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Japanese Police Arrest Mount Gox CEO Mark Karpeles
McGruber writes with the news as carried (paywalled) by the Wall Street Journal that Mark Karpeles, who headed bitcoin exchange Mt. Gox, has been arrested by Japanese police: In February 2014, Mount Gox filed for bankruptcy, saying it had lost 750,000 of its customers' bitcoins as well as 100,000 of its own, worth some $500 million at the time. A police spokesman said Mr. Karpelès is suspected of manipulating his own account at the company by making it appear that $1 million was added to it.
The BBC reports the arrest as well, and notes that the coins missing from Mt. Gox represent 7% of all Bitcoins in circulation.
Nothing will happen to you - in fact, demand the government give back all that money they stole from you after you stole it.
The firm said it found the bitcoins - worth around $116m (£70m) - in an old digital wallet from 2011.
They just "found" it in an old wallet? Who would leave $116m to be just found? . The whole story seems to be fishy right from the start.
"Mount Gox"? Got to admit, I do tend to think of it like that, but it was (back in the day) an acronym for "Magic the Gathering, Online eXchange". Just MtGox.
Don't trust private currencies from hucksters such as these guys. Their business is based on pure FUD. Play it safe with the government of your choice, one that has its millions of citizens ready and willing to back it up.
“He’s not deformed, he’s just drunk!”
Considering there's some master file where all the movement of all bitcoin and fractions of it are stored, I wonder what's up with these bitcoin. It should be possible to trace these bitcoin: from the people that lost them, the wallet of MtGox can be traced. And then it can be traced whether they're still in that wallet.
And then? If a wallet is lost, the bitcoin is lost forever? No way to re-mine it or anything? Because this would be bad for the future of bitcoin. 7% disappeared with the demise of MtGox. A large number got lost to some UK garbage belt. More will be lost to whatever causes. Over time there may be no bitcoin left!
I guess it turns out that there are some advantages to government backed [inflationary] currencies with strong banking regulations & government backed insurance on individual accounts.
Yes and no. Bitcoin could have that too, it's just far too new for anyone to have bothered. It won't be government backed, but neither is gold. Bitcoin is really just an easily exchangeable commodity like gold or silver. You don't exactly NEED a banking system to exchange it between persons easily. But if you have a large quantity of it, it makes more sense for a trusted entity to hold it so it doesn't get stolen, or burned up in a fire. But yes, I agree the businesses that exchange bitcoin should be regulated. And in fact in the US they DO have to abide by regulations as a money exchange business. That's a good thing.
I'll certainly tell you that bitcoin is full of nutty libertarians who think that fiat currency and the fractional reserve system are some kind of evil monster. I think that's stupid and shortsighted. But don't mistake bitcoin for an ideology.
All currencies and even gold/silver/platinum only have value because people BELIEVE they have value. They're all (including bitcoin) consensual hallucinations.
I lost around 200 bitcoins in the first "crash"; it was very early on. Not widely reported.
I hope this guy spends some time in the slammer.
..don't panic
there are some advantages to government backed [inflationary] currencies with strong banking regulations & government backed insurance on individual accounts.
That kind of insurance, guaranteeing that you will get at least a fraction of your money back when convenient for the bank, could be replicated for Bitcoin, but it would only be of value to lunatics
All currencies and even gold/silver/platinum only have value because people BELIEVE they have value.
No. Gold, platinum and sliver have actual uses that contribute to their value. While much of the value may be speculative, they do have intrinsic value which is specific to each of them individually.
Bitcoin has no similar intrinsic value that isn't easily copied (and possibly improved upon) by any number of altcoins.
The biggest advantage of Bitcoin is that it's anonymous. The blockchain might identify which wallet had those bitcoins, but there is no way to know who actually controls that wallet.
Bitcoins are anonymous until the other party in the transaction (transfer) identifies you. One only needs the cooperation of the "seller" who accepted your coins to identify you, or the cooperation of the "buyer" who gave you coins, etc. For example you buy something with bitcoins and it gets delivered to you.
Their cops don't arrest your ass unless their prosecutor is pretty f_cking sure they can convict your ass.
Or if they're requested to arrest someone (eg by theUS)
Slashdot, fix the reply notifications... You won't get away with it...
If a wallet is lost, the bitcoin is lost forever? No way to re-mine it or anything? Because this would be bad for the future of bitcoin. 7% disappeared with the demise of MtGox. A large number got lost to some UK garbage belt. More will be lost to whatever causes. Over time there may be no bitcoin left!
Well to be fair a wallet is a file that can be duplicated, backed up, like any other file; or photocopied if a paper wallet. It doesn't hold coins, it only holds encryption keys that grant access to coins.
And one does not have to rely on an exchange, its this reliance on an exchange that can introduce a major vulnerability. Now your coins are in someone else's wallet, a wallet you cannot backup. If you keep your coins in a wallet you create and backup you may be much safer. Assuming of course you have a secure computer, basically a computer that has been used for nothing other than bitcoins. Use your wallet on your regular malware infested computer and now we have another major vulnerability. Similar story for a wallet on your phone.
