Precisely what did Mt. Gox do wrong?

Question

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

Answer 1

Specifically:

1. They blamed transaction malleability for a hack, which was clearly a lie - blaming Bitcoin for their own mistakes.
2. 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
3. Their communication with their customers leading up to the hack was generally awful.

Answer 2

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.