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Bitcoin Crime Japan The Almighty Buck Technology

One Year Later, We're No Closer To Finding MtGox's Missing Millions 178

itwbennett writes: When Mt. Gox collapsed on Feb. 28, 2014, with liabilities of some ¥6.5 billion ($63.6 million), it said it was unable to account for some 850,000 bitcoins. Some 200,000 of them turned up in an old-format bitcoin wallet last March, bringing the tally of missing bitcoins to 650,000 (now worth about $180 million). In January, Japan's Yomiuri Shimbun newspaper, citing sources close to a Tokyo police probe of the MtGox collapse, reported that only 7,000 of the coins appear to have been taken by hackers, with the remainder stolen through a series of fraudulent transactions. But there's still no explanation of what happened to them, and no clear record of what happened on the exchange.
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One Year Later, We're No Closer To Finding MtGox's Missing Millions

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  • Obvious (Score:5, Funny)

    by nospam007 ( 722110 ) * on Wednesday March 04, 2015 @11:49AM (#49181005)

    Somebody buried it in Second Life.

    • by goombah99 ( 560566 ) on Wednesday March 04, 2015 @12:48PM (#49181491)

      Has no one noticed that the coins disappeared at almost the same time the FBI seized Silk Road's Assets?

    • by thebes ( 663586 )

      Wallet was hidden in a Mindcraft structure.

      • Wallet was hidden in a Mindcraft structure.

        This would actually be quite fasinating. Something like that would imply a virtual structure acting as a stenographic hiding place. Which leads to some interesting ideas. I know the whole, "They don't need your computer, they just need a wrench" idea applies here. But just imagine, a hostile entity (FBI, Robbers, ex-wife) are attempting to take your bitcoins. So, to make a plausible case that you don't have access to it, you generate a minecraft world. Then make various structures based on the bitcoin strin

        • by rioki ( 1328185 )

          Although I find your musing interesting... That is not the issue here. All the information for "finding" the missing Bitcoins is public; it is in the public ledger (block chain). You "wallet" is just a private key; granted you can hide that in Mincraft... But the "coins" are not "hidden". The problem with MtGox is that of all the transactions that MtGox did, which are the legitimate ones and the which the fraudulent ones.

  • Yes, and? (Score:4, Insightful)

    by Minwee ( 522556 ) <dcr@neverwhen.org> on Wednesday March 04, 2015 @11:51AM (#49181011) Homepage

    Wasn't that the whole point behind Bitcoin? That you could fleece investors without leaving a paper trail?

    • Re:Yes, and? (Score:5, Insightful)

      by Anonymous Coward on Wednesday March 04, 2015 @12:06PM (#49181123)

      Bitcoins are 100% traceable, but wallets are not, and it wouldn't take much shell game playing for enough plausible deniability to be entered into the system, especially if the coins are taken off the board for several years while the currency rises to quad or five digit values per dollar. (BitCoins are too much in use to ever really go down in value for any length of time now that China is in the game.)

      Say a wallet has a hundred coins in it, all "dirty". For example, the blockchain traces show they were all in an exchange's possession/wallet, then stolen. Realistically, the coins could be spent by them being put into wallets (perhaps even printed out on paper currency), and distributed/laundered via that method. A few years later, when the wallets are opened and the coins spent, the coins are owned by completely different people, and tracing the gap from when the coins vanished to when they were put back into the ecosystem becomes almost impossible... like trying to trace a dollar bill.

      If tainted coins hit an exchange or other service that trades BTC for other goods (even if they just trade BTC for their own currency and back again), unless that exchange has complete records of every transaction, the trail of stolen coins will stop with them, as it takes only one single broken link in the chain to have a trail be impossible to pursue by normal means.

      BTC made a lot of money for the early adopters, but it still has not yet lost momentum as a currency, and only will gain in value over time.

      • BitCoins are too much in use to ever really go down in value for any length of time now that China is in the game.

        They've dropped steadily for most of 2014, though. One could argue that that all of that was still correcting the bubble in late 2013, but that correction has lasted well over a year now. There hasn't really been a good time to hold on to Bitcoin since then, with a few short-term exceptions.

