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Former Mt. Gox CEO Heads to Trial in Japan Over Missing Bitcoins
- peteretep 9y ago> spent money lavishly, including on > prostitutes I do not like what journalism in 2017 looks like.
- andrepd 9y agoHow do you mean? Phrases like that have been a staple of journalism for at least 150 years.
- mschuster91 9y agoAnd that needs to be changed. Sex work needs to be dragged out of that puritan hellhole, and highlighting thhat he spent money on prositutes but not anything else just perpetuates the view of sex work as "bad".
- revelation 9y agoThat is very laudable, but I'm not sure if prostitutes are ever going to qualify for a business expense
- logicchains 9y agoThey might if buying them for one's potential clients instead of for oneself?
- peteretep 9y agoThere is nothing suggesting they were, and as far as I can tell, nothing to justify this information's inclusion in the article.
- ImSkeptical 9y agoThe article also mentioned that he lived in an 11,000 dollar a month apartment. Surely you don't think the article is trying to demonize expensive apartments. I agree that the guy's use of prostitutes isn't relevant to understand the story, however, it adds colour, rightly or wrongly. If the article had said he spent the money sending his kids to private school, or investing in his wife's business, we might think of him as a caring family man. Instead, we get the image of a lavish playboy lifestyle.
- ccrush 9y agoExactly this. Hookers and penthouses just paints a certain image. I don't think it necessarily casts sex work in a bad light. In fact, quite the opposite. Then again, this may be a personal bias.
- peteretep 9y ago> How do you mean? A focus on the salacious rather than the important. > for at least 150 years You seem to consider that a mitigating factor, where I consider it to be an aggravating factor.
- andrepd 9y agoI don't, I consider it aggravating indeed. I read your comment as a "journalism these days" sort of rant, when perhaps you meant it more like "it's 2017 and we're still in this stage of bullshit journalism" kind of thing.
- deleted 9y ago[deleted]
- galeaspablo 9y ago> Bitcoin has suffered hacking incidents including one last year in which a major Hong Kong-based exchange Bitfinex suspended trading after $65 million in the virtual unit was stolen. Quality research. /s This is akin to saying HTTPS was hacked, when YAHOO got hacked.
- EA 9y agoOr that fiat currency is hacked when someone gets pickpocketed on the street.
- rev_null 9y agoI'd say that someone being pickpocketed of $65m would be pretty notable.
- vertex-four 9y agoIt'd be notable, but it wouldn't be a fault of the money itself.
- foota 9y agoWouldn't it be a fault of the currency's physical nature?
- JumpCrisscross 9y agoIf you stored $65 million in cash and had it stolen I'd go ahead and feel comfortable blaming you for choosing a stupid currency medium, i.e. physical cash.
- bpodgursky 9y agoIn terms of proportion, it is more like if someone walked into Fort Knox to count the gold and discovered that it was all missing. Sure, it doesn't discredit the * concept * of state-backed currency, but it would be informative.
- galeaspablo 9y ago> Bitcoin has suffered hacking incidents including one last year in which a major Hong Kong-based exchange Bitfinex suspended trading after $65 million in the virtual unit was stolen. Quality research. /s This is akin to saying HTTPS was hacked, when YAHOO got hacked.
- sprash 9y agoThe whole "hack" was very weird. Until today nobody knows what really happened. I wouldn't be surprised if the CIA or any other intelligence apparatus ransacked the place, enforced a few gag orders and stole all the bitcoins.
- gwern 9y agoOne of the more mysterious things to come out of the Silk Road trial was that apparently Ross Ulbricht's account on Mtgox was 'hacked' and all the money stolen: https://www.reddit.com/r/DarkNetMarkets/comments/2tgymg/silk_goxed_how_dpr_used_mtgox_for_hedging_lost_big/ https://www.reddit.com/r/DarkNetMarkets/comments/2tgymg/silk... (He seemed to have had an account as part of SR1's hedging system.) Ulbricht, in his journal, thought it was seized by LE. Given the corruption around the case, and the possibility one or more corrupt LE agents are still at large, one wonders.
- ctz 9y agoWell, it could be the CIA. It could also be a bunch of terrible quality PHP running a financial service worth $450m.
- tr1ck5t3r 9y agoNo, he was using a football card trading platform modified to trade bitcoins which is alot less secure than most modern trading platforms. A link to the trading software after the hack was posted to a website called HousePriceCrash.co.uk for others to download.
- Temasik 9y agoanyone reading this should atleast take a look at iota, it's trying to solve blockchain's problem 1) centralized mining 2) the fees 3) scalability as tx increase 4) fat protocol iota doesn't have any of the above,it doesn't even have/use a blockchain www.iota.org
- sctb 9y agoIt's OK to mention stuff you're working on when it's relevant to the discussion, but you've been really overdoing it.
- swalsh 9y agoThe collapse of Mt. Gox was probably one of the best things to happen to Bitcoin.
- wizu 9y agoCould you elaborate? I'm really curious as to how!
- ccrush 9y agoOne could see it as an improvement of its commercial image when the largest exchange for the currency is hosted by a company dedicated to its secure exchange between parties via a system specifically coded for this purpose rather than a website backed by a shitty PHP script written for trading Magic: The Gathering cards by a fat French forever alone neck beard nerd virgin.
