn’t just crop up recently; it seems that Mt. Gox was left vulnerable because it didn’t protect itself against the issue.

Read more here...

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Wed, 02/26/2014 - 13:18 | 4480599 Tinky
Tinky's picture

fonestar says: "Bullish for Bitcoin!"

Wed, 02/26/2014 - 13:20 | 4480616 Bay of Pigs
Bay of Pigs's picture

Nothing can stop the Fonestar Brigade.

Wed, 02/26/2014 - 13:28 | 4480653 pods
pods's picture

The FBI is taking the speck out of our one eye while looking over the plank with JPM/GS written on it in our other eye.

pods

Wed, 02/26/2014 - 13:29 | 4480660 zaphod
zaphod's picture

This is bullish for Bitcoin

 

Wed, 02/26/2014 - 13:31 | 4480675 FEDbuster
FEDbuster's picture

"Mt. Gox" rebranded "Mt. Corzine".

Wed, 02/26/2014 - 13:36 | 4480694 TeamDepends
TeamDepends's picture

The Honorable Mount Corzine.

Wed, 02/26/2014 - 13:39 | 4480700 zaphod
zaphod's picture

Why is this bullish for bitcoin?

In today's fiat paper money world, when a bank, exchange or similar entity goes under due to corruption the central bank prints funny money out of thin air to "fix" the problem and make customers whole. However this does two things: 1) it devalues the money of prudent savers by increasing the money supply and 2) it encourages more bankers and the like to be corrupt because customers have no reason to worried about a firm's viability since they know the central bank will bail them out. As a result the cycle continues. 

However in bitcoin the free market works as it should and corrupt entities are weeded out while prudent savers remain untouched. Here Mt. Gox goes under and customers who stupidly trusted them are the ones who lose money. As a result in the future customers demand better accountablilty from their exchanges and only the most honest survive. At the same time me the prudent saver remains whole because there was no bailout entity to devalue my money.

So yes, this is very bullish for bitcoin in the long-term. It is the perfect example of how free markets work, with their ups and downs, which make the entire system stronger and stronger over time. 

When even ZH'ers have lost site of this, it shows how far the US has fallen.

Wed, 02/26/2014 - 13:43 | 4480731 Tinky
Tinky's picture

It would be bullish if – and only if – TPTB were to allow Bitcoin to develop organically and only step in to punish bad actors when necessary.

Good fucking luck with that.

Wed, 02/26/2014 - 13:48 | 4480751 fonestar
fonestar's picture

YES!!  MOAR BITCOIN!!!

Wed, 02/26/2014 - 14:10 | 4480829 fonestar
fonestar's picture

 

 

I was there to trade my bitcoins on a Japanese exchange
Against a hacker, oh, and an IT guy, both with a PhD
I was tense, I was nervous, I guess it just wasn't my night
Satoshi gave the answers
Oh, but I couldn't get the questions right, -ight, -ight

I lost on Gox, baby (oooh)
I lost on Gox, baby (oooh)

Well, I knew I was in trouble now
My hope of winning sank
Oh, 'cause I lost the red candlestick now
And then the site went blank
I took Dogecoin for one hundred
And then my head started to spin
Well, I'm givin' up Don Crypto
Just tell me now what I didn't win, yeah, yeah

I lost on Gox, baby (oooh)
I lost on Gox, baby (oooh)

 

http://www.youtube.com/watch?v=BvUZijEuNDQ

 

 

Wed, 02/26/2014 - 14:18 | 4480883 redpill
redpill's picture

I'm sure the FBI is salivating, this is the perfect opportunity to get every last piece of personal information of every Mt. Gox account holder past and present.

Wed, 02/26/2014 - 14:19 | 4480891 fonestar
fonestar's picture

And do what with it exactly?  Commence arresting people around the globe using the supranational police force on charges of..... um.... ?

Wed, 02/26/2014 - 14:21 | 4480896 johnQpublic
johnQpublic's picture

get the info now and make up a law to be violated later

its the american way

Wed, 02/26/2014 - 14:26 | 4480926 fonestar
fonestar's picture

How do American laws effect Canadian, Australian, UK investors on a Japanese exchange?

Wed, 02/26/2014 - 14:28 | 4480938 johnQpublic
johnQpublic's picture

ask some swiss bankers

for evil and corruption, accept no substitute(for the US.gov and its minions of doom)

Wed, 02/26/2014 - 14:31 | 4480952 fonestar
fonestar's picture

You seem to think these people are smart and/or powerful.  Don't really see what that is based upon?

Wed, 02/26/2014 - 14:41 | 4481021 johnQpublic
johnQpublic's picture

i believe there are very smart and very evil

i think there are no accidents

i believe they do everything for a reason

as for power, fucking aye powerful

like 15,000 horsepower motor on a minibike powerful

out of control rampant crazy powerful

like killng a president, his brother, a civil rights leader, blowing up buildings all with no consequence powerful

Wed, 02/26/2014 - 14:45 | 4481057 fonestar
fonestar's picture

They're not very powerful and not very bright.  Maybe bright enough to fool the Bieber-listening mind control subjects and CNBC crowd but that's about it.  fonestar is not that worried about them shooting or bombing my Bitcoins to bits.

