One Year Later, We're No Closer To Finding MtGox's Missing Millions

itwbennett writes: When Mt. Gox collapsed on Feb. 28, 2014, with liabilities of some ¥6.5 billion ($63.6 million), it said it was unable to account for some 850,000 bitcoins. Some 200,000 of them turned up in an old-format bitcoin wallet last March, bringing the tally of missing bitcoins to 650,000 (now worth about $180 million). In January, Japan's Yomiuri Shimbun newspaper, citing sources close to a Tokyo police probe of the MtGox collapse, reported that only 7,000 of the coins appear to have been taken by hackers, with the remainder stolen through a series of fraudulent transactions. But there's still no explanation of what happened to them, and no clear record of what happened on the exchange.

Comments

Obvious

[nospam007]

Somebody buried it in Second Life.

Yes, and?

[Minwee]

Wasn't that the whole point behind Bitcoin? That you could fleece investors without leaving a paper trail?

Re:Yes, and?

[Anonymous Coward]

Bitcoins are 100% traceable, but wallets are not, and it wouldn't take much shell game playing for enough plausible deniability to be entered into the system, especially if the coins are taken off the board for several years while the currency rises to quad or five digit values per dollar. (BitCoins are too much in use to ever really go down in value for any length of time now that China is in the game.)

Say a wallet has a hundred coins in it, all "dirty". For example, the blockchain traces show they were all in an exchange's possession/wallet, then stolen. Realistically, the coins could be spent by them being put into wallets (perhaps even printed out on paper currency), and distributed/laundered via that method. A few years later, when the wallets are opened and the coins spent, the coins are owned by completely different people, and tracing the gap from when the coins vanished to when they were put back into the ecosystem becomes almost impossible... like trying to trace a dollar bill.

If tainted coins hit an exchange or other service that trades BTC for other goods (even if they just trade BTC for their own currency and back again), unless that exchange has complete records of every transaction, the trail of stolen coins will stop with them, as it takes only one single broken link in the chain to have a trail be impossible to pursue by normal means.

BTC made a lot of money for the early adopters, but it still has not yet lost momentum as a currency, and only will gain in value over time.

Re:Yes, and?

[kaizendojo]

And the worst part is seeing some anonymous idiot trying to turn every discussion into a political scat fight.

Re:Yes, and?

[gstoddart]

Sounds like it was an overwhelming success, then.

Every time I see stories like this, I think ... gee, so you entrusted millions of dollars with an entity which isn't a bank, isn't regulated as a bank, and who more or less mostly just promised they wouldn't steal your money ... and somehow people are surprised by this.

On what basis, exactly, does handing strangers your money make sense when you have no legal basis to get it back?

It's hard not to see this as a self inflicted problem, and people handed sacks full of money to some guy in an alley with no receipt thinking they were investing.

Sorry, but I'm afraid this was people believing that Bitcoin was somehow magic, and that nobody would ever be a crook.

One year later, I'm not closer to caring.

[JaredOfEuropa]

An anonymous currency, that allows you to set up an exchange in any country, and without any oversight whatsoever. The whole thing is trust based. Would you leave your cash with any random stranger in some Thai web cafe for safekeeping? Even if you see others do the same, seemingly without worry? Because leaving any significant amount of BTC in an exchange amounts to the same thing.

and you never will find the money

[circletimessquare]

people who seek to get a currency away from "evil" government control get exactly what they want: worse. no government, no accountability. no accountability, you get screwed, and the only answer you will ever get is "oh well"

you can't run from government regulation in hatred of it as a great evil, and then expect government to come to rescue you when you inevitably get fucked. you got fucked, because there's no regulations... which you *asked for* and were enthusiastic about, moron

all this episode boils down to is some economically clueless fanboys needed to learn the hard way what the rest of us already know: that a currency backed by a government is obviously better than "free" alternatives

all the evil shit a government can pull (and they do, i'm not defending government, i'm just noting there is far worse out there) is nothing compared to the evil that exists without a government backed currency and government oversight, accountability, and regulations of finance and banking. i'm not in love with government, i just recognize it as the *least worse* evil when it comes to currency mechanisms

you can petition and redress your grievances to government, and get a hearing, and maybe justice (if you actually understand right and wrong and you aren't some deranged crackpot out for "justice")

