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Mt. Gox CEO Charged With Stealing $2.7 Million
An anonymous reader writes: After being arrested six weeks ago in Japan, Mt. Gox CEO Mark Karpeles has now been formally charged with the theft of $2.66 million worth of clients' money. "Tokyo-based MtGox shuttered last year after admitting 850,000 coins — worth around $480 million at the time, or $387 million at current exchange rates — had disappeared from its digital vaults. The exchange, which once said it handled around 80 percent of global Bitcoin transactions, filed for bankruptcy protection soon after the cyber-money went missing, leaving a trail of angry investors calling for answers." Karpeles still denies doing anything illegal. The case is proving difficult for Japanese authorities to unravel, and they're taking it as slowly as they legally can.
they are digital, you can't steal them
"...had disappeared from its digital vaults." the very terminology is misleading. It's just data on disk arrays, and if there's encryption it's decryptable by the owner of the disk array.
The term vault shouldn't be used anyway, unless the "vault" computer is literally air-gapped. We have a vault for storing data for legal purposes, it's a literal interal concrete structure within the building with a reinforced steel door, and only a few people have keys that open it. The only wiring going in there is for lights and fire alarm/smoke detectors. No outlets, no data, no phone. It's not a bank vault, but it would require a degree of commitment to get in there.
Do not look into laser with remaining eye.
What happened with all the MTG cards?! They've got to be worth something!
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he could have applied for a gov bailout and used that to pay himself a bonus.
by TheSpoom (715771) Uncaring Linux user here. I have nothing to add to this but please continue. *munches popcorn*
Hard to have any sympathy for the situation. If you sign up for an currency that is designed to be outside of the world governments, don't come crying to the government that dumb ass idea blew up in your face.
it's called a bonus.
Chewbacon
The Bible is like Wikipedia: written by a bunch of people and verifiable by questionable sources.
Japan's criminal justice system is terrible, just terrible.
Crime is very low to start with so police are mostly helpful cop on the corner type or worst case dealing with drunks, gropers, or teen prostitution (but they usually don't bother with that one). There are a very few 'elites' who handle the nasty stuff, and they have an extremely high conviction rate because once they finger you you're going to jail whether you did it or not. Prosecution, defense, and judge all go with that (the detective said so!), so the only thing up for debate, really, is the sentence. There's a grand jury for a few things but they're mostly go along go along too.
And they know nothing at all about technology. There was a thing two (?) years ago where some mother's apartment dwelling otaku freak was cancelling Kurko's Basketball (a popular manga/anime) events left and right for over a year and they couldn't do a damn thing about it. Eventually the freak got so cocky he got careless and did things like using messenger cats. My memory's a little hazy, but it went on seemingly forever and the cops were completely helpless. And they're terrible with corporate crime like this (the handling of the Olympus affair was a disgrace) since usually it's all a matter of what Japanese politicians you have in your pocket - but apparently Mt. Gox didn't have any. Whoops.
I think Karpeles did it, or at least someone close to him at Mt. Gox did it, because it's just entirely too fishy, but I don't think this will prove it.
embezzlement:
The fraudulent appropriation to his own use or benefit of property or money in trusted to him by another
-Black's Law Dictionary
One can embezzle any type of property, including horses, currency, and chocolate. The distinguishing feature of embezzlement is that the culprit as been entrusted with the property. Theft would be if he took the thing from you without your permission. Embezzlement is when you hand him the thing, expecting him to hold it for you, but he uses it for himself.
Embezzlement applies to Mt Gox because people sent their stuff to Mt Gox willingly.
A rhetorical one, but one you should find out the answer to none the less: What was the repayment rate of the bailout loans?
See it turns out the money wasn't a gift. The government didn't say "here's free money," rather they made loans, acting as the lender of last resort (which is something governments do to stabilize financial systems) but as with any loan, repayment was expected when possible. So go have a look and see what the repayment rate was, I'm not going to ask you to take my word for it, and let us know.
Also, can you point out what law the companies that got bailed out broke?
I recall that Japan has a >99% conviction rate, which is pretty unhealthy for a democracy and is comparable to many totalitarian regimes. This probably means that for Karpeles his conviction will be a formality and it's just a question of how many years he's going to get.
Well, you have to ask *why* the conviction rate is so high before rushing to any judgement. I'm not an expert, but Plea bargaining is not allowed under Japanese law. So they can't use lower level criminals to help obtain evidence for higher level ones. There's no incentive for the low level criminal to cooperate, his sentence is the same no matter what. So they don't cooperate. Weak cases that rely on this sort of criminal cooperation just don't go forward due to lack of evidence.
Even those who arrange and design shrubberies are under considerable economic stress at this period in history.