Wed, 02/26/2014 - 14:56 | 4481120 johnQpublic
johnQpublic's picture

rather than bombing, i more picture a facility like the new NSA digs, with a bit farm big enuf to essentially destroy any value it has

they have near infinite tax payer and fresh printed dollars to make a mess of just about anything

sorta like printing benny and the inkjets

 

and since the bieber clones are a fair portion of the populus, not to mention the cnbc style 'intellectuals' are well and good under their thumb, i'm thinking thats alot of power

not to mention the brilliance to create a population that can even tolerate that mind numbing crap

Wed, 02/26/2014 - 15:00 | 4481139 fonestar
fonestar's picture

Their scams are looking very 1914-ish to me.  Last time fonestar checked, the year was 2014.

Wed, 02/26/2014 - 18:06 | 4482184 jcaz
jcaz's picture

LOL- Foney, the longer your rants become, the more you expose yourself as a clueless fuck-

And you wonder how Cisco fired you from their janitorial services?

Good luck in Mom's basement......

Wed, 02/26/2014 - 18:13 | 4482216 fonestar
fonestar's picture

fonestar does not need luck.  He started off with some basic assertions that have proven correct and will continue to be proven correct.

Wed, 02/26/2014 - 14:56 | 4481117 bobola
bobola's picture

I bought all my bitcoin for a song

All in, i said, going long

Safer than gold

That's what I've been told

hard drive stored, what could possibly go wrong?

Wed, 02/26/2014 - 15:15 | 4481231 fonestar
fonestar's picture

Drug laws will ban all drugs.  Gun laws will ban all guns.  Bitcoin laws will ban all Bitcoins.

The hits just keep coming! 

Wed, 02/26/2014 - 15:41 | 4481356 Gazooks
Gazooks's picture

my thumb drive just exploded

Wed, 02/26/2014 - 15:44 | 4481376 fonestar
fonestar's picture

That happens to fonestar whenever he hears "Bitcoin" mentioned.

Wed, 02/26/2014 - 15:42 | 4481318 Dr. Destructo
Dr. Destructo's picture

Their power lies within their own game, but step outside that game and you'll see the limits of their power. They have the power of illusion and the force to back it up -they can feed us lies and break down our doors. We, however, have a more potent force on our side called 'inevitability'. Despite how well TPTB contructed their empire of lies it will come crashing down. Shitty fiscal and socioeconomic policies that the oppression machine runs on will cause it to sputter and stop, the dictators we installed to secure our hegemony will be overthrown, and our so-called 'empire' will implode. Picture a wounded bully at the mercy of his many victims that is about to get the curb-stomping of the century; such is the future of the United States where this empire of lies will eventually be destroyed by the international community. It took over a century to build what we have today, but it will take just one hour to destroy.

The U.S. sees this, and it will carry on the illusion for as long as possible.

Presidents aren't where the true power lies, and TPTB can dispose of them very easily. The presidency is just a job to put on your resume for a much higher position that the puppet masters have in store, but even the most powerful fear the people, and it shows.

Wed, 02/26/2014 - 14:31 | 4480950 redpill
redpill's picture

The same way American officials can get the Swedish and UK governments to demand extradition of Julian Assange for "questioning."

 

Wed, 02/26/2014 - 14:34 | 4480961 fonestar
fonestar's picture

If you bothered to research Bitcoin you would immediately see why this is a non-issue.

Wed, 02/26/2014 - 15:03 | 4481161 Flagit
Flagit's picture

remind me again, where exactly IS the FBI Toyoko office?

 

http://www.fbi.gov/contact-us/legat/asia

 

arg, so much for that theory. why exactly does an agency whose priority is the continental unites states.....have 12 asian offices?

 

Wed, 02/26/2014 - 14:28 | 4480936 frenzic
frenzic's picture

Fuck you are one dumb sumbitch. Those people naturally would be designated terrorists in which case it is not a problem to come get them in the middle of the night and put them away without any acces to lawyers or anything. Yes western governments (and all the other ones that are in their pockets) are on the same team and no they don't give a shit about "human rights".

Wed, 02/26/2014 - 14:30 | 4480942 fonestar
fonestar's picture

fonestar peering through the blinds for CSIS officers on the way.

Wed, 02/26/2014 - 15:44 | 4481384 HyBrasilian
HyBrasilian's picture

Blinds?... In mom's basement?

Thu, 02/27/2014 - 00:23 | 4483457 roninmd
roninmd's picture

No jurisdiction.

Wed, 02/26/2014 - 14:20 | 4480892 verbot
verbot's picture

 kept on looking for a way to get me thru the ni hi ight but i couldnt get it right...no i couldnt get it righ hi ight... lol...seems a meme when making a world changing concept....

Wed, 02/26/2014 - 14:20 | 4480893 johnQpublic
johnQpublic's picture

+1 for having a sense of humor about t

you never did tell me what you use your bitcoins for?

or do you just hoard them?

non-snarky question, just curious

Wed, 02/26/2014 - 14:24 | 4480917 fonestar
fonestar's picture

fonestar has donated some Bitcoins to worthy causes, purchased some silver using Bitcoins, bought a knife and um.... hoarded the rest.  We're investing in the framework of Bitcoin.  Most of the blockchain-based services have not been developed yet and many have not even been thought of.

