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Comment by panarky | Hacker News Reader

  ... engaging in an arbitrage scheme that leveraged the depressed
  Mt. Gox price to reap gains on other exchanges. This was allegedly
  happening well before the exchange’s breaking point ...

Step 1: Drive the Gox price into the basement

Step 2: Buy devalued Gox-BTC using the fiat you have left

Step 3: Sell those coins on other exchanges at full price

Step 4: Rinse and repeat until solvent

What could possibly go wrong?

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This would only work if the coins were still there. If the Gox coins are stolen/lost, then what are you buying? A worhtless claim to coins that don't actually exist, and that you can't sell.

The assumption is that there are still some coins left to bootstrap the scheme.

Even if there are some coins left, there is nothing to repeat. You sell them, and the plan is over... it doesn't bootstrap anything.

IIRC, Gox was accepting deposits (both bitcoins and fiat) until very recently.

Who would deposit bitcoin in an exchange where the average price is a fifth of what is was in other exchanges? Fiat deposits wouldn't matter for this plan.

I don't know. Who would leave their bitcoins in an exchange that had been demonstrating withdrawal problems for 6 months?

There's some evidence that Gox still has some BTC. For example, this address was controlled by Gox in 2011, and it still has 50,000 BTC.

https://blockchain.info/zh-cn/address/1P3S1grZYmcqYDuaEDVDYo...

Whether they still control the private keys is different question.

More discussion and evidence here:

http://www.reddit.com/r/Bitcoin/comments/1z30q9/gox_has_at_l...

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