15 ms·

Mt. Gox Finds 200,000 Missing Bitcoins

278 points by byoogle 13y ago

heinrich5991 13y ago
Can someone post a full version of the article? I only get the first two lines...
- davewasthere 13y ago
  Be nice to not have paywall posts on HN... But then again, apparently most people just read the headlines. :)
- bobbles 13y ago
  Best I've seen so far is google translation of this site: http://headlines.yahoo.co.jp/hl?a=20140321-00000038-yom-sci http://headlines.yahoo.co.jp/hl?a=20140321-00000038-yom-sci A leading trading site management company "bit coin (BTC = Bitcoin)" virtual currency on the Internet, the 20th, I had described the company has lost the bankruptcy in February "Mount Ngoc, Inc." The (Tokyo) Of the approximately 850,000 BTC, has announced about 200,000 BTC has left. 　 According to the lawyers of the company, the 7th of this month, the company was using previously in June 2011, and found the place of examination of the storage location on the net called "Wallet" and (wallet). 　 February 28, when it is filed for Civil Rehabilitation Law in Tokyo District Court, the company describes a total of about 850,000 BTC corresponding to almost all to be held has been lost. Edit: antonius has posted the content above: https://news.ycombinator.com/item?id=7440359 https://news.ycombinator.com/item?id=7440359
- byoogle 13y ago
  To get around the paywall, you can: https://www.google.com/search?q=Mt.+Gox+Finds+200%2C000+Missing+Bitcoins https://www.google.com/search?q=Mt.+Gox+Finds+200%2C000+Miss...
- evv 13y ago
  The easiest way to get around this is by googling the headline and clicking on the article from the google results. It almost always works for some reason.. my best guess is that sites allows these crawled links to see the full content because doing otherwise would harm their SEO.
  - hrjet 13y ago
    Not only that, people who use this tactic are helping improve the pay-walled article's page ranking, because most search engines will record that click and account it as a good search result. So from publisher's perspective, they are getting more SEO by pay-walling!
antonius 13y ago
In case paywall is blocking the text: TOKYO—Major bitcoin exchange Mt. Gox announced Thursday it had discovered 200,000 missing bitcoins in a wallet that the company no longer uses, reducing the total number of bitcoins still missing to 650,000 from 850,000. "We believed there were no bitcoins left in old wallets, but found 199,999.99 bitcoins on March 7," Mt. Gox chief executive Mark Karpelès said in a document released Thursday. Mt. Gox said it reported the discovery of the bitcoins to its lawyers on March 8, and moved the discovered bitcoins to offline storage between the March 14 and 15. The exchange filed for court protection on Feb. 28. At the time, Mr Karpeles told a news conference it had lost 750,000 bitcoins owned by users and 100,000 held by the company, citing the possibility the bitcoins had been withdrawn without authorization. The exchange was shut down Feb. 25.
- DSMan195276 13y ago
  Thanks for that.
- Springtime 13y ago
  Thanks. There really should be some rule on HN against posting links that hide the text, although I've heard it's not obvious to those who post the links as apparently coming from Google it displays the full article.
  - bunderbunder 13y ago
    Seems like if it were irritating enough to people, lack of upvoting might naturally take care of the issue.
    - foldor 13y ago
      The problem is most people upvote based on the title without reading the article.
      - bunderbunder 13y ago
        Yeah, exactly. Meaning it's probably not irritating at all to a lot of people. Not my ideal situation, but HN is gonna be HN.
sillysaurus3 13y ago
It seems unlikely that Karpeles randomly stumbled across 200,000 missing bitcoins. It seems at least plausible that he attempted to steal them and is now backpedaling since people aren't buying his malleability story. This is the first ray of hope regarding customers recovering any of their missing bitcoin though.
- Blahah 13y ago
  > It seems at least plausible that he attempted to steal them and is now backpedaling since people aren't buying his malleability story. Or that they lost the keys to some wallets and have managed to crack one.
  - sillysaurus3 13y ago
    If that were the case, then there's no reason to frame it as if they thought there weren't any bitcoins left in unused company wallets. They could just tell the truth.
    - Blahah 13y ago
      That's true, it would actually make them seem less cretinous if they said they had cracked a lost key. I guess the fact that they have to have been so staggeringly incompetent to have 200,000 bitcoins they didn't even know about makes me feel like there must be some other explanation than the one they are offering. Attempted theft is up there.
      - erichurkman 13y ago
        Wouldn't someone publishing that keys can be cracked in realistic timeframes deal a blow to the currency itself? Sure, it would have required tons of computing power, but they still would have cracked the key in several weeks' time.
        garrettgrimsley 13y ago
roberjo 13y ago
Just like finding a $20 in your laundry!
- garrettgrimsley 13y ago
  Mark: Honey, I was cleaning out the couch and found 117,000,000 USD! One a serious note: How do they not have a program that monitors all wallets they control? This seems beyond ridicule.
  - DrStalker 13y ago
    Or even a text file with the all their public keys listed, so they could verify where their money was without giving access to move it. I take better care of my dogecoins, and they are only worth a few hundred at best.