Wed, 02/26/2014 - 14:35 | 4480964 johnQpublic
johnQpublic's picture

+1 for buying some silver

its my personal fav..old US coins, screw bullion, and i like eagles cause they purty....

i admit i like the idea of it, i really do

but adding complexity to complex systems doesnt seem like a solution to me

and i like the weight of real money in my hand..until you have 70lbs of it, then it gets tough to tote around

i wish i had more faith in .gov, and i wish there were no hackers fucking shit up

but you cant survive on wishes...shit in one hand and wish in the other as pappy used to say

see which gets full faster

Wed, 02/26/2014 - 14:36 | 4480981 DoChenRollingBearing
DoChenRollingBearing's picture

My only transaction was buying a 0.25 oz Gold Eagle.  I just hold the rest of mine as well.  Which is not that much (I am still an old-fashioned gold guy mainly).

I do look forward to the interesting things going on with the blockchain.  BTC promises to be a great ride.  You know, in an intellectual sort of way.

Wed, 02/26/2014 - 14:45 | 4481056 johnQpublic
johnQpublic's picture

I do look forward to the interesting things going on with the blockchain.  BTC promises to be a great ride.  You know, in an intellectual sort of way.

 

i understand what you are saying, but thats just not me

i am more of a technophobe every year

i'd sooner go to 1850 than 2050

Wed, 02/26/2014 - 13:52 | 4480754 Stackers
Stackers's picture

The level of incompetence at MtGox was staggering. They lost over 700,000 BTC to a flaw in how their exchanged worked. The system allowed hacker(s) to bleed BTC out MtGox HotWallets and ColdStorage "secure" wallets for over a year.

 

You should never store coins or fiat in an exchange account. There is no reason to. Any exchange with MtGox's wire transfer policy that was always 1 per month and 1 month to process should never be used.

Wed, 02/26/2014 - 14:06 | 4480826 seek
seek's picture

They claim they lost over 700,000 BTC to the flaw.

They've yet to explain how BTC came out of cold storage via this flaw. Also, every bitcoin's movement is documented in the blockchain, and so far no one has been able to put together the transactions that moved 700K bitcoins from the data.

My bet is when the dust settles, it'll become apparent that the losses due to Gox's implementation error will be a fraction of the claimed amount, and there will be evidence Gox was running an unbacked fractional reserve scam or worse.

Wed, 02/26/2014 - 14:20 | 4480881 BTCTalks
BTCTalks's picture

T

Wed, 02/26/2014 - 14:36 | 4480976 johnQpublic
johnQpublic's picture

i'm still waiting for the fraud from the ACA website to start hitting the news like the mtgox story is

Wed, 02/26/2014 - 14:41 | 4481018 DoChenRollingBearing
DoChenRollingBearing's picture

+ a trillion

Wed, 02/26/2014 - 14:47 | 4481020 DoChenRollingBearing
DoChenRollingBearing's picture

dupe (or would I add another trillion?)

Wed, 02/26/2014 - 14:58 | 4481136 johnQpublic
johnQpublic's picture

i figured you meant a trillion times a trillion and that seemed about right

Wed, 02/26/2014 - 14:19 | 4480888 walküre
walküre's picture

right up there with "the dog ate my homework"

Wed, 02/26/2014 - 15:45 | 4481386 Gazooks
Gazooks's picture

boating accident

Wed, 02/26/2014 - 14:19 | 4480889 BTCTalks
BTCTalks's picture

They should theoretically be able to track all of the coins.  But considering they couldn't track coin within their own system, it might be a stretch to think they could track the coin lost to a sophisticated criminal(s). It would be interesting to see if this turns out to be an Office Space type scenario where they were simply siphoning small fractions of coin continuoulsy via the trans mal exploit over the course of several years. Thereby creating a synthetic fiat which collapsed.

http://glcbitcoin.com/2014/02/25/mtgox-bitcoins-first-fractional-reserve...

Wed, 02/26/2014 - 14:26 | 4480927 Theta_Burn
Theta_Burn's picture

And yet bitcoin was the sophistcation to end all sophistications.

criminality always finds a way.

Wed, 02/26/2014 - 14:47 | 4481015 Georgiabelle
Georgiabelle's picture

At this point, it would not surprise me in the least if it was the .gov folks who were doing the hacking/skimming. They could destroy bitcoin, discourage future alternatives to fiat, and secure untraceable funding for some of their nefarious schemes all in one fell swoop.  

Wed, 02/26/2014 - 15:07 | 4481187 Theta_Burn
Theta_Burn's picture

Don't be surprised...

They are, and they will

Wed, 02/26/2014 - 14:23 | 4480909 Theta_Burn
Theta_Burn's picture

Thats interesting...

With all the failsafes' in place it still happened....

Thu, 02/27/2014 - 01:08 | 4483531 MeelionDollerBogus
Wed, 02/26/2014 - 13:49 | 4480759 zaphod
zaphod's picture

No one is suppose to "step in to punish bad actors" that is the whole point.

The free market is best at punishing bad actors, not regulators or anyone else. By exposing customers to massive loses, customers themselves become the police force and entities end up having to compete for the trust of customers. Customers who make bad choices are the ones who lose, while those to pay attention remain whole.

It is the distributed force of "people voting with their feet" that is best at punishing bad actors. It is also the most democratic and resistant to corruption.

Wed, 02/26/2014 - 13:54 | 4480780 Tinky
Tinky's picture

Your romanticism is touching. But if you believe that BC – or any other digital currency – is likely to develop and thrive without interference from TPTB, then you should contact me about a superb bridge that has just come on the market.

Wed, 02/26/2014 - 13:56 | 4480792 john39
john39's picture

bit coin has been used as a lesson to the masses...   digital currency can be really great... but only if big safe banks handle the details....   because they are trustworthy....  (choked on vomit as i typed that).

