Mt. Gox Bitcoin Loss Was an 'Inside Job,' According to Japanese Police | Coinspeaker

Mt. Gox Bitcoin Loss Was an ‘Inside Job,’ According to Japanese Police

| Updated
by Polina Chernykh · 2 min read
Mt. Gox Bitcoin Loss Was an ‘Inside Job,’ According to Japanese Police
Kolin Burges (left), a self-styled cryptocurrency trader and former software engineer, protests against Mt. Gox in Tokyo after half a billion dollars’ worth of bitcoins initially went missing. Photo: Kolin Burges/Twitter

The Yomiuri Shimbun reported that most of bitcoins dissapeared from Mt. Gox were as a result of fraud, despite the company’s claims it was due to hacker attacks.

Almost 99% of all the bitcoins that were stolen from Mt. Gox last year were a result of fraudulent activities, reported Yomiuri Shimbun newspaper.

Although the company stated that US$370 million in digital currency went missing due to hacker attacks, just 1% of cryptocurrency was actually taken by hackers.

The case is being investigated by the Metropolitan Police Department (MPD), which has already claimed that 650,000 bitcoins disappeared from the exchange in total and only 7,000 due to hacker attacks.

According to the article, the remaining 643,000 bitcoins have disappeared through internal means. The police suspect that an unknown third party may have taken the bitcoins owned by Mt. Gox’s customers.

As follows from the investigation, the balances of the two suspicious accounts continued to increase, although no purchases were registered. In order to obtain a profit margin, the unknown party has repeatedly sent the exchange users’ money to these suspicious accounts, with transactions not being recorded. However, due to some reasons, the customers’ funds were lost after the sales transactions were carried out.

The MPD suspect that the fraudulent activities have been realized by somebody who is a part of the exchange’s management team. It is also going to question all the employees at Mt. Gox and the people involved in operating the company.

Opened in 2006, Mt. Gox has soon turned into the leading player within the cryptocurrency market. On February 28, 2014, the company announced its bankruptcy following a hacker attack. As a result, about 127,000 people, including citizens from Japan and the United States, have lost their money, which at the time accounted for over $730 million.

“We believe that there is a high probability that these bitcoins were stolen as a result of an abuse of this bug,” Mt. Gox wrote on the website and added that the losses were possibly due to “a variety of causes including hacking by third parties.”

Most of the missed bitcoins were never found, except for 200,000 bitcoins that were discovered then in one of Mt. Gox’s accounts.

When giving an interview to Yomiuri Shimbun this December, Karpeles noted a person familiar with the system could have implemented the transactions.

There are still little chances that the customers will receive their digital currency back, Yomiuri Shimbun reported, even after discovering the location of the lost bitcoins.

Bitcoin News, Cryptocurrency News, News
Related Articles