    - garrettgrimsley 13y ago
      Yes, that would be the safest option! This level of incompetence is astounding.
Scorponok 13y ago
Every new story about this makes Mt. Gox look worse. Now they're not even competent enough to steal them or have them stolen, they just lost a hundred million dollars?
- Aqueous 13y ago
  "You know, I think you're missing the point, man. They found them again, man."
- SG- 13y ago
  they've always looked incompetent, slightly more than people who kept their money with them before this entire thing happened.
lkrubner 13y ago
I am borderline speechless in the face of the incomprehensible carelessness. The lack of records is amazing. The lack of accounting is amazing. The lack of professional standards is amazing. The lack of common sense is amazing. If you'll excuse me, I have to go to the bank. I just realized that I left a million dollars in the pockets of the jeans that I just washed. I suppose I should dry them out and deposit them, along with the $100,000 I just found fallen between then cushions of my couch.
- pushedx 13y ago
  This seems like complete BS to me. I wonder how it's going to show up in the blockchain. I suspect Kerpeles has somehow shuffled a few 10,000 BTCs to a private account, considering the lack of records. I lost over $5000 USD (in fiat) on Mt. Gox and I want my money. Seeing stories like this just raise more questions that I wish didn't have to be asked.
  - oznathan 13y ago
    Check the bitcoin reddit. Everybody knows about that 200k btc for weeks. There is evidence they have about 300k more.
    - nwh 13y ago
      Remember that Reddit is frequently completely wrong with it's guesswork, only a fool would rely on that communities information when preparing for a witch hunt.
      - sillysaurus3 13y ago
        For what it's worth (which isn't necessarily very much, since I've been very wrong about bitcoin before) I've been monitoring the situation pretty closely, and the Redditors have been doing a thorough and fairly scientific job of concluding what is or isn't possible. There are some crazies in the threads of course, but they get downvoted or called out on their speculation. Since there's no concrete evidence, what rises to the top of the threads are statements like "Here's what we know. Here are possible theories as to why these facts are present." It feels very much like the opposite of a witch hunt.
downandout 13y ago
"Oh there's that $116 million I was looking for!". I suppose that given the level of incompetence and/or malfeasance at Mt.Gox, this shouldn't be that suprising. What is actually more surprising is that they ever became the primary BTC exchange in the first place. I first wrote them off as a scam years ago when I read a Bitcointalk thread wherein Gox tried to explain away their aggressive "tainted" coin confiscation policy. They essentially explained that they were confiscating all coins that they deemed to be tied to theft or illegal activity at any point in the blockchain - in their sole discretion. Yet somehow, with that and many more very public red flags, they just kept growing.
dholowiski 13y ago
Sadly, I would have to pay $1 a week for 12 weeks to read the story. I think it would probably be old news by then.
- ghshephard 13y ago
  WSJ stories are 100% of the time available by doing a google search for the headline.
  - cpncrunch 13y ago
    It's ridiculous that we should have to do that.
    - deleted 13y ago
      [deleted]
    - eropple 13y ago
      If you've got a better way for them to keep the lights on, there are wheelbarrows of money waiting for you.
      - gargarplex 13y ago
        What about the Netflix/Spotify model? Pay a monthly subscription for "premium news" and then let the content providers divvy up the monies based on pageviews.
        nknighthb 13y ago
        That would simply accelerate existing trends. All the money would go toward pumping out more celebrity gossip because that's what gets eyeballs. There would be no remaining incentive to engage in actual journalism. Profit-based news is irretrievably broken.
        cpncrunch 13y ago
oznathan 13y ago
Their official announcement is even more ridiculous. https://www.mtgox.com/img/pdf/20140320-btc-announce.pdf https://www.mtgox.com/img/pdf/20140320-btc-announce.pdf The have more coins and there is evidence for that in the blockchain. Many people know about that for weeks. After they figured people were on to them they released this lie. Nobody just forgets about 200,000 btc.
mrb 13y ago
FWIW, no paywall: https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0CC0QqQIwAA&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB10001424052702303802104579452062699281046.html&ei=iLArU630DpbmoASEtQI&usg=AFQjCNE_4tYG_o0DALZLIwnVrkpq_3ewoQ&sig2=fITbQe8Rn1zsQLeWxMSlwg&bvm=bv.63316862,d.cGU https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&c...
FatalLogic 13y ago
Although it's taken Mt. Gox two weeks to report this, amazingly, it was public knowledge as soon as it happened on March 7/8, because the movement of over $100,000,000 was instantly visible on the public Blockchain. Reddit noticed it immediately: http://redd.it/1zshct http://redd.it/1zshct Most of it was in this transaction of 180,000 bitcoins - https://blockchain.info/tx/4ee89f7cf824a85ad5f11d52604ffdebe9f01302bcea8ddec0af450f9185ddf1 https://blockchain.info/tx/4ee89f7cf824a85ad5f11d52604ffdebe... From that evidence alone, it wasn't clear who had control of the money. Mt. Gox, or a hacker, but the Mt.Gox API was still up, and the API confirmed that this was a Mt.Gox-controlled transaction. Reddit saw that, too: http://redd.it/1zswul http://redd.it/1zswul