Wed, 02/26/2014 - 14:39 | 4480989 zaphod
zaphod's picture

Tinky you should look at this.

http://www.reddit.com/r/Bitcoin/comments/1yzil4/i_implemented_gmaxwells/

In response to Mt. Gox, developers are working on systems to verify the viability of bitcoin exchanges and online banks. 

It's already happening, in the end all of these services are going to have to compete for the trust of their customers or go out of business. That is how the free market works. Stop kidding yourself that it either does not work or is not possible in the real world, it is happening today.

Wed, 02/26/2014 - 15:51 | 4481412 Gazooks
Gazooks's picture

sell'm x-flare insurance

Thu, 02/27/2014 - 01:07 | 4483527 MeelionDollerBogus
MeelionDollerBogus's picture

Except emptying customers and running scot-free is entirely profitable & will lead to no punishment whatsoever because there is no recourse, a major flaw in bitcoin itself.

This means the end truth will be clear: bitcoin is the fastest way to be robbed blind & NO ONE should use it.

Wed, 02/26/2014 - 15:13 | 4481229 zanez
zanez's picture

"The free market is best at punishing bad actors" - Person / people steal a whole mess of Bitcoin, Mt. Gox goes out  of business. How exactly are the bad actors (theives) punished in this scenario? Seems they get off scot free, while Mt Gox and it's customers get punished.

Wed, 02/26/2014 - 14:14 | 4480866 Theta_Burn
Theta_Burn's picture

Two words: transaction malleability. A hacker can tinker with the code that makes a Bitcoin transaction happen, so that it looks like it didn’t go through.

+1 for the passionate post.

The chink in the armour, Transaction code...and storage drives that are here 1 day and gone the next. a hackers paradise....

By the way, who do you call when you get smoked of your coins due to fraud?

The FBI is there for 1 reason, to track what was bought/sold and by who. So much for private and anonymous. (OK just the exchanges deemed "suspicious") a Gmans paradise...

It was a cool fad for a while, but now the big boys are involved, their sights are set...

 

Wed, 02/26/2014 - 14:22 | 4480902 RaceToTheBottom
RaceToTheBottom's picture

The NSA will gladly store and analyse the complete transaction set for them.  They have lots of other data that they can tie to...

Wed, 02/26/2014 - 17:08 | 4481891 verbot
verbot's picture

i want the exploding super novae being caught inside a dyson sphere being used to crack sha256 story again!! i loved that one...  hacking one bit coin with the death throes of a supermassive stellar mass....good times..

Wed, 02/26/2014 - 14:51 | 4481087 fonestar
fonestar's picture

The "big boys" are going to lose.  Bigtime.

Wed, 02/26/2014 - 15:05 | 4481175 Theta_Burn
Theta_Burn's picture

Oh I agree 100%

But it won't be 1 of the 30 different virtually mined, binary code encrusted ideas that will do it...

 

Wed, 02/26/2014 - 15:10 | 4481206 bcking
bcking's picture

"A hacker can tinker with the code that makes a Bitcoin transaction happen, so that it looks like it didn’t go through."

You, my dear lady, are an imbecile. You can't hack bitcoin. Gox was a fucking kiddie site built like shit and worked like shit. This has nothing to do with Bitcoin. Bitcoin has never been hacked. You are a good slave.

Wed, 02/26/2014 - 15:30 | 4481307 Theta_Burn
Theta_Burn's picture

While you copy and past shit, do you bother to read it?

Try again, but slower this time. see where you are a complete fucking idiot?

But I'll give you bitcoin guys an A for blindly following this shit that would make Hitler jealous.

So while your flash drives are safe...for now. slowly the move is made on the transaction and exchange side.

Wed, 02/26/2014 - 14:50 | 4481085 booboo
booboo's picture

"Here Mt. Gox goes under and customers who stupidly trusted them are the ones who lose money."
Stupid is what stupid does, who's in the batters box waiting to get smacked by a curveball? What? All bitcoin exchanges are run men that lust for what they can't have until they discover that they can.

Thu, 02/27/2014 - 00:58 | 4483510 Exponere Mendaces
Exponere Mendaces's picture

@zaphod

Nice try man, really.

But these people wouldn't know the truth even if you pounded it into their hearts with a golden stake.

You see, any business that fails, to them - means Bitcoin is "dead". That's the level of thinking you are going up against.

Hell, I can see why companies who make prepper-friendly supplies love these guys, just mark up your products above cost a good percentage, convince the "independent thinkers" that you have something unique that will help them when the "end of days" comes, and you're golden.

Its like selling an inert hunk of stone to audiophiles claiming it enhances the "soundstage" - the Bitcoin haters swallow the fallacies hook, line and sinker and come back for more.

Wed, 02/26/2014 - 13:46 | 4480742 aVileRat
aVileRat's picture

Tap two dealers, sac. 1 currency token. All house of cards in play gain "distraction" for one cycle.

Do X damage to target players, where X is number of money laundering characters in play.

 

I feel dumber just writing that. Who's got some 'Dew?

 

 

Wed, 02/26/2014 - 14:18 | 4480876 Theta_Burn
Theta_Burn's picture

Sounds about right...

Wed, 02/26/2014 - 13:36 | 4480691 TruthInSunshine
TruthInSunshine's picture

Mt. Gox was the first to be cleaned out.