- jamiek88 9y agoKarpeles is incompetent and had a lot to answer for but I don’t think alluding to his sexual prowess or lack thereof is appropriate for HN. His neckbeard bears no significance to his security practices.
- nashashmi 9y agoIt was once the defacto exchange and wallet manager for bitcoin. I believe the statistics were that 90% of all transactions happened on the exchange. In fact, once they pulled the server for maintenance, the price of bitcoin plummeted. After it's collapse, a void was created for other exchanges to rise. A more balanced system ensued.
- fpgaminer 9y agoCouple things. One of the points of Bitcoin is that you become your own bank. But a lot of people ignored that and stored their coins on exchanges like Mt. Gox. The loss of funds to the collapse of Mt. Gox is a constant reminder not to do that. (NOTE: Yes, storing coins on your own was certainly not easy. It's a tad easier now with hardware wallets, but there's a lot more to do. But everyone managing their own funds with their own private keys is still ultimately goal of Bitcoin.) The collapse of Mt. Gox was one of the first, huge financial scandals in the Bitcoin ecosystem. It has made users more critical of trading platforms, which is always a good thing. It was also a nice shock to the system for naive investors who weren't aware of the true risks of investing in volatile assets like Bitcoin. Of course, Mt. Gox was also incredibly destructive to the Bitcoin ecosystem. So it's a bit like arguing that the Great Depression was the greatest thing to happen to the American economy.
- fpgaminer 9y agoThis article feels wanting. It doesn't cover much of any details about Mt. Gox and instead goes off on tangents about the former CEO's personal life, and the cryptocurrency ecosystem... I'll see if I can make up the gap. I'm no expert on the Mt. Gox story; it's extensive and full of speculation, but here's what I remember. Mt. Gox has suffered multiple bugs, hacks, etc during its existence. But the two significant events occurred in 2011 and 2014. 2011, the price peaked at something like $30 and quickly collapsed to $0.01. As explained by Mt. Gox, this was due to a hacker breaking into the exchange and stealing a large amount of funds. The drop to $0.01 was caused by the hacker selling a bunch of those coins on the exchange, eating through all the orders on the book. Fast forward; February 2014 started off with Mt. Gox shockingly halting all Bitcoin withdrawals. This was followed through the month with a number of disconcerting moves, from Karpeles leaving the Bitcoin Foundation to the closing of Twitter accounts. Little information was released by Mt. Gox officially during this time. At the end of February Mt. Gox filled for bankruptcy, claiming they had lost 750,000 Bitcoins (worth nearly $2 billion at today's valuation). Mt. Gox announced that they believed the coins were most likely stolen by hackers. So what's the story here? Through the events of 2014 Mt. Gox was not the least bit transparent. Halting Bitcoin withdrawals, and then a month later announcing bankruptcy and that coins had been stolen without any information in between was very disconcerting. In addition, prior to 2014, they had halted USD withdrawals and had run into other banking difficulties in the interim. The most damning evidence was released by a Tokyo security company WizSec, which concluded that "most or all of the missing bitcoins were stolen straight out of the Mt. Gox hot wallet over time, beginning in late 2011." If true, it meant Mt. Gox had been losing money for years. People reasonably didn't believe Mt. Gox could not have known about this. The prevailing theory now is that at some point, likely early 2013 or sooner, Karpeles found out they had been bleeding coins. Karpeles would have then been faced with having to announce the loss of a significant percentage of customer funds. It would be the death knell for Mt. Gox. Karpeles would lose his business, and customers would suffer. Was there an alternative? Maybe. What if, instead, they kept quiet. And what if they used their dominate position in the Bitcoin trading ecosystem to manipulate the market? Slowly, casually manipulate the price of Bitcoin upward. A rising price would compel investors to invest more, and sell less. That would mean more deposits coming into Mt. Gox, and less withdrawals going out. Basically, Mt. Gox would be operating with fractional reserves. As long as there wasn't a "run on the bank", they could continue to operate without anyone knowing what happened. In fact, if they could keep this going long enough, the lost funds could be made up slowly using fees and personal funds. So the prevailing theory is that Karpeles realized and executed this plan. Exactly when this would have occurred is up for speculation. Obviously, things didn't go as planned. June 2013, Mt. Gox had to suspend USD withdrawals. This had a really nasty side effect. Basically, to get your money out of the exchange now, you had to buy BTC and then withdrawal those coins to sell on a different exchange with functioning USD withdrawals. The result is a rapidly rising price, because of increased buy pressure. The end of 2013 sees the price of Bitcoin rapidly rise 500%. As with most rapid explosions in price, we saw a correction shortly after. By the end of January 2014 the price had fallen ~30%. If our suspicions are true regarding Mt. Gox, this would be fatal. Lots of investors making 500% returns in the span of two months, and then seeing a market correction downward? You bet they're gonna sell and pull out. A run on the bank. So February 2014, they had to halt BTC withdrawals, and the sham was up. The rest is history in the making. This court case will be terribly interesting. Will any of this theory be proven true? Other theories abound. Some argue the coins were merely stolen by an insider, or a company Mt. Gox was working with. Some argue they were stolen by Karpeles himself. Hopefully some kind of compelling evidence one way or the other will come to light during the course of the trial. Regardless, this case is making history for Bitcoin exchanges. It will certainly be a story that puts fiction to shame.
- TaylorGood 9y agoI'm not convinced he doesn't still have the coins.