Folks, again, the clients of an exchange are its main liabilities, not its assets.  If a client has a balance of 1000 USD or 100 BTC in his account, it means that MtGOX owes those amounts to that client; and anyone who buys MtGOX will be buying those debts.

The sum of those debts for MtGOX, in BTC and national currencies, has been estimated as a billion dollars or more.  No one knows for sure, since MtGOX has never released those numbers.

In fact no one knows how many active clients (who, say, trade at least once a month) MtGOX had two months ago.  My guess (with no factual basis, just a feeling) is less than 10,000.

PS note that MtGOX said many times "our client's coins are safe" but never "our clients will eventually get all their coins out".   

Three ways MtGOX could have lost most of their clients' coins:

1. MtGOX's CEO thought that it was stupid to keep 500 kBTC locked in cold wallets without generating any revenue.  So he sold most of those coins off-market and invested the money into stocks or whatever, minus a small reserve to honor BTC withdrawals; confident that if he needed more, he could just sell the stock and buy back the coins.  But that was when 1 BTC was 100 USD.  After the price exploded and finally settled at 800 USD, even selling all the stock he could buy back only 1/8 of his clients' coins.

2. MtGOX was actually a bitcoin ponzi.  They kept the price 10% above market so new investors would bring in mostly BTC in (rather than USD).  A MtGOX agent would buy those real BTCs for (say) 110 virtual goxUSD, then sell the BTCs at other exchanges for 100 real USD.  MtGOX used some of that money to execute USD withdrawals, and pocketed the rest.  Like any ponzi, the method worked as long as they had lots of investors coming in and few USD withdrawals.  The ponzi unraveled when that situation got reversed, and/or when MtGOX bought thousands of BTC from new investors at over 1000 USD and the price crashed before they could sell them.

3. MtGOX accidentally deleted the private keys to some or all of their cold wallets.

I find it hard to believe that a significant number of coins could have been stolen by hacker exploiting the malleability bug, oer six months, with clients complaining loudly all the time, without MtGOX realizing it. I find it easier to believe that MtGOX put or failed to fix that bug on purpose, because it gave them an excuse to stall BTC withdrawals. (The image of Jerry Lundegaard in /Fargo/, trying to fool the bank auditor with illegible faxes, keeps coming to my mind.) I find it also easy to believe that MtGOX and acomplices friends are now trying to spread that "hacker stole it all" story in order to avoid an investigation of MtGOX that could result in criminal charges.

I have seen reasoned estimates that put MtGOX's debt to their clients (the sum of the balances in all their accounts) at 1 billion dollars or more.  Even if they lost only a fraction of that...

That is one of the two disasters that befell the bitcoin project, and will kill it.

My understanding:

Arbitrage trade appears to have been disconnected or weakened since the big 10 kBTC sell-off at Bitstamp.

Also Huobi and OKCoin together are much bigger than Bitstamp, BTC-e and Bitfinex together (sometimes 5x as big). Normally it is Huobi and OKCoin who define and stabilize the price on these three.  With reduced arbitrage, these three become much more "fragile" and therefore volative, while the Chinese barely notice.

Finally, apart from arbitrage, Huobi and OKCoin are isolated from the other markets, since they trade only in CNY, and the others cannot trade in CNY.  Their clientele must not even know what MtGOX is.

Whether he gets convicted or not, and whether bitcoiners think that the law is immoral or not, it not relevant.

For most people in the world, money laundering for the drug traffic is not legit.

If those people are told that  "most bitcoin supporters consider money laundering and drug trafficking legit", they will conclude that bitcoin is not legit.

Any institution that wants to be the voice of the bitcoin community to the world must be respectable in the eyes of the world.

The daily trade volume outside China and MtGOX nearly doubled from yesterday to today (Mon Feb/24 UTC), from ~53 kBTC to ~102 kBTC.

Bitstamp increased the most, from ~21 kBTC to ~52 kBTC (about 150%).

On the other hand, trade volume in China decreased from ~338 kBTC to ~261 kBTC.

As a result, the share of China in the total daily volume (excluding MtGOX) fell from ~86% yesterday to ~72% today.

Daily volumes of BTC trade to/from USD and other national currencies (in kBTC):


             !    Sun !    Mon !    Tue !   Wed !    Thu !    Fri !    Sat !    Sun !    Mon !
  EXCHANGE   !  02/16 !  02/17 !  02/18 ! 02/19 !  02/20 !  02/21 !  02/22 !  02/23 !  02/24 ! Currencies considered

  Bitstamp   |  26.40 |  19.90 |  14.83 | 20.76 |  34.97 |  29.61 |  18.08 |  20.87 |  51.84 | USD
  BTC-e      |  21.75 |  15.07 |   8.08 |  5.84 |  23.37 |  23.64 |  18.68 |  14.24 |  20.78 | USD,EUR,RUR
  BitFinEx   |  16.75 |  15.69 |   8.47 |  4.71 |  25.27 |  28.46 |  14.73 |  15.80 |  27.16 | USD
  Kraken     |   0.91 |   0.89 |   0.51 |  0.38 |   1.60 |   1.15 |   1.08 |   1.06 |   1.06 | EUR
  Bitcoin.DE |   0.57 |   0.57 |   0.38 |  0.54 |   0.70 |   0.76 |   0.61 |   0.50 |   0.73 | EUR
  CaVirtEx   |   0.15 |   0.15 |   0.21 |  0.11 |   0.75 |   0.60 |   0.20 |   0.23 |   0.30 | CAD
  CampBX     |   0.07 |   0.28 |   0.10 |  0.14 |   0.73 |   0.24 |   0.26 |   0.22 |   0.37 | USD