Fortunately you can have as many wallets as you like. Wallets on your regular computer and phone with only a small amount of coins, walking around money for a few days. Another wallet on a secure computer with a larger number of coins to occasionally refill the walking around wallets, or make occasional "big" purchases. And an offline wallet (paper) where most coins are stored, more like a savings account.
The simple truth **today** is that bitcoin is not a "currency". It fails the "store of value" test, its too prone to user error for mass adoption. What it is is a good transaction mechanism, a way to quickly transfer/exchange fiat currency. Convert fiat to coin, immediately transfer coin, immediately convert coin to fiat. No holding of coins, just conversion to/from fiat as needed. Many merchants the bitcoin community touts basically do this. They contract with an exchange that offers merchant services. The merchant does all accounting and pricing in fiat, never touches a coin. When a customer wants to pay with coin the exchange silently steps in and presents a coin price and a payment account. The merchant is credited with the fiat amount immediately upon coin receipt verification, its credited fiat paid out daily.
Today **holders** of non-trivial amounts of bitcoins are largely speculators and a few enthusiasts.
> Bitcoin has no similar intrinsic value that isn't easily copied (and possibly improved upon) by any number of altcoins.
What you are calling "intrinsic value" is more correctly "utility value", the value we put on things for their usefulness. However, it is not an intrinsic property of an object. A gallon of water in the desert when you are thirsty is worth much more than a gallon of water to take a shower at home, when you have it supplied by a water utility at low cost. Both gallons are useful, and people are willing to pay for them, but different amounts.
In the case of bitcoin, it is the Bitcoin Network which gives it usefulness. Without the network, you cannot make transactions, and thus any coins you have are useless (you can't send them to anyone, and thus can't buy anything with them). Bitcoin has by far the largest network of it's kind. It consists not just of the relay nodes that forward transactions, but custom hardware, software applications, merchants who accept it, and users. That network isn't easily copied, it has to grow over time.
With the network, I can pay a programmer in Kiev from Atlanta easily, cheaply, and quickly. That's a pretty useful thing. I can also make payment contingent on a software script written into the transaction, because bitcoin was designed with a scripting language. I cam make my money programmable. That's a whole new useful feature.
Like many other networks, bitcoin responds to Metcalfe's Law. The more people who use it, the more valuable the network becomes. This is also true of fiat currency networks. Lots and lots of people use the US dollar. The dollar is thus highly useful, because you can spend it on lots of things in lots of places. Try spending a Zimbabwean Dollar anywhere, even in Zimbabwe. It experienced 10^25 inflation, and now nobody wants it. So if you have a stack of them, they are useless, except as a collector's item. Even though they were issued by a government, the size of the network that uses the currency trumps that.
Never mind the bloody bitcoins, those assholes still have 23 of my "Magic: The Gathering" cards from the "Cliches of Fantasy" series, including "Scantily clad female warrior with useless bikini armour that leaves her midriff exposed" and "Dwarf with massively oversized axe".
I bet Mark K already sold them for half their $34.50 value and spent it on a cocktail at some overpriced bar. Tosser.
I take it you have not created any wealth... No, you can do quite a bit of exchanging without the bank being involved. Rather than get into details, please accept that I have a safe in my home with plenty of money in it. I just recently ordered a BMW and paid that with cash. Now, obviously, there is a bank (and some credit unions and some investment houses) if I want a large sum of money. I have filled out the form (I forget the name, they make me sign one if I take out x-amount of dollars and I have been told it is best to take out big amounts and be honest, enough, about the reasons) and put down "cash on hand." (Actually I just put COH on it.) I call a week before taking out very large amounts or I go on Thursday evenings to get smaller amounts. This is not a great onus. I have put down property and stuff like that but usually I just get a bank note for things that large but the paperwork is the same. Hell, I even travel with cash. Just declare the shit and you are all set.
"So long and thanks for all the fish."
If people didn't mangle the name there should be no surprise - it's "MT GOX" as in "Magic The Gathering Online eXchange" - a card trading site for fucks sake people.
Typos like the one in the summary ("mount" Gox) and people referring to it as Gox without knowing why are part of the confusion that led to a reputation the site did not deserve. Hobby level bitcoin stuff behaved as expected. "Mass incompetence" in only perceived by people that thought it was a bank or some other thing it is not. It's like accusing a terrier for being incompetent because it can't do a drum solo.
In bitcoin it is deliberately built into the system (so that the early adopters at the top of the pyramid can clean up if enough suckers sign up).
If you have another example *in practice* please supply it.
I lost around 200 bitcoins in the first "crash"; it was very early on. Not widely reported.
I hope this guy spends some time in the slammer.
People also forget that such things happen with more than just Bitcoins. I wonder how much was lost when "The Donald" had his crash, and then somehow lept back up as rich as before as if he had just moved other people's money into a secret account.
There are a lot of such crooks about.