        • The drop in value makes it more worthwhile to shed them now, rather than waiting for values to pop back up to where they were once. The ONLY thing that will add value to bitcoin isn't as an investment tool (hence the speculation bubble), but rather when they become common in daily transactions.

          But that is the steep incline that we face, especially in light of all the scandals in the bitcoin trading world.

      • Bitcoins are 100% traceable

        Not in any meaningful sense of the word 'traceable', no. As you yourself go on to explain. Why lead with an untruth?

        and only will gain in value over time.

        You sure about that? It's hardly known for its economic stability...

      • Well, with real property, if you purchased stolen property, you normally have to give it up when it is discovered, whether or not you knew it was stolen. The thief would owe you restitution, but good luck collecting it. I don't see why it would be different in this case. Sure, some bit coins got shuffled around, but if we can easily identify which coins were stolen, we should be able to legally recover them, whether or not the current possessors did the stealing or not.

      • BTC made a lot of money for the early adopters, but it still has not yet lost momentum as a currency, and only will gain in value over time.

        it's 6-month high is ~484. it's currently ~269. as far as fluctuations go that is massive. using bitcoin for anything other than quick sales (cash -> bitcoin -> transfer) is really not smart.

        not to mention, the entire market is in a constant state of algorithmic manipulation (yes, i know, so is the stock market).

    • But it does leave a papertrail, the block chain.
    • by jandrese ( 485 )
      Well that may have been true in the past. But this time is totally different. Sign up for the new exchange today!

      It is depressing how many times people will fall for the same scam over and over again. Already we have heard of new exchanges "safer than ever" and people are lining up to put their money into them on the faint hope that it isn't a scam yet again.
    • Re:Yes, and? (Score:5, Insightful)

      by gstoddart ( 321705 ) on Wednesday March 04, 2015 @12:28PM (#49181311) Homepage

      Sounds like it was an overwhelming success, then.

      Every time I see stories like this, I think ... gee, so you entrusted millions of dollars with an entity which isn't a bank, isn't regulated as a bank, and who more or less mostly just promised they wouldn't steal your money ... and somehow people are surprised by this.

      On what basis, exactly, does handing strangers your money make sense when you have no legal basis to get it back?

      It's hard not to see this as a self inflicted problem, and people handed sacks full of money to some guy in an alley with no receipt thinking they were investing.

      Sorry, but I'm afraid this was people believing that Bitcoin was somehow magic, and that nobody would ever be a crook.

      • Re:Yes, and? (Score:4, Insightful)

        by GLMDesigns ( 2044134 ) on Wednesday March 04, 2015 @12:47PM (#49181473)
        Bitcoin != exchanges.
        You needn't and shouldn't keep your money in exchanges.
    • It's so anyone of any age or location could send money without billionaires and the world bank fucking with it. There are more illegal transactions with paper cash than bitcoins so take your stupid stereotypes and inaccurate info somewhere else.
    • I thought the whole point of Bitcoin was to provide anonymity to its anonymous creator so that he/she could be the ultimate early adopter, mine lots of Bitcoins when doing so was cheap, then anonymously sell them at any time after the idea caught on. Ain't anonymity wonderful?

      Bitcoin is the only thing I've ever heard of that could potentially change the world, yet whose creator staunchly desires to remain anonymous. In comparison, Newton, Jefferson, Edison, and Einstein never hesitated to sign their name

      • by cusco ( 717999 )

        The person most frequently pointed at as the likely creator of bitcoin is a CIA contractor, it would not surprise me at all to eventually learn that this was a CIA/DARPA project in experimental economics. What would surprise me is if none of the missing bitcoins showed up in the wallets of the investigators that took down Mt. Gox.

        • What would surprise me is if none of the missing bitcoins showed up in the wallets of the investigators that took down Mt. Gox.

          Maybe Samuel Jackson knows: isn't he the one who's always asking, "What's in your wallet?'

  • by Anonymous Coward

    Shocking!

  • by JaredOfEuropa ( 526365 ) on Wednesday March 04, 2015 @11:59AM (#49181075) Journal
    An anonymous currency, that allows you to set up an exchange in any country, and without any oversight whatsoever. The whole thing is trust based. Would you leave your cash with any random stranger in some Thai web cafe for safekeeping? Even if you see others do the same, seemingly without worry? Because leaving any significant amount of BTC in an exchange amounts to the same thing.
    • by OzPeter ( 195038 )

      Would you leave your cash with any random stranger in some Thai web cafe for safekeeping?

