Quote from: thelema93 on February 25, 2014, 12:49:33 AM

Quote from: Money Raccoon on February 24, 2014, 10:35:30 AM

Now I'm not talking about peoples money, I mean profit. Money that Mark can reinvest into the company to buy coins and become solvent.

I believe the bug is long fixed but extra work is being done to improve standards. I also believe that Gox lost a lot of coins that need to be replaced in order to survive, a challenge that Gox is/should be working on. I also think this so called lawsuit will be dropped once withdraws are opened and I don't believe that Mark will disappear as that would pi$$ off a lot of ruthless individuals. So my only concern is that Gox has enough funds to buy their way out of this mess but how much funds are needed? At what price? does Gox have enough? Essentially, can they buy their way out of this?

Your thoughts.

Please no fud or trolling and no trolling or fud please.

So far I have seen no evidence that Mt.Gox is in a 'Mess' and needs extra money to 'buy their way out'.
Can somebody actually provide some kind of reference for this allegation? It seems that many people on this forum believe in the hype that everything that's happened at Gox is because they have no money - that has no basis in fact that I can see.
If anyone can prove me wrong, please be my guest.

- http://www.theverge.com/2013/8/23/4651926/us-government-seized-5-million-from-bitcoin-behemoth-mt-gox

- https://bitcointalk.org/index.php?topic=280365.0

Quote from: pungopete468 on February 24, 2014, 06:48:22 AM

I don't know how profitable you guys think the trading fees are; they can't just simply "cover" $5 million USD seized by the FBI and continue to pay their normal operating expenses...

I don't know their level of actual expenses but I do know that in business your expense is a sliding scale; the more you make, the more it costs to stay in business... Financial exchanges typically operate on less than 1% Net Profit per year after all is said and done...

Let's just run a little financial simulation for speculation purposes. These are the conditions:

- Assume you need to pay off $5 million USD and still have enough for regular operating expenses.
- Assume you can operate at a 90% Gross Profit after operating expenses. (On average, for Every $111 of Gross Income you spend $11 on regular Operating Expenses leaving $100 left over.)
- Trade commission is 1.2% total for each transaction.
- All debts rely on new incoming USD as the older pre-existing accounts were forfeited.

To become solvent:

$5,000,000.00 (Gross Profit) = [$504,583,333.33 (Volume of Trade) * 1.2% (Trade Commission)] - $1,055,000.00 (Normal Operating Expenses @ 90% Gross Profit Ratio)

Net Profit @ 1% of Gross Income (not Gross Profit) = $60,550.00 per year.

It would take 82.5 years to cover the loss at that pace. If the volume of trade would bump up to say, $5 Billion it would be 8 years, and at $50 Billion would take 0.8 years...

Most financial exchanges deal with Hundreds of Billions of Dollars per year in volume... 1% start's to look pretty good there.

On top of all this; enough new USD will need to be transferred in monthly just to cover the expenses in order to stay in operation until they have enough time to recover. Even if old accounts are traded back and forth so rapidly that the volume of trade was a trillion Gox Bux they still wouldn't have any USD to spend unless it's transferred in from outside of the exchange.

Regardless of how they choose to apportion the minimal amount of USD transferred into Gox's account daily they are probably insolvent and operating on borrowed time and money... They wouldn't likely be able to pay their obligations right now anymore than they could squeeze blood from a turnip.

It's not an insurmountable problem given enough time, very careful spending, and solid growth of Bitcoin... Unless the incoming USD deposits slow down...

Basically, they've been skating on very thin ice and when people stopped sending in USD and just sent Bitcoin it put them under tremendous financial pressure. They likely cover expenses by selling coins on other exchanges to compensate for the decrease in USD deposits...

They aren't in a position to make profits right now; they've suffered too many losses and it's eaten away the ability to remain solvent and profitable.

Those bank accounts that were closed contained the entire accumulated USD of MtGox. That wasn't profit; it was the top line of their balance sheet...