The Coin Telegraph had a chance to sit down with Pantelis Roussakis, Vice President, Australian Bitcoin Association, who lost an undisclosed yet ‘substantial’ sum as a result of the Mt Gox collapse
Coin Telegraph: Do you think BTC exchanges should be regulated to prevent another Mt Gox scenario?
Pantelis Roussakis: Yes I do. If nothing else, this event underlined that Bitcoin itself needs no regulation, but the players do. These are the people that we have to trust, the businesses that hold our accounts. And because you have two or three levels of security for your account, you feel safe. But the backend may not be secure at all.
CT: Are you planning legal action against Mt. Gox?
PR: No, personally I’m not taking any legal action. I’m very interested in watching the whole process go forward and unfold. Hopefully, something does happen and there’s an ability to regain some of the assets or bitcoins that were lost. But it’s also a matter of not wasting so much effort of chasing Mt Gox. There are better, smarter, and faster people out there already doing it.
CT: Do you think Karpeles [Mt. Gox CEO] belongs in jail?
PR: I think if the management was aware that they were insolvent or were in a negative situation and still took people’s money and still exchanged coins then that’s immoral and illegal in a whole range of areas. So in that case, yeah.
CT: What do you think about recent talks of some venture capitalists trying to revive Mt Gox.?
PR: If they can pull it off, then I think that’s pretty cool. One day the website was there and then suddenly it was gone, you couldn’t log in or contact anyone, call anybody. Then the log in suddenly came back and there was your account balance - so that information is not lost. But as far as restoration, right now, it’s a toxic brand image. Maybe they’re hoping people will forget.
CT: Can you give a brief overview of the Mt. Gox collapse and how affected the BTC community?
PR: As the vice president of the Bitcoin Association of Australia, I saw how this event really made everyone tighten their belt, fix their security, and get serious. It was a big jolt to everybody. So the people that didn’t have their finger on the pulse, like myself, got trapped.
But there were warning signs back in December. However, everything moved so slowly that nothing ended up happening. There was a cash transfer delay of three weeks, then it was two. The price fluctuated a lot - it was stupid.
They had been hacked two years prior. They lost around 750,000 coins and then were working on a marginal reserve the whole time. They upped their price and upped their fees to try and regain the coins that they have lost without actually telling anybody. And when this Chinese thing went ballistic, it just came crashing down and they couldn’t handle it.
Another problem was that you have this illusion of a place like this which you look at like a bank. Their website looks like a bank website; there are numbers in an account. And somehow they, I don’t want to say indoctrinate, but they make you feel like this ‘bank’ is big and safe when, in fact, their website was set up three weeks ago by some Bitcoin enthusiasts. And so you hang on and wait and then suddenly it’s too late, it’s a big mess.
But it was funny to watch that whole toing-and-froing. Mt. Gox threw it to the developer’s face and that bought then maybe a week’s time. And then they [the developers] said “No, we checked, it’s fine, there’s something wrong with you” and they [Mt. Gox] couldn’t deny. [laughs]
CT: Do you feel like this is a blessing in disguise as it weeds out the bad players from the game?
PR: I do, I think the market players are the true believers right now. But people lost fortunes during all that speculation that happened between the $US 500 - 1000 mark. But these true believers are still in the game, the whole industry is still in an upward roll. So people knew they had to make sure that everyone felt secure to do business and interact with the community.
CT: Are you still a believer in crypto currencies despite these setbacks?
PR: Well it’s a real test isn’t it? I still am. The technology wasn’t compromised and it’s getting stronger as more and more businesses are starting to accept it. It’s still working its way slowly into the mainstream. I think it is the alternative payment system of the future that we should all grab.
CT: Do you see more collapses like Mt. Gox in the future before the situation stabilizes?
PR: I think we’re gonna have a roller coaster for another 4 years. It’s still a fledgling thing. And the reason why Mt. Gox went down is because they were geeks and not accountants that were running it. But when security updates happen and things get improved, the technology will penetrate and saturate [the market] pretty rapidly.
In the far, far future, Bitcoin is going to be the currency used between nations to trade because no one will be able to trust anyone with actual currency to fairly value their own currency. And Litecoin will be something that we’ll use on an everyday basis.
Pantelis Roussakis is an Australian web and digital marketing specialist, social media speaker and corporate trainer. He has been a Bitcoin enthusiast for 3 years. He brings his visual communication and marketing skills to Bitcoin Australia so to create general awareness, educate and update members and the wider community.
Fernando Ulrich: "It seems ever more unlikely that Mt. Gox customers will be fully repaid. I'm not familiar with Japanese law, but I guess there is nothing the courts can do to oblige the owners of Mt. Gox to raise the necessary funds to pay depositors their money back, either in fiat money or Bitcoins. As far as I know, under Japanese law, Mark Karpeles' private assets can't be seized in case his company files for bankruptcy. It's a limited liability company; his responsibility is limited to the funds invested in the business.
What remains to be seen it how all those funds were lost. Was Mt. Gox incompetent? Did they adopt faulty and insufficient system security? Or were they outright fraudulent? It appears to me it's a combination of all of the above."