- deleted 13y ago
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coreymgilmore 13y ago
This story keeps getting more ridiculous. First, Gox loses a huge amount of BTC...now all of a sudden they have found some of it? I assume this wasn't stolen and isn't already in the blockchain somehow. I do not believe that Gox was this blind to the problem in their systems. Something seems very, very fishy about this.
doktrin 13y ago
This might as well be a comedy sketch. Can someone explain how this is even remotely possible?
- logicchains 13y ago
  Truth is sometimes funnier than fiction.
  - deleted 13y ago
    [deleted]
gumballhead 13y ago
That lends some more plausibility to this theory: http://chrispacia.wordpress.com/2014/02/28/this-is-what-most-likely-happened-to-mtgox/ http://chrispacia.wordpress.com/2014/02/28/this-is-what-most...
- keypusher 13y ago
  This is the most plausible theory I have heard yet. tl;dr: Wallets were in cold storage at Japanese bank, US govt seized them while investigating Silk Road.
- ztnewman 13y ago
  How could they seize a foreign exchanges assets held in a foreign bank?
dperfect 13y ago
Many people are expressing surprise by the events that have unfolded here with Mark Karpeles and Mt. Gox, but I'm not surprised in the least. I've known several web developer "enthusiasts" over the years who know just enough PHP (usually it's PHP, but this applies to other technologies as well) to build things that mostly work and feel confident that they can solve anything with "a little PHP." Working mostly alone, these people prefer to spend their time building constantly, and little time learning or keeping up with current best practices (or in this case, cryptography). There are a large number of companies (many of them doing very well) built by people like this, and even when they bring on other developers, no one has the courage to tell the original developer (who is often CEO) that their code sucks and needs to be scrapped completely. They keep throwing more crap onto the pile because the machine "works" and customers are demanding new features. The original (incompetent) developer feels a sense of pride for his or her work, and nothing short of total failure (in this case, spectacular failure) will convince them that their work is anything less than genius. It's unfortunate that some companies thrive in situations like this (it sets them up for failure), but it happens all the time. I don't know Mark personally, but from everything I've read from him over the years, he seems to fit the description above. It doesn't necessarily mean he's a terrible person or a thief (he could be that as well, but I have no knowledge to prove one way or the other). It just means he got in over his head, and kept the site running on deeply flawed assumptions and implementations (e.g., no standard accounting, little understanding of security, etc). It's a shame that people kept coming back to Mt. Gox and entrusted the site with their money, even after those behind Mt. Gox proved themselves to be incompetent over and over again. Is it sad? Yes. Is it surprising? The only surprising thing is how people kept going back. As for the missing and suddenly reappearing coins, I honestly think they just had absolutely no idea where everything was. I've heard people describe Mt. Gox's infrastructure as a hodgepodge of random scripts and servers duct-taped together, and it's easy to imagine a dozen hard drives filled with an unorganized mess of Bitcoin wallets, private keys, database dumps, etc. I believe they're honestly trying to pick up the pieces, but the pieces are scattered everywhere.
- tomasien 13y ago
  We're definitely in that position, except we know our stuff is shit and we're rebuilding it and hiring furiously to rebuild it. 99% percent of life is knowing the difference isn't it?
mantrax 13y ago
I actually envy Mark Karpeles' ability to not give a fuck throughout this whole situation. In fact, I think it's some sort of super power.
- conroe64 13y ago
  It's called Xanax
- saalweachter 13y ago
  Hyperbole and a Half has a interesting monologue on this sort of superpower: http://hyperboleandahalf.blogspot.com/2013/05/depression-part-two.html http://hyperboleandahalf.blogspot.com/2013/05/depression-par...
salgernon 13y ago
Since they are in receivership, what will happen when the adjudicator liquidates th to pay off debts? What will happen to the exchange rate when these get dumped on the market?
- technotony 13y ago
  It's a good question, but they would be obligated to seek the best return they can which means recognizing that they can't just sell them on the open market. It's unclear to me whether the BTC liabilities or the hard currency liabilities rank higher (my guess the hard currency) in which case maybe they can just sell to a big investor like the guy who offered to buy the FBI's coins: http://www.businessinsider.com/falcon-global-capital-offers-to-buy-the-fbis-bitcoins-2014-2 http://www.businessinsider.com/falcon-global-capital-offers-...
elwell 13y ago
Current market value of about $116M. Wow.
fuddle 13y ago
MtGox: We lost all the coins! We have no idea were they are... Random person: Have you tried looking in your wallet? MtGox: Found it!
- FireBeyond 13y ago
  Kinda: MtGox: We lost all the coins! What must have happened is a very complex sequence of events where people were able to take money from us without noticing. We complained to the wallet manufacturer. But it's very complex, and umm, we're sorry, and umm, bye. Random person: Have you tried looking in your wallet? MtGox: Found it!
