Japan’s leading English newspaper, The Japan News, is reporting that their sources in Metropolitan Police Department say only 1% of the 650,000 Mt.Gox bitcoins were lost to hacking and that the remaining 99% were lost due to fraud.
Former Mt.Gox CEO and only employee, Mark Karpeles, has kept up the story that the coins were stolen because of a bug in the bitcoin’s code called transaction malleability. The bug allowed attackers to change the transaction ID and act as if they never received the transaction. Karpeles has maintain that attackers used this temporary flaw to drain the exchange of its bitcoins.
This new report supports the idea that the lost Mt.Gox bitcoins were an “inside job,” either by Karpeles or one of the numerous contractors he had work for the company. It is important to note, nobody tied to the case has said that they suspect Karpeles or freelance contractors of pulling an inside job.
Two trading bots named Willy and Markus are highly suspected to be of been operated by Karpeles in order to manipulate the market. The bots bought a combined $2.5m worth of bitcoins and never sold any. The two bots are largely attributed to rising of bitcoin’s price from the high 200s to over $1,000 and the subsequent crash following the rise.
Karpeles is currently in and out of court dealing with the legal issues of the lost 650,000 bitcoins, which at of writing are worth $204,582,950. Many of the people who lost their bitcoins at Mt.Gox have been demanding that they see reimbursement for their losses.
The most recent legal developments has been the announcement that Kraken, a US based bitcoin exchange, will help Mt.Gox bankruptcy trustee, Nobuaki Kobayashi, examine the records left my Mt.Gox in order to see if the coins were indeed stolen by hackers or Karpeles himself.
The full report by the newspaper on the matter was be released in their print edition on January 3rd.
What do you think the findings mean for the MtGox investigation?
photo source: exame.com
photo source: Akemi Miyashita