Wait for the others to inevitably follow.

It's the perfect crime as long as the binary coins can still be traded for anything that's actually tangible & and of actual value (mostly credit card/banking account info lists & narcotics on silk roads).

Wed, 02/26/2014 - 13:39 | 4480705 ebworthen
ebworthen's picture

Does this mean I could buy a dime bag of pot with my Litecoins?

Sure hope so, I need a bong hit or two.

Wed, 02/26/2014 - 14:15 | 4480867 DoChenRollingBearing
DoChenRollingBearing's picture

You probably could find someone in Colorado who would make that trade.  I bought gold with BTC.

Wed, 02/26/2014 - 14:23 | 4480907 verbot
verbot's picture

acupulco gold there do cheen?....lol.. hope you win your bitcoin bet!!

Wed, 02/26/2014 - 14:31 | 4480941 DoChenRollingBearing
DoChenRollingBearing's picture

Me too!  I gave up "substances" (inc. alcohol) so my suggestion to EBW was just humor really.

I am down something like $900 (maybe less today) in my BTC experiment.  I would have to do the arithmetic as I bought BTC about six times.

But, the gold I bought with it was real.

I am as curious as anyone else to see how this works out.  If BTC really is independent of .gov easy control, and if BTC is secure and deflationary (I know, two big "ifs"), then I will be...: #Winning!

Wed, 02/26/2014 - 14:58 | 4481133 verbot
verbot's picture

lol. had to slow down partytimes myself do chen!.. i have followed your journey with bitcoin from the first posting.. not sure how it will end(btc blockchain etc..) but i wish you the best in all things and maybe fonestar should send you some free maxcoins along with some ultra/lite/etc...just as a bonus....imho...

i stack silver but followed btc and almost invested so having your experiance shared with ZH has helped us me a lot and have shown the ownership side of btc beyond the hype..

oh, and what is the best rolling bearing made? 

Wed, 02/26/2014 - 15:10 | 4481211 DoChenRollingBearing
DoChenRollingBearing's picture

"Old rumor has it" that SKF some 20 years ago tested all the major brands of tapered roller bearings ("Timken" type) in one of their labs in Europe.  The winner was:

NSK (of Japan)

I have no way to verify a 20 year-old rumor...

But, KOREA is who we dance with down there in Peru.  And Korean is at least good enough (note great success of Hyundai in recent years).

***

Thanks for your kind words!

Wed, 02/26/2014 - 16:25 | 4481600 verbot
verbot's picture

hmmm. i will have fun running down that information do chen! i enjoy qualified opinions the most!.

which is why i have enjoyed your posts being one of a few folks who can claim to actually own bitcoin.. lots of opinions that dont own bitcoin..(mine as well) and lots of "market makers" who may or may not own bitcoin as they claim..

and frankly without bearings the world wouldnt turn so you are systemically important as well....lol....!!

Wed, 02/26/2014 - 14:26 | 4480928 seek
seek's picture

You could always convert from LTC to BTC, then buy.

Unfortunately, with ample evidence Tor is compromised, and silk road being busted, silk road 2.0 either being a scam or hacked, and yet another exchange taken offline by the police a week after starting (one the reasons it appears Tor is compromised) it's going to be a lot harder to score weed online with cryptocurrencies.

Wed, 02/26/2014 - 13:52 | 4480768 Sonic the porcupine
Sonic the porcupine's picture

Disclaimer: I own some Bitcoin. Even though I think the price is a bubble the technology or some iteration of it, is here to stay. Having said that, the other exchagne aren't vulnerable to the exploit that ostensibly took down Mt. Gox. I don't see it as inevitable that the other exchanges follow the downward spiral of Mt. Gox.

Wed, 02/26/2014 - 14:10 | 4480845 seek
seek's picture

It's doubtful any of the large and currently established exchanges will be "cleaned out."

This happened all the freaking time with the early exchanges due to poor security, lack of cold storage, etc. The current exchanges have had security events happen, but the losses have been comparatively minor due to learning from the past.

What's going to happen now is that exchanges are being forced by the market to actually document their reserves (which is pretty easy to do), which will go a long way towards eliminating any fractional reserve scams. It'll still be possible for exchanges to abscond with any bitcoin they hold, but most people will be wise enough to not leave BTC with the exchange, and in any case, this type of fraud can occur within any banking entity. Going a little further out, we'll probably see a lot more development of N-of-M key signing (e.g. escrow) for transactions on exchanges, which completely eliminates problems like this altogether.

Wed, 02/26/2014 - 13:58 | 4480800 fonestar
fonestar's picture

This is bullish for Bitcoin

 

Absolutely!  "Goxing" as it has come to be known in Bitcoin parlance is finally over.  This has been the biggest drag on Bitcoin prices and embarassment to Bitcoin for the past year or more and it is now over.

Wed, 02/26/2014 - 14:12 | 4480859 BTCTalks
BTCTalks's picture

Those of us who have experienced this several times previous were never worried.  Only the uninitiated seemed concerned.  #MFGox succumbed to a fractional reserve bank run as they created a synthetic paper vs physical spread due to unforseen transactional malleability issues.  It should be noted that this weakness was found on no other exchanges.  The free market worked and MtGox is done.  No bailouts.  No bail-ins.  And the value of XBT is now 45% above the lows and $30 above where it was before the #MFGox news broke.

 

Don't worry though, I'm sure bitcoin is done this time... Or next time... Or...