jeffdavis 13y ago
Imagine telling this story to someone that time travelled from the time Magic: The Gathering first appeared in the mid-nineties. MtGox: "Funny story ... internet ... website to trade Magic cards ... digital currency ... so that's how we found the $100,000,000 that we accidentally misplaced. Still looking for the other $300,000,000 or so -- must be around here someplace."
- dTal 13y ago
  Apparently MtGox, despite the name, was never used for anything other than bitcoin. It was just a domain the owner had.
  - shagie 13y ago
    The wayback machine begs to differ: http://web.archive.org/web/20070525044536/http://mtgox.com/gwt/mtgox.php http://web.archive.org/web/20070525044536/http://mtgox.com/g... -- now, if the codebase was the same as it was when that page was hosted and today, I can't say.
    - dTal 13y ago
      That's just a holding page, not a functional site.
  - saalweachter 13y ago
    Sidebar: I know the motivations of people who post in every single goddamn thread that MtGox stands for "Magic the Gathering: Online eXchange" (ie, "tee-hee! giggle giggle! laugh!"). However, there is also someone in every thread who replies to this assertion to say that they never actually traded Magic cards. My question is, what is your motivation for this? I could think of three off the top of my head: a. Emotional need to defend MtGox b. Intellectual need to correct misinformation c. Refocusing; it's an ad hominem and detracts from the real problems with MtGox
    - dTal 13y ago
      I appreciate the directness of the question. Can't speak for others, but in my case, it's (b) - I was one of the gigglers until I read one of the rebuttals you mention. Just trying to help the meme flow.
zobzu 13y ago
loginwalled article.
- sdfjkl 13y ago
  Same. Google cache: https://webcache.googleusercontent.com/search?q=cache:o7jSx_DEvKgJ:online.wsj.com/news/articles/SB10001424052702303802104579452062699281046+&cd=5&hl=en&ct=clnk https://webcache.googleusercontent.com/search?q=cache:o7jSx_...
deleted 13y ago
[deleted]
anigbrowl 13y ago
Never mind that, where do I get one of those big sofas?
aceperry 13y ago
Great jokes, keep them coming! :-)
cjunky 13y ago
Anyone that believes they "simply found" those coins should PM me about a bridge I have for sale.
davyjones 13y ago
All of us who look down upon Accountants take a hard look in the mirror (I am one of them who used to). Most of us are like..."meh...its just +'s and -'s with some tax component here and there, how hard can it be. I will get to it when I get to it." Turns out all those tough exams and practices are in place to mitigate this exact scenario. The above assuming no malicious intent on part of MtGox and the recent revelation was pure stupidity.
- mantrax 13y ago
  Actually there's no solid evidence how much help an accountant is with regards to safely using Bitcoins. Would an accountant know enough to safely store "wallets", to monitor "blockchains". Is this in their training? No. You can have perfect accounting and still turn out you lost the wallets. Bitcoin's problem is that there's no other asset in human history so easily misplaced, lost, or stolen. A bunch of numbers on a bunch of vulnerable computers.
NicoJuicy 13y ago
Old trick, giving customers false hope: http://cryptopic.tumblr.com/post/80210959301/cryptopic-003 http://cryptopic.tumblr.com/post/80210959301/cryptopic-003
riffraff 13y ago
I would suggest people to try to avoid the "regulation = 1% bailouts" equation. It would be more useful to think of regulation for bitcoin actors more in the sense of required car insurance, or not being allowed to sell food with poisonous chemicals in it. There can be a certain amount of regulation that helps avoiding incompetent or fraudolent actors even without a money-emitting FED or a socialize-losses-privatize-gains government.
jokoon 13y ago
bitcoin advertising and promoting operation: success !
wellboy 13y ago
This is what happens when you only have contractors in your company and no one with equity. No one cares about the business and the founder ends up with 87% equity of nothing.
jheriko 13y ago
any versions of this article that i don't have to pay for?
pilif 13y ago
Being limited to reading the first paragraph of the linked article (paywall) and the other comments here, I can't resist to point out for those Pratchett fans among us, that this feels like the stunt Moist von Lipwig pulled in "Going Postal" in order to pay for the reconstruction of the post office. While I feel really bad for those who lost money with MtGox, there were so many signs pointing at such an outcome: Unexperienced programmer asking all the wrong questions, background in "Magic the Gathering" card trading, zero background in banking or security. None of that sounded particularly trustworthy and look where it went.
matt__rose 13y ago
Let me guess, they were under the couch cushions, with some Lego pieces and stale Cheetos.
easy_rider 13y ago
These amounts are lost all the time in governments in conventional currency..
cl8ton 13y ago
In other shocking news it was also revealed by MtGox the first 100k BTC in the old wallet were actually the ones owned by MtGox and were thought stolen.
ebbv 13y ago
I can't help laughing at all this shit. I was saying for years people shouldn't be trusting their money to Mt Gox, and constantly got mocked for it. Common sense wins again.
llamataboot 13y ago
Hold on. They just LOST over 100 million dollars? Give me back my 5 bitcoins now!
Siecje 13y ago
How were you able to trigger the double spend on mtgox anyways?