      No I would not. But then again those Thai women in the bars who keep wanting to have a drink with me all seem on the up and up.

      • by Anonymous Coward
        Those aren't women....
  • Your winnings sir!

    Yes, thank you.

    If you go swimming in the shark tank with the bookies, expect to loose your money or worse.

  • $180M is a lot of Magic the Gathering cards.

    Haven't they gone down significantly in value in recent years. That's probably enough to own all of them.

  • I wonder how much of those bitcoins represented "real" money (as in bitcoins that were purchased via cash), versus bitcoins that had only been mined? If they did not represent actual money that flowed into the system, then perhaps the impetus for tracking them isn't very high?

    • by Anonymous Coward

      I wonder how much of those bitcoins represented "real" money (as in bitcoins that were purchased via cash), versus bitcoins that had only been mined? If they did not represent actual money that flowed into the system, then perhaps the impetus for tracking them isn't very high?

      You don't understand how this works. All bitcoins have been mined, and there are no money "in the system". There are only potential buyers and sellers, which some times settle on a price and a trade is executed. When someone buys bitcoins they give money to some other person, and unless that person changes his mind they won't be used to buy back any coins.

      • Mt Gox is an exchange, and exchanges exchange "real" money for bitcoins, correct? So say I paid $2,000 for bitcoins at Mt Gox, and I left those coins there instead of transferring to my own wallet. Thus if those particular coins went missing, I would have been out exactly the $2,000 I paid for them. Now on the other hand, say I mined bitcoins and transferred to Mt Gox for them to be sold, and those coins went missing. They never had any "real" value attached to them - only whatever resources I claimed t

        • The problem with that logic is that they have the same value regardless of how you obtained them. If I get your point, you are saying that the person who mined a bitcoin will value it less because mining it was easier and took less money than the person who paid $2k for a bitcoin someone else mined.

          I guess if you feel that way, there are likely others that do as well. However, it doesn't make much sense because either of those bitcoins could be exchanged for $2k at any time.

        • There's lots of things I can either buy or find/create/grow myself. Potatoes I buy in a store are neither more nor less potatoey than potatoes I grow.

  • by jandrese ( 485 ) <kensama@vt.edu> on Wednesday March 04, 2015 @12:14PM (#49181197) Homepage Journal
    Is there anybody with real authority actually looking for this? As far as the government is concerned someone might as well have stolen all of the WoW Gold or Eve ISK. Pretty much everybody else doesn't have the means or expertise to actually do the real world search. Somebody has a huge fat wallet that they're going to tumble over the months and eventually cash out and unless they screw something up there's not much chance of being caught.
    • If there's missing millions then there's missing fraction-of-millions in taxes. So there's a motivation to go looking for it right there. And then, also, once it's in their hot little hands they can always decide to keep it. Even if all they do is sit on it for a while and then eventually cough it up, it can make them money.

      Somebody has a huge fat wallet that they're going to tumble over the months and eventually cash out and unless they screw something up there's not much chance of being caught.

      No rush.

      • by jandrese ( 485 )
        Oh yes, I forgot that everybody pays taxes on their Bitcoin transactions. They must be self reporting them just because they're so honest.
    • Re: (Score:2, Insightful)

      It's bigger than some countries' entire currency, Amazon and Newegg both take it as a form of payment, it's approved as a security backing now by the SEC and FINRA, and all serious investors take it seriously. So come back out of 2010 and join us in 2015 please and stop calling it a pretend currency.
      • by goose-incarnated ( 1145029 ) on Wednesday March 04, 2015 @02:52PM (#49182701) Journal

        It's bigger than some countries' entire currency, Amazon and Newegg both take it as a form of payment,

        No, they don't. They point you to an exchange because they only take real money. They absolutely will not let a single BTC touch their system. They do not accept it as a form of payment. They do, however, point you to an exchange at time of sale.

        it's approved as a security backing now by the SEC and FINRA,

        So are CDS, houses, stocks, commodities, etc. That don't make any of them a currency, or money.

        and all serious investors take it seriously.

