Hackers allege Mt. Gox CEO still controls 'stolen' Bitcoin

Hackers allege Mt. Gox CEO still controls 'stolen' Bitcoin

Summary: Anonymous hackers claim to have published "evidence" of fraud conducted by Mt. Gox management.

TOPICS: Tech Industry

Following the closure of Mt. Gox and the theft of Bitcoins worth millions, anonymous hackers claim to have published evidence that customer Bitcoin is not missing -- but instead is held at the heart of attempted fraud.

Last month, the abrupt closure and week-long silence of Mt. Gox and its team frustrated, confused and angered investors. Once the dominant trading post for the cryptocurrency, Mt. Gox closed its doors after saying that cybercriminals managed to steal approximately 850,000 BTC, worth over $500 million, in cyberattacks taking place over several years.

Company CEO Mark Karpeles said Bitcoins were lost "due to weaknesses in the system," and while Mt. Gox has now filed for bankruptcy in Japan, thousands of users have been left out of pocket -- as well as in the dark over their investments' future.

Now embroiled in bankruptcy proceedings, Karpeles and Mt. Gox staff have gone quiet, but this hasn't stopped other parties from trying to get to the bottom of the issue. Over the weekend, anonymous hackers claimed to have broken in to the trading post and accessed to Mt. Gox data. After taking over Karpeles' blog and Reddit account over the weekend, on Pastebin, the group who broke in to the system said:

"It’s time that Mt. Gox got the Bitcoin communities' wrath instead of Bitcoin Community getting Goxed. This release would have been sooner, but in spirit of responsible disclosure and making sure all of ducks were in a row, it took a few days longer than would have liked to verify the data [...] Included in this download you will find relevant database dumps, csv exports, specialized tools, and some highlighted summaries compiled from data. Keeping in line with fucking Gox alone, no user database dumps have been included."

According to Forbes, the 716 megabyte file dump appears to include personal data including Karpeles’ home address and resume, an Excel spreadsheet of over a million trades, Mt. Gox's Bitcoin balance and screenshots of the hackers' access to such information through database cracking.

Read this

The Mt. Gox bitcoin debacle: Bankruptcy filed, customer bitcoin lost

The Mt. Gox bitcoin debacle: Bankruptcy filed, customer bitcoin lost

UPDATE: Mt. Gox has closed the bitcoin exchange and filed for bankruptcy in Japan.

Within the Pastebin summary, the hackers claim that the trading posts' current balance is 951,116 BTC, which if true, means that customer Bitcoin has not been lost -- and therefore fraud has been committed.

It is worth noting that this leak could show nothing more than poor accountancy practices -- one aspect of the company which has been reported as a crucial factor which led to the original cyberattacks going unnoticed for so long -- and the database may only show Bitcoins that were believed to be safe but were already gone. However, since Mt. Gox has filed for bankruptcy protection, the public ledger of Bitcoin transactions -- the Bitcoin blockchain -- has not registered the movement of "stolen" coins.

In related news, whether or not Mt. Gox personnel have sought to capitalize on their customers, cybercriminals have jumped upon the demise of the Bitcoin trading post in their own way to profit.

According to a press release (.PDF) issued by Mt. Gox, phishing campaigns have been making the rounds. Within the spam emails, hackers have used Mt. Gox's identity and asked for the name, address, username, password and bank account numbers of those who have lost Bitcoin.

Topic: Tech Industry

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  • It's possible

    Something for police agencies to investigate. And since Mt. Gox just filed for bankruptcy in the US, I think the FBI has jurisdiction (given that US bankruptcy trustees work for the Justice Department).
    John L. Ries
  • Waste of taxpayer (real) money

    I don't think that U.S. law enforcement agencies or courts should spend one dime of taxpayer money investigating or prosecuting anything related to bitcoin losses. The people that traded their real money for bitcoins generally did so for one of three reasons: to engage in illegal drug trafficking, to avoid paying taxes they owed, or as an ideological protest against the very system of laws and courts they now seek relief from. All that can or should be said to their complaints of fraud or theft is boo-hoo. They were doing something they shouldn't have been and it blew up in their faces. No one held a gun to their heads and made them exchange their real money to con men for Libertarian play money.
    Sir Name
    • Waste of human (real) thought

      You obviously know with absolute certainty the reasons why each and every person who invested in Bitcoins did so. I applaud your omniscience and even-handed retribution. Say, are you actually God? Forget about the fact that in America, citizens are supposedly innocent until proven guilty by their (usually) rigged court system. Your deft use of brain power also led to the amazing claim that "no one held a gun to their heads". Wow, did you think that one up all by yourself? You think the points you made are rock-solid, which is hilarious to me.
    • I disagree

      If there's real evidence of fraud, then it should be investigated and if it's strong enough to prove guilt, prosecuted. Yes, Bitcoin can be at least partially categorized as "libertarian play money", but fraud is still a crime in every country on the planet, and police and prosecutors are obliged to consistently enforce the law.
      John L. Ries
    • "Libertarian play money"

      Cue adornoe ...

      P.S. Is the U.S. dollar real anymore, given that the U.S. national debt is nearly $17 trillion U.S. and will, likely, never be repaid? From my perspective, it's all 'funny' money.
      Rabid Howler Monkey
      • I don't think Adornoe has said anything about Bitcoin...

        ...despite his professed former affiliation with the Libertarian Party. He would know why he hasn't commented better than either of us (but it may simply be lack of interest).
        John L. Ries
  • Hoax exposed

    It is easy to get a Bitcoiner to agree that if I lose my Bitcoin wallet and the currency contained then all other coins are that much more rare and that much more valuable.

    But when you show them how the price of Bitcoins crashed in sympathy to Mt. Gox when that exchange lost 850,000 of the minted Bitcoins, they can't explain the crash.

    The knee jerk is to say, "Those Bitcoins weren't destroyed or lost. They were stolen!"

    But then you have to remind the Bitcoiner that nobody knew the Bitcoins were stolen yet at the time of the crash. If anything, even more people came in with even more cash to buy at that time.

    So now it appears that those coins are STILL TRAPPED THIS WHOLE TIME? Wow, what does that say for Bitcoin prices when they are let loose out of Mt. Gox?
    • Mt Gox Buyout coming

      When the price of Bitcoins crashes under the artificailly high bottom of $91.500 USD, then investors will look to come in with cash and buy the whole thing out to settle the mess.

      I suggest these coins be reminted into a new crypto that is purposely built to have laws and financial service regulations, and most importantly customer service.
    • The crash

      The crash was mostly confined to Mt Gox, while the rest of the exchanges had a less severe drop. Stolen Bitcoins are still out there and thus still count as "available"; the only way you "lose" a BTC is when someone makes a doo-doo and loses the wallet's private key.
  • Do Bitcoins Have...

    ...unique individual mathematical identifiers akin to fingerprints/dna?
    I expect that mined by complex mathematical formula that they indeed would have such.
    Brilliant forensic auditors then should be able to trace the path of these units in the closed system of the maximum possible approx. 21M of these existing.
    What say ye?
    • I've thought the same thing

      The trick is identifying the owners of the wallets, but I have to think it's possible to plant known BTC fragments and trace their circulation through the system (in much the way radioisotopes are used to map bodily functions). It could be done for purposes of criminal investigation, or merely as a form of scientific research.

      I think it highly likely that the US Secret Service, the FBI, or both, are working on such techniques as we type.
      John L. Ries