278 points by byoogle 13y ago

heinrich5991 13y ago

Can someone post a full version of the article? I only get the first two lines...

davewasthere 13y ago
Be nice to not have paywall posts on HN... But then again, apparently most people just read the headlines. :)
bobbles 13y ago
Best I've seen so far is google translation of this site: http://headlines.yahoo.co.jp/hl?a=20140321-00000038-yom-sci http://headlines.yahoo.co.jp/hl?a=20140321-00000038-yom-sci A leading trading site management company "bit coin (BTC = Bitcoin)" virtual currency on the Internet, the 20th, I had described the company has lost the bankruptcy in February "Mount Ngoc, Inc." The (Tokyo) Of the approximately 850,000 BTC, has announced about 200,000 BTC has left. 　 According to the lawyers of the company, the 7th of this month, the company was using previously in June 2011, and found the place of examination of the storage location on the net called "Wallet" and (wallet). 　 February 28, when it is filed for Civil Rehabilitation Law in Tokyo District Court, the company describes a total of about 850,000 BTC corresponding to almost all to be held has been lost. Edit: antonius has posted the content above: https://news.ycombinator.com/item?id=7440359 https://news.ycombinator.com/item?id=7440359
byoogle 13y ago
To get around the paywall, you can: https://www.google.com/search?q=Mt.+Gox+Finds+200%2C000+Missing+Bitcoins https://www.google.com/search?q=Mt.+Gox+Finds+200%2C000+Miss...
evv 13y ago
The easiest way to get around this is by googling the headline and clicking on the article from the google results. It almost always works for some reason.. my best guess is that sites allows these crawled links to see the full content because doing otherwise would harm their SEO.
- hrjet 13y ago
  Not only that, people who use this tactic are helping improve the pay-walled article's page ranking, because most search engines will record that click and account it as a good search result. So from publisher's perspective, they are getting more SEO by pay-walling!

antonius 13y ago

In case paywall is blocking the text: TOKYO—Major bitcoin exchange Mt. Gox announced Thursday it had discovered 200,000 missing bitcoins in a wallet that the company no longer uses, reducing the total number of bitcoins still missing to 650,000 from 850,000. "We believed there were no bitcoins left in old wallets, but found 199,999.99 bitcoins on March 7," Mt. Gox chief executive Mark Karpelès said in a document released Thursday. Mt. Gox said it reported the discovery of the bitcoins to its lawyers on March 8, and moved the discovered bitcoins to offline storage between the March 14 and 15. The exchange filed for court protection on Feb. 28. At the time, Mr Karpeles told a news conference it had lost 750,000 bitcoins owned by users and 100,000 held by the company, citing the possibility the bitcoins had been withdrawn without authorization. The exchange was shut down Feb. 25.

DSMan195276 13y ago
Thanks for that.
Springtime 13y ago
Thanks. There really should be some rule on HN against posting links that hide the text, although I've heard it's not obvious to those who post the links as apparently coming from Google it displays the full article.
- bunderbunder 13y ago
  Seems like if it were irritating enough to people, lack of upvoting might naturally take care of the issue.
  - foldor 13y ago
    The problem is most people upvote based on the title without reading the article.
    - bunderbunder 13y ago
      Yeah, exactly. Meaning it's probably not irritating at all to a lot of people. Not my ideal situation, but HN is gonna be HN.

sillysaurus3 13y ago

It seems unlikely that Karpeles randomly stumbled across 200,000 missing bitcoins. It seems at least plausible that he attempted to steal them and is now backpedaling since people aren't buying his malleability story. This is the first ray of hope regarding customers recovering any of their missing bitcoin though.

Blahah 13y ago
> It seems at least plausible that he attempted to steal them and is now backpedaling since people aren't buying his malleability story. Or that they lost the keys to some wallets and have managed to crack one.
- sillysaurus3 13y ago
  If that were the case, then there's no reason to frame it as if they thought there weren't any bitcoins left in unused company wallets. They could just tell the truth.
  - Blahah 13y ago
    That's true, it would actually make them seem less cretinous if they said they had cracked a lost key. I guess the fact that they have to have been so staggeringly incompetent to have 200,000 bitcoins they didn't even know about makes me feel like there must be some other explanation than the one they are offering. Attempted theft is up there.
    - erichurkman 13y ago
      Wouldn't someone publishing that keys can be cracked in realistic timeframes deal a blow to the currency itself? Sure, it would have required tons of computing power, but they still would have cracked the key in several weeks' time.
      - garrettgrimsley 13y ago

roberjo 13y ago

Just like finding a $20 in your laundry!

garrettgrimsley 13y ago
Mark: Honey, I was cleaning out the couch and found 117,000,000 USD! One a serious note: How do they not have a program that monitors all wallets they control? This seems beyond ridicule.
- DrStalker 13y ago
  Or even a text file with the all their public keys listed, so they could verify where their money was without giving access to move it. I take better care of my dogecoins, and they are only worth a few hundred at best.
  - garrettgrimsley 13y ago
    Yes, that would be the safest option! This level of incompetence is astounding.