        Name three.

        So come back out of 2010 and join us in 2015 please and stop calling it a pretend currency.

        On this you're absolutely correct. It is not even a pretend currency.

        • Newegg absolutely does take BTC directly from a customer's point of view. Name three investors? The Winklevoss twins and the owner of BIT. Oh and that doesn't make bitcoins money? I made a lot of money on them. Does that make them money? Everyone who knows what they're talking about will tell you BTC will never, ever collapse. That gives is inherent value. It is superior to most other currencies in a majority of ways.
    • by Tailhook ( 98486 )

      Is there anybody with real authority actually looking for this?

      Who knows. What I remember is that the thieves actually exploited MtGox's system, as opposed to Bitcoin proper. Their system reconciled transactions independently from the public block chain for performance reasons. So it doesn't surprise me that there is no public record that can be investigated.

      • by jandrese ( 485 )
        It's like they set the system up to allow the Bitcoins to be stolen. There is a bit of Poe's law here where you can never tell if a Bitcoin site operator is merely incompetent or actually a scammer. That and there is always a better scammer out there preying on the scammers. Even Ross Ulbrict got scammed for more than a million dollars worth of Bitcoins.
  • people who seek to get a currency away from "evil" government control get exactly what they want: worse. no government, no accountability. no accountability, you get screwed, and the only answer you will ever get is "oh well"

    you can't run from government regulation in hatred of it as a great evil, and then expect government to come to rescue you when you inevitably get fucked. you got fucked, because there's no regulations... which you *asked for* and were enthusiastic about, moron

    all this episode boils down to is some economically clueless fanboys needed to learn the hard way what the rest of us already know: that a currency backed by a government is obviously better than "free" alternatives

    all the evil shit a government can pull (and they do, i'm not defending government, i'm just noting there is far worse out there) is nothing compared to the evil that exists without a government backed currency and government oversight, accountability, and regulations of finance and banking. i'm not in love with government, i just recognize it as the *least worse* evil when it comes to currency mechanisms

    you can petition and redress your grievances to government, and get a hearing, and maybe justice (if you actually understand right and wrong and you aren't some deranged crackpot out for "justice")

    you can't do that against random assholes whom you trusted with your deposits for some ignorant reason that just basically boils down to uneducated enthusiasm

    it's like the people who rant and complain about how evil the police are. and then their car gets broken into... and... drum roll please... they call the police. you want to reform the police, fix the police, fight corruption. not fight their existence. you need the police. without the police, civilization quickly falls. of course there are crooked cops and bad cops. so fight that, the bad apples in the system, rather than fight the entire system. which you need, and want, despite the fact you aren't educated enough to see or understand that far worse problems exist without them. the same with government regulation of finance and banking. it is warped and corrupt and crooked. so fight the corruption. don't fight the whole system. because without the system, far worse shit will befall you

    people need to be educated enough on economics and history to know what kind of abuses exist out there without government oversight of banking

    • all this episode boils down to is some economically clueless fanboys needed to learn the hard way what the rest of us already know: that a currency backed by a government is obviously better than "free" alternatives

      Sure, theoretically. But is the currency you're getting worth the currency you're getting? And are you actually getting equal protection?

      • look at the article we are commenting under. there is your answer

        without protections, you get fucked

        it's kind of like antivaxxers: they have no fucking clue how horrible a world of constant deadly diseases was. so in this bubble of ignorance, created by progress, they only see the tiny "evil" in what we have to do to maintain the advance: get injections. they react to that as the evil that needs to be defeated. as if that's the only evil possible. and when enough of them allow enough attack vectors for a deadly disease to proliferate, people die. so here we have the real evil at work: ignorance

        the world is not a choice between unicorns and rainbows versus shit and broken bones

        the world is often a choice between various shades of bad situations

        wisdom is picking the least bad situation, and comparing it versus the other bad options. rather than ignorantly comparing the least worse bad situation against uneducated perfection fantasy. so government regulations, with all of the corruption and rent seeking and regulatory capture, etc., is better than no government, or weaker government