I see a couple of practical problems with taking the bitcoin blockchain concept and attempting to apply it to balances denominated in government currency (or any other extenal asset)
1: the bitcoin blockchain gains it's security against modification of history from having lots of computing power behind it. That computing power is currently "paid for" by issuing new bitcoins*. The beauty of this system is that as the userbase grows and the value of a bitcoin grows the effective reward and hence the ammount of computing power devoted to keeping the system secure grows with it. A system where the balances are exchangable at a fixed rate for "governement currency" has to be far more careful about creating balances out of thin air if it doesn't want to go bankrupt in short order.
2: For a blockchain balance demoninated in "government currency" to be anything more than a fiction there has to be an entity that can actually make the exchanges both taking "government currency" and exchanging it for a balance in the blockchain (which means they need the ability to create balances in the blockchain out of thin air) and taking a balance in the blockchain and exchanging it for government money. That means you have a central entity for government regulators who don't like anonymous transfers to attack.
*Bitcoin does eventually intend to transition for a scheme where the "miners" are paid through transaction fees but it remains to be seen if that transaction will be a success or if mining power will drop off to the point where a 51% attack becomes accessible to a far wider range of adversatories.
note: i'm known as plugwash most places but i screwd up registering that here somehow in the past and now can't register
And they know nothing at all about technology. There was a thing two (?) years ago where some mother's apartment dwelling otaku freak was cancelling Kurko's Basketball (a popular manga/anime) events left and right for over a year and they couldn't do a damn thing about it. Eventually the freak got so cocky he got careless and did things like using messenger cats. My memory's a little hazy, but it went on seemingly forever and the cops were completely helpless. And they're terrible with corporate crime like this (the handling of the Olympus affair was a disgrace) since usually it's all a matter of what Japanese politicians you have in your pocket - but apparently Mt. Gox didn't have any. Whoops.
I was intrigued by this, so I did a little research. It's a shame you really did not do a very good job here with explaining what happened as your post was interesting and on topic, but yeah, this paragraph could have been a lot better. The "otaku freak" as you call him did not personally cancel anything as your writing seems to claim. What he did was send threatening letters, sometimes with suspicious liquids or powders, to various places that were associated with the anime or its writer in some way and those places canceled many events related to Kuroko's Basketball. As to why he apparently had it in for this particular anime, it gets into sub-genres of anime that I'm not really qualified to talk about it and it seems that maybe he had a problem with the people who were interested in it and focused his rage at the creators and supporters. Apparently popular anime series have "events" of some kind in various places, but I have no idea what goes on there.
Anyway, Japan sounds better to me than some countries I could name where not only is it impossible to lock up anybody for the rest of their life no matter how many people they kill, they actually start to feel sorry for the criminal because he's been locked up.
I'm not a cryptocurrency expert, so pardon my ignorance, but...
Am I seriously expected to transfer bitcoins from some "hot" wallet to a "cold" wallet and store that in a fucking safe???
I don't have a safe. I don't want to print/tattoo/OCR a wallet. I don't trust them to exist 50 years from now.
I do want to be able to keep as many copies as possible.
You know, like my bank has backups (they do, they're not going to forget anyone's debt, e-v-e-r).
I want a copy on my phone, all laptops, on an RFID card, wearables, on S3 for all I care.
A digital currency where I can't keep digital copies of my wallet?
A cryptocurrency that clearly didn't figure out how to properly encrypt wallets?
Expecting some federal reserve to back this shit up with, e.g., gold is just a hackaround the fact that bitcoin's security model simply does NOT work.
> I don't think there's a single government that has decided what Bitcoin actually is - a currency or personal property.
It's a scarce digital commodity. Word documents or mp3 files are easily copied. Control of a bitcoin address, and whatever balance it holds, cannot. The control comes from a private 256 bit key, which is required to transfer control of the balance to another address. The balance can't be copied because you can trace it back through previous transactions to the point where the coins were first generated, and that history (the blockchain) can't be altered, but *can* be verified by anyone who wants to check it. Inability to copy it, and a limited supply ( no more than 21 million units, ever) makes it a scarce good in the economics sense.
Digital means it is easy to transfer, scarcity means it is in limited supply, and other technical features make it useful to people, creating a demand. Supply and demand establish a market value, like for other commodities. It's a commodity because one bitcoin is pretty much like any other bitcoin, in the way barrels of oil or bars of gold are pretty much the same. So most people don't care *which* bitcoin they get, just *how many* they get. That makes them easily traded, unlike, say, houses. Houses are all different sizes and shapes, and every one of them has a different physical location. People care very much *which* house they get, so they are not easily traded for other ones.