Scorponok 13y ago

Every new story about this makes Mt. Gox look worse. Now they're not even competent enough to steal them or have them stolen, they just lost a hundred million dollars?

Aqueous 13y ago
"You know, I think you're missing the point, man. They found them again, man."
SG- 13y ago
they've always looked incompetent, slightly more than people who kept their money with them before this entire thing happened.

lkrubner 13y ago

I am borderline speechless in the face of the incomprehensible carelessness. The lack of records is amazing. The lack of accounting is amazing. The lack of professional standards is amazing. The lack of common sense is amazing. If you'll excuse me, I have to go to the bank. I just realized that I left a million dollars in the pockets of the jeans that I just washed. I suppose I should dry them out and deposit them, along with the $100,000 I just found fallen between then cushions of my couch.

pushedx 13y ago
This seems like complete BS to me. I wonder how it's going to show up in the blockchain. I suspect Kerpeles has somehow shuffled a few 10,000 BTCs to a private account, considering the lack of records. I lost over $5000 USD (in fiat) on Mt. Gox and I want my money. Seeing stories like this just raise more questions that I wish didn't have to be asked.
- oznathan 13y ago
  Check the bitcoin reddit. Everybody knows about that 200k btc for weeks. There is evidence they have about 300k more.
  - nwh 13y ago
    Remember that Reddit is frequently completely wrong with it's guesswork, only a fool would rely on that communities information when preparing for a witch hunt.
    - sillysaurus3 13y ago
      For what it's worth (which isn't necessarily very much, since I've been very wrong about bitcoin before) I've been monitoring the situation pretty closely, and the Redditors have been doing a thorough and fairly scientific job of concluding what is or isn't possible. There are some crazies in the threads of course, but they get downvoted or called out on their speculation. Since there's no concrete evidence, what rises to the top of the threads are statements like "Here's what we know. Here are possible theories as to why these facts are present." It feels very much like the opposite of a witch hunt.

downandout 13y ago

"Oh there's that $116 million I was looking for!". I suppose that given the level of incompetence and/or malfeasance at Mt.Gox, this shouldn't be that suprising. What is actually more surprising is that they ever became the primary BTC exchange in the first place. I first wrote them off as a scam years ago when I read a Bitcointalk thread wherein Gox tried to explain away their aggressive "tainted" coin confiscation policy. They essentially explained that they were confiscating all coins that they deemed to be tied to theft or illegal activity at any point in the blockchain - in their sole discretion. Yet somehow, with that and many more very public red flags, they just kept growing.

dholowiski 13y ago

Sadly, I would have to pay $1 a week for 12 weeks to read the story. I think it would probably be old news by then.

ghshephard 13y ago
WSJ stories are 100% of the time available by doing a google search for the headline.
- cpncrunch 13y ago
  It's ridiculous that we should have to do that.
  - deleted 13y ago
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  - eropple 13y ago
    If you've got a better way for them to keep the lights on, there are wheelbarrows of money waiting for you.
    - gargarplex 13y ago
      What about the Netflix/Spotify model? Pay a monthly subscription for "premium news" and then let the content providers divvy up the monies based on pageviews.
      - nknighthb 13y ago
        That would simply accelerate existing trends. All the money would go toward pumping out more celebrity gossip because that's what gets eyeballs. There would be no remaining incentive to engage in actual journalism. Profit-based news is irretrievably broken.
        cpncrunch 13y ago

oznathan 13y ago

Their official announcement is even more ridiculous. https://www.mtgox.com/img/pdf/20140320-btc-announce.pdf https://www.mtgox.com/img/pdf/20140320-btc-announce.pdf The have more coins and there is evidence for that in the blockchain. Many people know about that for weeks. After they figured people were on to them they released this lie. Nobody just forgets about 200,000 btc.

mrb 13y ago

FWIW, no paywall: https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0CC0QqQIwAA&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB10001424052702303802104579452062699281046.html&ei=iLArU630DpbmoASEtQI&usg=AFQjCNE_4tYG_o0DALZLIwnVrkpq_3ewoQ&sig2=fITbQe8Rn1zsQLeWxMSlwg&bvm=bv.63316862,d.cGU https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&c...

