Police suspect fraud took most of Mt. Gox's missing bitcoins

Japanese police believe only 1 percent of some 650,000 bitcoins was taken by hackers, according to the Yomiuri Shimbun newspaper

Nearly all of the roughly US$370 million in bitcoin that disappeared in the February 2014 collapse of Mt. Gox probably vanished due to fraudulent transactions, with only 1 percent taken by hackers, according to a report in Japan's Yomiuri Shimbun newspaper, citing sources close to a Tokyo police probe.

Of the 650,000 bitcoins unaccounted for -- worth about US$208 million today -- only about 7,000 appear to have been purloined by hackers, the newspaper reported on New Year's Day, adding that investigators have yet to identify who was responsible.

That conflicts with the explanation by Mt. Gox, which blamed a bug in the Bitcoin system when it filed for bankruptcy on Feb. 28.

"We believe that there is a high probability that these bitcoins were stolen as a result of an abuse of this bug," Mt. Gox said in a statement on its website that day, which suggested "a variety of causes including hacking by third parties."

"There's not much I can say at this point, except the fact that I will continue investigating in order to find what really happened," former Mt. Gox CEO Mark Karpeles said via email on Thursday. While Mt. Gox is being liquidated under the direction of a trustee, Karpeles is still CEO of parent company Tibanne, a small IT firm based in Tokyo.

In an interview with IDG News Service in November, Karpeles said security at Mt. Gox was not what it should have been. In 2013, the startup began taking in millions of dollars worth of bitcoin and tens of thousands of new customers per month, peaking at about 1.2 million customers in total.

The disclosure follows months of investigations by police and others into the tangled mess surrounding the disappearance of the 650,000 bitcoins.

Police investigators analyzed Internet connection records for various transactions on the exchange. It found that bitcoins were being pooled by unknown parties and the pools did not correlate to customer accounts, according to the Yomiuri newspaper.

In November, Bitcoin exchange Kraken was enlisted to help investigate the missing bitcoins as part of the liquidation of Mt. Gox.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags internetlegalfinanceindustry verticalsInternet-based applications and servicesMt. Gox

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Tim Hornyak

IDG News Service
Show Comments

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Laura Johnston

MSI GS65 Stealth Thin

If you can afford the price tag, it is well worth the money. It out performs any other laptop I have tried for gaming, and the transportable design and incredible display also make it ideal for work.

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?