Wed, 02/26/2014 - 15:56 | 4481442 Gazooks
Gazooks's picture

we'll at least be spared the tears here after the killshot

Wed, 02/26/2014 - 15:18 | 4481248 zanez
zanez's picture

And the hackers / Mt. Gox people get gigs as advisors / lobbyists in D.C. and don't go to jail. That's how  it works with TBTF banks.

Wed, 02/26/2014 - 22:49 | 4483210 StychoKiller
StychoKiller's picture

Too right!  Didn't the FBI change their mission statement to upholding National Security/Fighting Terrorism, yet here they are investigating a potential financial crime?  I just wish they'd keep their story straight!

Wed, 02/26/2014 - 13:55 | 4480785 fonestar
fonestar's picture

Nothing can stop the Fonestar Brigade.

 

NOBODY BEATS THE FONESTAR!  NOOOOOOOBODY!

Wed, 02/26/2014 - 15:03 | 4481166 verbot
verbot's picture

proton proton chain discrepancy and carrington event aside...lol...

Wed, 02/26/2014 - 13:22 | 4480623 agent default
agent default's picture

Fonestar cannot comment at the moment.  He is busy buying the dip. TROLOLOLOL

Wed, 02/26/2014 - 13:45 | 4480741 gafgroocK
gafgroocK's picture

 

 

I wonder how much of a 'haircut' the WinkleBoy Twins got on this one?

Wed, 02/26/2014 - 15:58 | 4481458 Gazooks
Gazooks's picture

hopefully, total waxjob

Wed, 02/26/2014 - 13:53 | 4480776 fonestar
fonestar's picture

Which dip would that be?  Do you even follow Bitcoin?  Why are you commenting?

Wed, 02/26/2014 - 13:47 | 4480746 MeMongo
MeMongo's picture

Fonestar's broke bitchez!

Wed, 02/26/2014 - 13:56 | 4480788 fonestar
fonestar's picture

How is fonestar broke retardomongo? 

fonestar is always BTFBitD!

Wed, 02/26/2014 - 14:11 | 4480849 agent default
agent default's picture

You just said in your previous response:

"Which dip would that be?  Do you even follow Bitcoin?  Why are you commenting?"

Now: "fonestar is always BTFBitD!"

WTF ???

Wed, 02/26/2014 - 15:54 | 4481428 firstdivision
firstdivision's picture

Hey Fontas, you seem to have endless capital to buy every dip.  You must be like loaded and shit.  I totally believe in everything you have to say.

Wed, 02/26/2014 - 16:23 | 4481593 MeMongo
MeMongo's picture

Mongo like silver!

Wed, 02/26/2014 - 13:53 | 4480773 doctor10
doctor10's picture

Looks like the "Justus Dept" has found some bitcoin bankerz to hang.

If Karpeles winds up in front of a kangeroo court of the US Senate-we'll know fo sho

 

 

Wed, 02/26/2014 - 13:18 | 4480603 Duc888
Duc888's picture

 

 

 

 

Funny,   nuthin' fishy goin' on down on Wall St so ya got to go after your competitors fiat currency.

 

Good lookin' out.

 

Not.

Wed, 02/26/2014 - 13:22 | 4480625 drendebe10
drendebe10's picture

You ain't justa sh*ttin....  you ain't justa sh*ttin.... fukem

Wed, 02/26/2014 - 13:19 | 4480607 walküre
walküre's picture

FBI is perusing this blog.

Wed, 02/26/2014 - 13:25 | 4480641 FuzzyDunlop21
FuzzyDunlop21's picture

Fone sex star is probably some low life CIA agent whose sole job is to post on blogs and make users of bitcoin look retarded. Makes me hate him all the more.

Wed, 02/26/2014 - 14:15 | 4480872 fonestar
fonestar's picture

fonestar is a brilliant investor and philosophator.

Wed, 02/26/2014 - 14:24 | 4480911 Sofa King Confused
Sofa King Confused's picture

I one upped you for philosophator

Wed, 02/26/2014 - 14:24 | 4480914 walküre
walküre's picture

"fonestar" may be up for consideration

if BTC is deemed a scam, the net cast over "accessories" will be wide

Remember, if the Feds get involved and go out of their way to look into this it is because someone, somewhere who is very connected has lost an awful lot of money on Gox or BTC. That is how the Feds (financial crime department) work. They're the hounds working for the big boyz.

Karpeles stole from the wrong guys. He may have pissed off members of the tribe and that will cost him deerly.

Thu, 02/27/2014 - 00:59 | 4483514 MeelionDollerBogus
MeelionDollerBogus's picture

Oh, it's so much worse than that.

History will not look back on bitcoin and say

SCAM. FUCK.

They will write

/SARC : LULZ

as if people fell for it. Buying bitcoin is like taking MillionDollarBonus_ posts as literal truth.

Wed, 02/26/2014 - 15:08 | 4481194 verbot
verbot's picture

helpful hint....avoid the ending "tor" ...lol.....

Wed, 02/26/2014 - 15:20 | 4481267 Flagit
Flagit's picture

william bonsi productions: WB-P, hello.

chubbs: i need a bitcoin that looks like it suffers from mental retardation.

WB-P: no prob. i got this.

Wed, 02/26/2014 - 13:19 | 4480608 vincent
vincent's picture

Nothing like killing a flock of birds with one stone.