FatalLogic 13y ago

Although it's taken Mt. Gox two weeks to report this, amazingly, it was public knowledge as soon as it happened on March 7/8, because the movement of over $100,000,000 was instantly visible on the public Blockchain. Reddit noticed it immediately: http://redd.it/1zshct http://redd.it/1zshct Most of it was in this transaction of 180,000 bitcoins - https://blockchain.info/tx/4ee89f7cf824a85ad5f11d52604ffdebe9f01302bcea8ddec0af450f9185ddf1 https://blockchain.info/tx/4ee89f7cf824a85ad5f11d52604ffdebe... From that evidence alone, it wasn't clear who had control of the money. Mt. Gox, or a hacker, but the Mt.Gox API was still up, and the API confirmed that this was a Mt.Gox-controlled transaction. Reddit saw that, too: http://redd.it/1zswul http://redd.it/1zswul

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coreymgilmore 13y ago

This story keeps getting more ridiculous. First, Gox loses a huge amount of BTC...now all of a sudden they have found some of it? I assume this wasn't stolen and isn't already in the blockchain somehow. I do not believe that Gox was this blind to the problem in their systems. Something seems very, very fishy about this.

doktrin 13y ago

This might as well be a comedy sketch. Can someone explain how this is even remotely possible?

logicchains 13y ago
Truth is sometimes funnier than fiction.
- deleted 13y ago
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gumballhead 13y ago

That lends some more plausibility to this theory: http://chrispacia.wordpress.com/2014/02/28/this-is-what-most-likely-happened-to-mtgox/ http://chrispacia.wordpress.com/2014/02/28/this-is-what-most...

keypusher 13y ago
This is the most plausible theory I have heard yet. tl;dr: Wallets were in cold storage at Japanese bank, US govt seized them while investigating Silk Road.
ztnewman 13y ago
How could they seize a foreign exchanges assets held in a foreign bank?

dperfect 13y ago

Many people are expressing surprise by the events that have unfolded here with Mark Karpeles and Mt. Gox, but I'm not surprised in the least. I've known several web developer "enthusiasts" over the years who know just enough PHP (usually it's PHP, but this applies to other technologies as well) to build things that mostly work and feel confident that they can solve anything with "a little PHP." Working mostly alone, these people prefer to spend their time building constantly, and little time learning or keeping up with current best practices (or in this case, cryptography). There are a large number of companies (many of them doing very well) built by people like this, and even when they bring on other developers, no one has the courage to tell the original developer (who is often CEO) that their code sucks and needs to be scrapped completely. They keep throwing more crap onto the pile because the machine "works" and customers are demanding new features. The original (incompetent) developer feels a sense of pride for his or her work, and nothing short of total failure (in this case, spectacular failure) will convince them that their work is anything less than genius. It's unfortunate that some companies thrive in situations like this (it sets them up for failure), but it happens all the time. I don't know Mark personally, but from everything I've read from him over the years, he seems to fit the description above. It doesn't necessarily mean he's a terrible person or a thief (he could be that as well, but I have no knowledge to prove one way or the other). It just means he got in over his head, and kept the site running on deeply flawed assumptions and implementations (e.g., no standard accounting, little understanding of security, etc). It's a shame that people kept coming back to Mt. Gox and entrusted the site with their money, even after those behind Mt. Gox proved themselves to be incompetent over and over again. Is it sad? Yes. Is it surprising? The only surprising thing is how people kept going back. As for the missing and suddenly reappearing coins, I honestly think they just had absolutely no idea where everything was. I've heard people describe Mt. Gox's infrastructure as a hodgepodge of random scripts and servers duct-taped together, and it's easy to imagine a dozen hard drives filled with an unorganized mess of Bitcoin wallets, private keys, database dumps, etc. I believe they're honestly trying to pick up the pieces, but the pieces are scattered everywhere.

tomasien 13y ago
We're definitely in that position, except we know our stuff is shit and we're rebuilding it and hiring furiously to rebuild it. 99% percent of life is knowing the difference isn't it?

mantrax 13y ago

I actually envy Mark Karpeles' ability to not give a fuck throughout this whole situation. In fact, I think it's some sort of super power.

conroe64 13y ago
It's called Xanax
saalweachter 13y ago
Hyperbole and a Half has a interesting monologue on this sort of superpower: http://hyperboleandahalf.blogspot.com/2013/05/depression-part-two.html http://hyperboleandahalf.blogspot.com/2013/05/depression-par...

salgernon 13y ago

Since they are in receivership, what will happen when the adjudicator liquidates th to pay off debts? What will happen to the exchange rate when these get dumped on the market?

technotony 13y ago
It's a good question, but they would be obligated to seek the best return they can which means recognizing that they can't just sell them on the open market. It's unclear to me whether the BTC liabilities or the hard currency liabilities rank higher (my guess the hard currency) in which case maybe they can just sell to a big investor like the guy who offered to buy the FBI's coins: http://www.businessinsider.com/falcon-global-capital-offers-to-buy-the-fbis-bitcoins-2014-2 http://www.businessinsider.com/falcon-global-capital-offers-...

elwell 13y ago

Current market value of about $116M. Wow.

fuddle 13y ago

MtGox: We lost all the coins! We have no idea were they are... Random person: Have you tried looking in your wallet? MtGox: Found it!

