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Mark Karpeles: First, you need to understand that the Bitcoin implementation we use in MtGox was created back in 2011. The bitcoin client is not meant to handle the kind of load MtGox has and was having more and more troubles, lagging and crashing. We created our own implementation to solve those issues and to offer a better flexibility to our customers.

Over time Bitcoin changed and started implementing changes that would require people using previous versions of the software to upgrade. While we followed most of those update(s) we were more and more busy and couldnt keep up with all the changes.

With bitcoin 0.8.0 (released 19 feb 2013) a breaking change has been included that would prevent transactions to be accepted if their signature did not include the right number of zeroes in front of the signature values (in an effort to reduce risks of transaction malleability). We did not notice this change but a few of the transactions we were sending would become invalid because of this.

So let me get this straight: you wrote your own software, were well aware that Bitcoin is regularly updated, and even though it is the CORE of your business you didn't bother to keep up with the software? Oh it's because you were "too busy"? I'm sorry, is this a multi-million dollar company or one guy working out of his mother's garage? As your business grows you need to hire more employees to keep up with the workload - it's not like you couldn't afford it.

"We did not notice this change" is a ridiculous thing to come from one of the largest Bitcoin exchanges. You should have someone CONSTANTLY monitoring the community to keep abreast of all changes that could affect your business. You have a fiduciary duty to your clients to properly handle their money and at this Mt. Gox has clearly failed.

Well what are a few more lawsuits thrown on the pile, right?

Chuck Finley

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