Wed, 02/26/2014 - 13:25 | 4480632 One And Only
One And Only's picture

Bitcoin went from $400 to $600 in a matter of hours after the Gox announcement. A year ago bitcoin was below $100.

Don't kill me bro.

Wed, 02/26/2014 - 13:31 | 4480669 Herd Redirectio...
Herd Redirection Committee's picture

But most of the trusting public bought between $800 and $1000... So...

Wed, 02/26/2014 - 13:43 | 4480725 One And Only
One And Only's picture

The stock market crashed in 1987. If you bought at the peak and held to today what % would you be up by?

Thu, 02/27/2014 - 00:53 | 4483503 MeelionDollerBogus
MeelionDollerBogus's picture

depends which stock - you couldn't have bought "the" dow because it's a composite index so you'd have to buy the SHARES of the Dow, so you'd get all the fees for pushing out every loser on time & getting what was indexed in its place, so you'd never get the actual returns. If you slipped even once you could be holding a bag of dog shit or worse, something de-listed, which has the odour of dog shit but not even substance to work with.

Wed, 02/26/2014 - 15:22 | 4481271 zanez
zanez's picture

From that weak ass 'announcement' ?   There's a sucker born every minute.

Wed, 02/26/2014 - 13:19 | 4480611 buzzsaw99
buzzsaw99's picture

FREE CORZINE!

Wed, 02/26/2014 - 14:19 | 4480890 DoChenRollingBearing
DoChenRollingBearing's picture

The US Justus Dept. already has.

Wed, 02/26/2014 - 13:21 | 4480622 Duc888
Duc888's picture

 

 

"FBI is perusing this blog."

 

No doubt!  :)  Hi there MR FBI guys.....  :)

 

Seen anything fishy goin' on over there in NY?

 

....just curious...

Wed, 02/26/2014 - 14:16 | 4480874 fonestar
fonestar's picture

It will be okay.  You need a Bitlicense now to use Bitcoin in New York.  That means everyone will get a Bitlicense now.

Wed, 02/26/2014 - 13:23 | 4480629 SmittyinLA
SmittyinLA's picture

bitcoin is the worlds biggest pyramid scheme (sans SS & Medicare) 

Remember the pyramid schemes of the 80s? 

Bitcoin is the exact same thing with a math/internet computer distraction attached to your position in the pyramid. 

 

 

Wed, 02/26/2014 - 13:24 | 4480639 I_KNOCKOUT_U
I_KNOCKOUT_U's picture

^^^^Boatmisser

Wed, 02/26/2014 - 13:25 | 4480644 Professorlocknload
Professorlocknload's picture

Early players are long gone.

Wed, 02/26/2014 - 13:27 | 4480651 One And Only
One And Only's picture

Oh really? Tell me more about that.

Wed, 02/26/2014 - 13:29 | 4480663 agent default
agent default's picture

SS and Medicare are much worse than pyramid schemes.  Nobody is forcing you to buy Bitcoin.

Wed, 02/26/2014 - 14:03 | 4480816 Sonic the porcupine
Sonic the porcupine's picture

I own bitcoin, but I don't consider myself a fanboy. I mainly buy and trade it as an experiment/hobby.  I wouldn't rely on it for retirement.

I'm a big fan of gold and silver.

But I will say that there is a difference between a bubble and a pyramid scheme. Bitcoin has value (as a technology) even if the price collapses.

I don't think gold or bitcoin have intrinsic value. I don't believe anything has intrinsic value because I subscribe to the subjective theory of value. BUT gold has uses apart from it's use as a currency (which is what I think a lot of people mean when they say gold has intrinsic value but bitcoin doesn't). People desire it apart from it's use as money (even though most people don't exchange gold coins anymore for transactions, peopel still value gold in rings, jewerly, electronics (if it weren't so expensive). With Bitcoin/Dollars/Fiat, people don't value those things apart from their use as money. If no store acceptd dollars for goods and services, would you still value the dollar? No. If a store didn't accept gold bullion for payment (most probably dont'), would you still value the gold? 99.9% of people would.

 
Another problem with bitcoin/fiat is that if it weren't used for money a 20 dollar bill doesn't have any use a 10 bill doesn't have, the only difference is it has a larger number printed on it, and people subjectivly value the larger number more. One bitcoin (if it weren't used as a currency) does not have more use than .5 bitcoin (other than 1 BTC being more highly divisible before getting to the Satoshi limit). One ounce of gold CAN make twice as many rings as .5 ounces of gold, can be used to make more wire, etc etc.

Wed, 02/26/2014 - 14:23 | 4480908 DoChenRollingBearing
DoChenRollingBearing's picture

Nicely put, Sonic.  I own BTC for the learning and experiment.  I would just add that BTC could also be very useful soon for international travelers...

Wed, 02/26/2014 - 14:30 | 4480946 williambanzai7
williambanzai7's picture

Whatever happened to travelers checks?

Wed, 02/26/2014 - 14:33 | 4480960 DoChenRollingBearing
DoChenRollingBearing's picture

Touché!  

Wed, 02/26/2014 - 14:38 | 4480993 PTR
PTR's picture

Without Karl Malden, they just fade away...

Wed, 02/26/2014 - 14:54 | 4481065 JPMorgan
JPMorgan's picture

I agree that intrinsic value is subjective and open to interpretation. But I argue gold being physically tangle-able, scarce and a naturally occurring element in the earth's crust gives it a far higher scale of value over something artificially created by man that has no physical presence. I would also consider the historical record as what has stood the test of time in my reasoning. With that said a item is only worth what someone else is willing to pay or trade for it, I guess that was what you were ultimately alluding to.

