Precisely what did Mt. Gox do wrong?

Everyone likes to trash Mt. Gox. There is a ton of hearsay out there. Can someone produce real evidence of their poor business practice? I was hoping to find their old website FAQ for example. What about their management and policies was so different from any of the other exchanges? There are tons of customer complaints out there but do we know the underlying causes of those complaints and is there documentation to back those up?

Nick

Posted 2015-01-26T22:31:59.987

Reputation: 125

Answers

Specifically:

They blamed transaction malleability for a hack, which was clearly a lie - blaming Bitcoin for their own mistakes.
They stopped withdrawals but continued allowing deposits and trading. A leaked strategy document shows that this was an attempt to conceal the size of their losses from the public, ie they didnt' come clean when they should have . http://www.scribd.com/doc/209050732/MtGox-Situation-Crisis-Strategy-Draft#scribd
Their communication with their customers leading up to the hack was generally awful.

Chinthamani

Posted 2015-01-26T22:31:59.987

Reputation: 153

I'm pretty sure that document is fake. 1 2 3

– Nick ODell – 2015-01-27T19:10:06.783

Is there any evidence that the exchange was even hacked? – Zamicol – 2015-01-27T22:59:04.587

Point 1 is not an answer. It only suggests their CEO has poor character. Point 2 is after the fact. Poor customer service is hardly a satisfactory answer either. – Nick – 2015-01-27T23:27:58.997

The above answer is great, but I would also add:

They used their own patched php code which was naive at best, pretty terrible at worst
Their security was so bad that hackers have managed to get the account database more than once
They had NO SOURCE CONTROL

Most of this is in this excellent wired article: http://www.wired.com/2014/03/bitcoin-exchange

Basically, this is a website that would have been built by amateurs and had no business doing anything security related.

Jimmy Song

Posted 2015-01-26T22:31:59.987

Reputation: 7 067