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Mt. Gox kept exchange open despite knowledge of large-scale theft

By Jeremy Kirk
March 12, 2014 08:53 PM ET

Mt. Gox would have charged fees for those transactions, which traders could pay in cash or the equivalent in bitcoins. Mt. Gox had a tiered fee system that rewarded higher-volume traders with lower fees.

The highest fee paid by customers was 0.6% per trade, for volumes amounting to less than 100 bitcoins per month. For example, if a trader sold one bitcoin for $380.54, the fee would have been $2.28. The lowest fee was 0.25% for volumes higher than 500,000 bitcoins per month.

Without figures from Mt. Gox, it's impossible to know exactly how much it collected in fees during the period, but even with the highest discount it would have taken in an average of about $47,500 a day, based on an average of its trading volumes. Over 19 days, that would amount to $902,000.

The fees would have been collected in a mix of cash and bitcoins. If Mt. Gox was indeed selling bitcoins it no longer had, it would mean any fees it collected in bitcoins were worthless.

Since Mt. Gox said it was also missing $27.3 million in cash from customer deposits, it raises the possibility that customers -- despite seeing a cash balance displayed in their account -- might have actually been buying bitcoins that did not exist, with cash that was already long gone.

The Mt. Gox call center, set up after the bankruptcy filing to answer questions from customers, was unable to comment Wednesday on any fees collected. An attorney at one of Mt. Gox's law firms in Tokyo said he was unable to comment.


   Mt. Gox historical prices
Mt. Gox continued to process tens of thousands of transactions a day in the two weeks leading to its collapse, potentially collecting fees.

(Tim Hornyak in Tokyo contributed to this report.)

Send news tips and comments to jeremy_kirk@idg.com. Follow me on Twitter: @jeremy_kirk

Reprinted with permission from IDG.net. Story copyright 2014 International Data Group. All rights reserved.
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