  SUBTOTAL   |  66.60 |  52.55 |  32.58 | 32.48 |  87.39 |  84.46 |  53.64 |  52.92 | 102.24 |

  Huobi      | 110.57 | 130.41 |  74.04 | 34.12 | 131.14 | 187.12 | 154.12 | 185.15 | 163.47 | CNY
  OKCoin     |  63.63 |  63.05 |  51.46 | 26.29 |  53.49 | 140.75 |  87.71 | 141.90 |  84.03 | CNY
  BTC-China  |   9.08 |   7.86 |   3.86 |  2.04 |  10.97 |  15.23 |   9.29 |  10.42 |  13.12 | CNY
  Bter       |   0.56 |   0.48 |   0.35 |  0.37 |   0.77 |   0.63 |   0.48 |   0.62 |   0.53 | CNY

  SUBTOTAL   | 183.84 | 201.80 | 129.71 | 62.82 | 196.37 | 343.73 | 251.60 | 338.09 | 261.15 |

  TOTAL      | 250.44 | 254.35 | 162.29 | 95.30 | 283.76 | 428.19 | 305.24 | 391.01 | 363.39 |

  MtGOX      | 104.46 |  65.69 |  63.50 | 40.75 | 127.48 | 103.06 |  89.24 |  46.66 | 121.29 | USD,EUR,GBP,AUD,JPY



All numbers were collected by hand from the site http://bitcoinwisdom.com. Beware of possible errors.

For each exchange, the numbers include only the trade volume to/from the currencies listed in the rightmost column. Trade between BTC and other cryptocoins, such as LiteCoin, is NOT included.

Dates on the header line are UTC. Specifically, "01/15" means "from 01/15 00:00:00 UTC to 01/15 23:59:59 UTC". (Beware that Bitcoinwisdom uses your local time, so the date may appear to be off by 1 day.  For example, if you are 2 hours west of Greenwich, it may show "01/14 22:00" when the UTC time is "01/15 00:00".)

NOTE: MtGOX has suspended withdrawals of Bitcoins and national currencies.  Therefore it is essentially isolated from other markets, and its price is completely out of the norm.  The trade volumes above may be meaningless.

From the little I have read, I believe that Shrem and Karpeles were not just two members of the board among many, but were two of the founding members --- which may have been as few as two or three. 

How could people trust the remaining members, who may have been selected and brought in by those two? 

If the honest members of the board could not get the Foundation to expel Shrem and Mark right away, they should have left it themselves.   The current members of the board did not do either, so ...

If the community wants to clean up bitcoin's image, it should dis-authorize the Bitcoin Foundation and start another one, with a different name and with people who were not associated to the BF.

Random bit: today (Monday Feb/24 UTC) there was unusually large trade volume at MtGOX in JPY: ~14 kBTC worth of. It was ~1.7 yesterday, ~3.6 the day before.

You mean the Shrem Karpeles & Friends Foundation?

Depends on the field... I used to be sort of an "insider" in one or two, outsider in all the others...  Now I have lost my foot even in those.  I guess that being "outsider" in all fields makes me a "hermit". 


I had and have several research grants (in academia you are dead if you don't have one).  But not on cryptography.  I do not find the subject very exciting.  Partly because I am a "visual" kind of person and cannot "see" things there.  (I went into the Voynich Manuscript because I was convinced that it was not a  crypto problem, more likely a linguistic one.)

How true that is!

Thanks!... But if you really must, I will be happier if you just pay me a coffee or a beer, if and when we met, someday. 

So is that why "the community" likes to pretend that Huobi and OKCoin do not exist, while BTC-China does?  Because there is some sort of "club" of bitcoin exchanges, and they are not members of it?

confirmed

Fixed That For Them.

Is that blue thing above the name a stylized price chart?

Some observations about Huobi and Bitstamp prices
(Many readers may have observed them already, or may not care. Sorry if that is the case.)

Usually Huobi and Bitstamp are fairly in sync, with a fixed currency conversion factor R = ~6.12. 

In the following plot, each dot is the ratio of hourly mean prices (L+H)/2 at Huobi and Bitstamp, every day at  ~19:30 UTC



On Feb/08 there was  sharp and lasting drop at Bitstamp, that had no lating effect on Huobi.  The ratio R then jumped to ~6.40.

But then on Feb/10, apparently in the wake of MtGOX's press release, the opposite occurred: Huobi had a sharp persistent drop which had no persistent effect at  Bitstamp   The ratio R bounced around 6.12 until Feb/15 but then stabilized again at that value, until Feb/23.

On Monday Feb/24, the 10 kBTC dump caused a major drop at Bitstamp, that Huobi did not follow completely.  At 19:30 UTC the ratio R was ~6.63.  Right now, R is ~6.9.

It appears that, right now, arbitrage trading between Bitstamp and Huobi is not as effective as it used to be.  On the other hand, the drop at Bitstamp was clearly generated there, so the partial drop at Huobi was clearly "imported" from Bitstamp.

Is this significant?