you can't do that against random assholes whom you trusted with your deposits for some ignorant reason that just basically boils down to uneducated enthusiasm

it's like the people who rant and complain about how evil the police are. and then their car gets broken into... and... drum roll please... they call the police. you want to reform the police, fix the police, fight corruption. not fight their existence. you need the police. without the police, civilization quickly falls. of course there are crooked cops and bad cops. so fight that, the bad apples in the system, rather than fight the entire system. which you need, and want, despite the fact you aren't educated enough to see or understand that far worse problems exist without them. the same with government regulation of finance and banking. it is warped and corrupt and crooked. so fight the corruption. don't fight the whole system. because without the system, far worse shit will befall you

people need to be educated enough on economics and history to know what kind of abuses exist out there without government oversight of banking

Re:and you never will find the money

[circletimessquare]

look at the article we are commenting under. there is your answer

without protections, you get fucked

it's kind of like antivaxxers: they have no fucking clue how horrible a world of constant deadly diseases was. so in this bubble of ignorance, created by progress, they only see the tiny "evil" in what we have to do to maintain the advance: get injections. they react to that as the evil that needs to be defeated. as if that's the only evil possible. and when enough of them allow enough attack vectors for a deadly disease to proliferate, people die. so here we have the real evil at work: ignorance

the world is not a choice between unicorns and rainbows versus shit and broken bones

the world is often a choice between various shades of bad situations

wisdom is picking the least bad situation, and comparing it versus the other bad options. rather than ignorantly comparing the least worse bad situation against uneducated perfection fantasy. so government regulations, with all of the corruption and rent seeking and regulatory capture, etc., is better than no government, or weaker government

people need to fight corruption, not government itself. in fact, those who corrupt government are often the ones loudly proclaiming government to be the enemy, rather than the corruption they create. and uneducated fools fall for their lies

another example: the FDC

like antivaxxers, certain paranoid economically illterate wackjobs see great evil in the FDC. and in their abject economic and historical ignorance, they have no clue of the historical suffering that led to the FDC. no, in their mind these controls exist because of vast conspiracies and assorted nutbag fantasy rantings about efforts to control us all, because reality is apparently an episode of scooby doo

why does the FDC actually fucking exist in the first place? study your economics and your history. don't trust the low iq herp derp hysterics of alex jones types to "educate" you

the reasons are mundane and sensible for the FDC. not dark and creepy. a world without them, the world before the FDC, is far, far worse:

every dozen years, there would be a banking panic, and people would lose their life savings

simple history. simple economic fact

that's the real reason why we have the FDC (cue paranoid historically and economically illiterate whining about "freedom")

and here we have bitcoin enthusiasts losing their deposits by entrusting them to random assholes without any government oversight, and guess what?

"oh well"

that's what life is like without "evil" government regulations in finance

Re: and you never will find the money

[circletimessquare]

You didn't even read what I wrote

Here, I've excerpted for you. Educate yourself, try again:

>the world is not a choice between unicorns and rainbows versus shit and broken bones

>the world is often a choice between various shades of bad situations

>wisdom is picking the least bad situation, and comparing it versus the other bad options. rather than ignorantly comparing the least worse bad situation against uneducated perfection fantasy. so government regulations, with all of the corruption and rent seeking and regulatory capture, etc., is better than no government, or weak government

You don't want to be oppressed? Ever try living in a place with no government or weak government?

FIX it, don't destroy it.

It's Silk Road, Duh..

[goombah99]

Has no one noticed that the coins disappeared at almost the same time the FBI seized Silk Road's Assets?

Re:Anybody actually looking?

[goose-incarnated]

It's bigger than some countries' entire currency, Amazon and Newegg both take it as a form of payment,

No, they don't. They point you to an exchange because they only take real money. They absolutely will not let a single BTC touch their system. They do not accept it as a form of payment. They do, however, point you to an exchange at time of sale.

it's approved as a security backing now by the SEC and FINRA,

So are CDS, houses, stocks, commodities, etc. That don't make any of them a currency, or money.

and all serious investors take it seriously.

Name three.

So come back out of 2010 and join us in 2015 please and stop calling it a pretend currency.

On this you're absolutely correct. It is not even a pretend currency.