FireBeyond 13y ago
Kinda: MtGox: We lost all the coins! What must have happened is a very complex sequence of events where people were able to take money from us without noticing. We complained to the wallet manufacturer. But it's very complex, and umm, we're sorry, and umm, bye. Random person: Have you tried looking in your wallet? MtGox: Found it!

jeffdavis 13y ago

Imagine telling this story to someone that time travelled from the time Magic: The Gathering first appeared in the mid-nineties. MtGox: "Funny story ... internet ... website to trade Magic cards ... digital currency ... so that's how we found the $100,000,000 that we accidentally misplaced. Still looking for the other $300,000,000 or so -- must be around here someplace."

dTal 13y ago
Apparently MtGox, despite the name, was never used for anything other than bitcoin. It was just a domain the owner had.
- shagie 13y ago
  The wayback machine begs to differ: http://web.archive.org/web/20070525044536/http://mtgox.com/gwt/mtgox.php http://web.archive.org/web/20070525044536/http://mtgox.com/g... -- now, if the codebase was the same as it was when that page was hosted and today, I can't say.
  - dTal 13y ago
    That's just a holding page, not a functional site.
- saalweachter 13y ago
  Sidebar: I know the motivations of people who post in every single goddamn thread that MtGox stands for "Magic the Gathering: Online eXchange" (ie, "tee-hee! giggle giggle! laugh!"). However, there is also someone in every thread who replies to this assertion to say that they never actually traded Magic cards. My question is, what is your motivation for this? I could think of three off the top of my head: a. Emotional need to defend MtGox b. Intellectual need to correct misinformation c. Refocusing; it's an ad hominem and detracts from the real problems with MtGox
  - dTal 13y ago
    I appreciate the directness of the question. Can't speak for others, but in my case, it's (b) - I was one of the gigglers until I read one of the rebuttals you mention. Just trying to help the meme flow.

zobzu 13y ago

loginwalled article.

sdfjkl 13y ago
Same. Google cache: https://webcache.googleusercontent.com/search?q=cache:o7jSx_DEvKgJ:online.wsj.com/news/articles/SB10001424052702303802104579452062699281046+&cd=5&hl=en&ct=clnk https://webcache.googleusercontent.com/search?q=cache:o7jSx_...

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anigbrowl 13y ago

Never mind that, where do I get one of those big sofas?

aceperry 13y ago

Great jokes, keep them coming! :-)

cjunky 13y ago

Anyone that believes they "simply found" those coins should PM me about a bridge I have for sale.

davyjones 13y ago

All of us who look down upon Accountants take a hard look in the mirror (I am one of them who used to). Most of us are like..."meh...its just +'s and -'s with some tax component here and there, how hard can it be. I will get to it when I get to it." Turns out all those tough exams and practices are in place to mitigate this exact scenario. The above assuming no malicious intent on part of MtGox and the recent revelation was pure stupidity.

mantrax 13y ago
Actually there's no solid evidence how much help an accountant is with regards to safely using Bitcoins. Would an accountant know enough to safely store "wallets", to monitor "blockchains". Is this in their training? No. You can have perfect accounting and still turn out you lost the wallets. Bitcoin's problem is that there's no other asset in human history so easily misplaced, lost, or stolen. A bunch of numbers on a bunch of vulnerable computers.

NicoJuicy 13y ago

Old trick, giving customers false hope: http://cryptopic.tumblr.com/post/80210959301/cryptopic-003 http://cryptopic.tumblr.com/post/80210959301/cryptopic-003

riffraff 13y ago

I would suggest people to try to avoid the "regulation = 1% bailouts" equation. It would be more useful to think of regulation for bitcoin actors more in the sense of required car insurance, or not being allowed to sell food with poisonous chemicals in it. There can be a certain amount of regulation that helps avoiding incompetent or fraudolent actors even without a money-emitting FED or a socialize-losses-privatize-gains government.

jokoon 13y ago

bitcoin advertising and promoting operation: success !

wellboy 13y ago

This is what happens when you only have contractors in your company and no one with equity. No one cares about the business and the founder ends up with 87% equity of nothing.

jheriko 13y ago

any versions of this article that i don't have to pay for?

pilif 13y ago

Being limited to reading the first paragraph of the linked article (paywall) and the other comments here, I can't resist to point out for those Pratchett fans among us, that this feels like the stunt Moist von Lipwig pulled in "Going Postal" in order to pay for the reconstruction of the post office. While I feel really bad for those who lost money with MtGox, there were so many signs pointing at such an outcome: Unexperienced programmer asking all the wrong questions, background in "Magic the Gathering" card trading, zero background in banking or security. None of that sounded particularly trustworthy and look where it went.

matt__rose 13y ago

Let me guess, they were under the couch cushions, with some Lego pieces and stale Cheetos.

easy_rider 13y ago

These amounts are lost all the time in governments in conventional currency..

cl8ton 13y ago

In other shocking news it was also revealed by MtGox the first 100k BTC in the old wallet were actually the ones owned by MtGox and were thought stolen.

ebbv 13y ago

I can't help laughing at all this shit. I was saying for years people shouldn't be trusting their money to Mt Gox, and constantly got mocked for it. Common sense wins again.

llamataboot 13y ago

Hold on. They just LOST over 100 million dollars? Give me back my 5 bitcoins now!

Siecje 13y ago

How were you able to trigger the double spend on mtgox anyways?