        people need to fight corruption, not government itself. in fact, those who corrupt government are often the ones loudly proclaiming government to be the enemy, rather than the corruption they create. and uneducated fools fall for their lies

        another example: the FDC

        like antivaxxers, certain paranoid economically illterate wackjobs see great evil in the FDC. and in their abject economic and historical ignorance, they have no clue of the historical suffering that led to the FDC. no, in their mind these controls exist because of vast conspiracies and assorted nutbag fantasy rantings about efforts to control us all, because reality is apparently an episode of scooby doo

        why does the FDC actually fucking exist in the first place? study your economics and your history. don't trust the low iq herp derp hysterics of alex jones types to "educate" you

        the reasons are mundane and sensible for the FDC. not dark and creepy. a world without them, the world before the FDC, is far, far worse:

        every dozen years, there would be a banking panic, and people would lose their life savings

        simple history. simple economic fact

        that's the real reason why we have the FDC (cue paranoid historically and economically illiterate whining about "freedom")

        and here we have bitcoin enthusiasts losing their deposits by entrusting them to random assholes without any government oversight, and guess what?

        "oh well"

        that's what life is like without "evil" government regulations in finance

        • by drinkypoo ( 153816 ) <martin.espinoza@gmail.com> on Wednesday March 04, 2015 @01:00PM (#49181623) Homepage Journal

          without protections, you get fucked

          Right, and with government "protection", you also get fucked. They take our money and then spend it oppressing us. I don't know that getting secure banking out of it is all that great a trade.

          • You didn't even read what I wrote

            Here, I've excerpted for you. Educate yourself, try again:

            >the world is not a choice between unicorns and rainbows versus shit and broken bones

            >the world is often a choice between various shades of bad situations

            >wisdom is picking the least bad situation, and comparing it versus the other bad options. rather than ignorantly comparing the least worse bad situation against uneducated perfection fantasy. so government regulations, with all of the corruption and rent seeking and regulatory capture, etc., is better than no government, or weak government

            You don't want to be oppressed? Ever try living in a place with no government or weak government?

            FIX it, don't destroy it.

            • You don't want to be oppressed? Ever try living in a place with no government or weak government?

              What I actually want is weak central government. I don't know that we need less government (well, in certain areas we certainly do, like military) but what we certainly need is less centralization. Pare the feds back to handling disputes and actually defending the country, making treaties.

              I also want representative democracy, and for the people to ratify bills directly. If that makes it harder to pass laws, OK. We have too many already. Let's get rid of some before we make more.

              I'm more likely to get my uni

        • What does the Democratic Front of Cabinda have to do with Bitcoin?

    • Re: (Score:2, Insightful)

      you can't run from government regulation in hatred of it as a great evil, and then expect government to come to rescue you when you inevitably get fucked. you got fucked, because there's no regulations.

      Sure you can. Americans call them Tea Party Republicans.

    • by Anonymous Coward

      Unlike cash based scams where the money always turns up.

  • More than bitcoins are missing. If you sold bitcoins through Mt. Gox, back when they peaked at US$1200, Mt. Gox delayed depositing them into your bank account. And delayed. And delayed. And delayed. And eventually went belly up without every paying.

    I had to deal with some of this, with an estate I was at the time administrator of.

  • I thought the point of the blockchain was that it recorded every transaction.

    I have no idea if it's practical, but in principle, it should be possible to trace the coins from a known point in time, taking into account the "dilution" when they are mixed with other coins.

    In other words, if you give me your entire wallet consisting of 1BC that is later determined to be "dirty money" (as declared by the police/a court/whomever) and I put it in my wallet consisting of 9 other BC, my wallet is now "10% contaminat

  • by Mike Van Pelt ( 32582 ) on Wednesday March 04, 2015 @02:46PM (#49182623)

    I wonder if the point wasn't to steal the Mt. Gox Bitcoins, but just to delete them, forever removing them from the system, like the several million dollars worth on that hard drive buried in a landfill somewhere. By removing a bunch from the system, it reduces the supply and raises the price for those who are holding lots of them.

    (Fans of 1960s James Bond movies might recall that this was Auric Goldfinger's reason for setting off a nuke in Fort Knox.)

  • For those wishing to catch up, I made a news timeline of the rise and fall of the site [newslines.org]

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