Wed, 02/26/2014 - 13:24 | 4480637 Professorlocknload
Professorlocknload's picture

Not to worry, foneman, If you want to keep your bitcoins the FBI will let you. Provided you declare them.

Wed, 02/26/2014 - 13:27 | 4480649 Mad Mohel
Mad Mohel's picture

Wonder if that fat kid over there running Gox knows that his Black Lotus cards won't work on the Feds.

Wed, 02/26/2014 - 13:28 | 4480652 Stoploss
Stoploss's picture

Yes, but what about the real estate purchased with bitcoin???

 

Wed, 02/26/2014 - 13:28 | 4480655 verbot
verbot's picture

one cant not make this stuff up as it would be dismissed as preposterous and impossible yet here we are....i love this stuff!.

it like watching kids build things with lincoln logs and sand buckets..so earnest and serious yet the product reflects it's origins and follows it's attributes as all objects must due to definition of characteristics. 

did you find and spend your verbuck today? remember each morning a verbuck is issued to you, each verbuck is close nearby so look carefully. so of our agaent fairies like to make you search a bit for fun. remember verbucks are accepted globally and may never be stolen lost or misused....

Verbucks, it's whats for money...

Wed, 02/26/2014 - 13:36 | 4480689 ebworthen
ebworthen's picture

Wow, I feel so safe now.

FBI is on Mt. Gox like a crow on corn but can't seem to see the Corzine Scarecrow.

Wed, 02/26/2014 - 13:39 | 4480701 gafgroocK
gafgroocK's picture

After the FBI tracks this down, its back to surfing for Porn Deviants for the crew..

Wed, 02/26/2014 - 13:35 | 4480690 gafgroocK
gafgroocK's picture

 

 

Officer...he did it...it was him..(pointing to a cowering, sobbing little man in the back of the squad car) his name is spelled F-U-C-K-E-D-S-T-A-R..his street name is Fonestar or something like that...looks like Paul Krugman but without the Cat

Wed, 02/26/2014 - 13:37 | 4480696 Kirk2NCC1701
Kirk2NCC1701's picture

Doesn't the "Eff Bee Eye" have anything better to do, but to go after a tiny market segment of Speculative Virtual Assets?

E.g. the treasonous MFers on Wall St?  Anybody, anybody?  Chilton, Corzine?  Anybody?

Wed, 02/26/2014 - 13:42 | 4480724 gafgroocK
gafgroocK's picture

 

 

Nope, its a job that just consists of lookin' for cyber shit like Bitcoins and sick Porn. Pays well they say...

Wed, 02/26/2014 - 13:44 | 4480736 ebworthen
ebworthen's picture

Those FBI agents have GPS detectors in their shoes that put them on administrative leave if they enter Wall Street or Washington D.C. with the intent to investigate - special issue Keystone Wingtips.

Pretty sure the military has the same thing in their boots.

Wed, 02/26/2014 - 14:30 | 4480947 verbot
verbot's picture

i am detecting no intelligent replies Captain...phrases set to stun!....(phrases instead of phasers? ehh?...lol)

Wed, 02/26/2014 - 13:41 | 4480715 q99x2
q99x2's picture

I want my Bitcoin and the Government of banksters is going to get it back for me.

YeeeeeeeeeeeeHaaaaaaaaaaa.

Movin movin movin .

Keeep dem doggies rollin.

Wed, 02/26/2014 - 13:41 | 4480716 thorgodofthunder
thorgodofthunder's picture

First:

LMFAO

Second:

I wish I was smart 'nuf to have found a shorting strategy at
$1300 like I publicly mentioned I was trying to do.

Third:

Why is Bitcoin/Bitcon/Shitcoin/TwoBitCon STILL trading at $600 and not $0.60?

Wed, 02/26/2014 - 13:51 | 4480764 Winston Churchill
Winston Churchill's picture

If you bought at $0.02 would you sell ?

Wed, 02/26/2014 - 16:07 | 4481508 walküre
walküre's picture

The early guys are out. The bag holders bought at higher valuations and hoping for the next moon shoot. Eventually this thing is going down, down, down. Same pattern as any pump and dump which may just be the nature of how humans are trading worthless shit back and forth to each other. Good stores of value like gold, silver, antiques, art, oldtimers etc will always have a price and a market. Worthless shit is just that to each and everyone, worthless.

Wait for the siren calls on BTC when the next exchange fails with some stupid excuse.

Wed, 02/26/2014 - 20:22 | 4482677 TheHound73
TheHound73's picture

But, but I thought the early adopters are holding too much of the currency to be "fair" or some crap like that. Confused.

Wed, 02/26/2014 - 13:42 | 4480721 kchrisc
kchrisc's picture

Hey, the DC US' Gestapo is on the case. I feel better already. LOL

 

"Guillotines put a new spin to "let's roll."

Wed, 02/26/2014 - 13:43 | 4480732 flysofree
flysofree's picture

Max Keiser said yesterday that bitcoin is going to $10,000 in two years time. Although I enjoy his insightful  financial commentary, I think he is turning out to be just a gold and crypocurrency pumper and conman.

Why does Stacy Herbert wear the same slim fit cream colored pants?

Do NOT follow this link or you will be banned from the site!