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Sifting Mt. Gox's Logs Reveals Suspicious Trading Patterns

timothy posted about 5 months ago | from the didn't-do-it-and-nobody-saw-me dept.

Bitcoin 143

This analysis of trading logs from the Mt. Gox Bitcoin exchange analyzes a subset of the transactions that took place there prior to the exchange's collapse, and makes the case that two bots (the writer calls them "Willy," and "Markus") were making suspicious transactions which may have been used to intentionally manipulate the trading price, and which can explain the loss of Bitcoin inventory on which the exchange's failure was blamed. The author of the analysis says "[T]here is more than plenty of evidence to suspect that what happened at Mt. Gox may have been an inside job. What I hope to achieve by releasing this analysis into the wild is for the public to learn the truth behind what happened at Mt. Gox, how it affected the Bitcoin price, and hopefully for the individuals responsible for the massive fraud that occurred at Mt. Gox to be put to justice. Although the evidence shown in this report is far from conclusive, it can hopefully spur a more rigorous investigation into Mt. Gox’s accounting data, both by the public (using the leaked data) and the authorities (forensic investigation on the actual data)."

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Needs more grammar-check (-1)

Anonymous Coward | about 5 months ago | (#47090519)

"the Mt. Gox Bitcoin exchange analyzes a subset of the transactions that took there prior to the Mt. Gox collapse"

I believe this sentence is missing the word "place".

GG Slashdot editors.

Re:Needs more grammar-check (-1, Offtopic)

Anonymous Coward | about 5 months ago | (#47090533)

I believe this sentence is missing the word "place".

Do you really think so much of your powers of detection that you believe no one would have spotted this without your pithy help?

Re:Needs more grammar-check (-1)

Anonymous Coward | about 5 months ago | (#47090567)

Oh look, a troll. Your comment lacks as much sense as the summary.

For the win! (-1, Troll)

Anonymous Coward | about 5 months ago | (#47090597)

Oh look, a troll. Your comment lacks as much sense as the summary.

You have a small penis.

Re:Needs more grammar-check (-1)

Anonymous Coward | about 5 months ago | (#47090589)

Transacitons is a verb. There is no 'place' to take. GG grammer nazi's

Re:Needs more grammar-check (0)

Anonymous Coward | about 5 months ago | (#47091449)

Oh dear, better give up on that "correcting people" idea, huh?

transactions -- Not a verb, as used in GP
grammar -- yes with two As
nazis -- plural, not apostrophe

Re:Needs more grammar-check (5, Funny)

Anonymous Coward | about 5 months ago | (#47090647)

What do Mt Gox and slashdot have in common? They accidentally the whole thing.

Hahahahhahaha (5, Insightful)

Anonymous Coward | about 5 months ago | (#47090535)

First we hear how BitCoin rules because it side steps those evil governments and their rules and regulations. Now that people have lost money due to dishonest behavior (which was 100% predictable given the nature of BitCoin) people are howling for the "individuals responsible for the massive fraud that occurred at Mt. Gox to be put to justice".

HAHAHAHAHAHAHAHA

What buffoons. First its "The government is evil! We rule because we are outside their jurisdiction". Then when the completely obvious consequence of having an unregulated and anonymous system for monetary transactions happens its "Hey, what the ???? Someone has stolen our money! Quick! Call the police! Government, come save us!".

HAHAHAHAHAHAHAHAHA

Re:Hahahahhahaha (5, Insightful)

WhiteZook (3647835) | about 5 months ago | (#47091081)

You are making a common mistake of claiming that a diverse group of people all have exactly the same opinion and motives. But in reality, the bitcoin supporters are all different people with different opinions. Some may be completely opposed to rules and regulations, while others are not. At any time, you only hear the most vocal and opinionated members of the group express themselves.

Re:Hahahahhahaha (1)

Anonymous Coward | about 5 months ago | (#47092065)

OPs argument can be interpreted as "government regulation of currency is a good thing; the present fiasco explains why." I.e., if you don't think the banking industry, of which Mt. Gox is basically a part, needs to be regulated... well... you're wrong.

Re:Hahahahhahaha (4, Insightful)

Anonymous Coward | about 5 months ago | (#47091099)

What buffoons. First its "The government is evil! We rule because we are outside their jurisdiction". Then when the completely obvious consequence of having an unregulated and anonymous system for monetary transactions happens its "Hey, what the ???? Someone has stolen our money! Quick! Call the police! Government, come save us!".

Don't mistake hypocrites for bufoons. The "small government" people have always been about "small government" for you, "big government for me". Even most of the strictest "libertarians" want a strong police and army. Why? Becuase they believe (mostly against the evidence) that in future they will be rich and have lots of property that they would like someone else to support. Look at the way the Ayn Rand article on Wikipedia [wikipedia.org] says "[..] despite her initial objections, was persuaded to allow Evva Pryor, a consultant from her attorney's office, to sign her up for Social Security and Medicare." as if someone just signed a paper with her name and tries to avoid mentionaing that she actually happily took medical treatment... No; she got pain relief and medical treatment solely because the "big government" made sure she could. She benefitted from the social security payments of many people who died quickly and in accidents in a way that the money she would have saved from not paying social secruity could never have helped her and she still wasn't willing to be greatful.

"Those Bitcoin people you are talking about are clear; they want the police to protect them; they want you to pay for it whilst they complain about too high taxes. This is not buffoonery, this is theft.

Re:Hahahahhahaha (0)

Anonymous Coward | about 5 months ago | (#47092575)

Kudos on mentioning "greatful" and exposing a total hypocrite. Of course we need government and governance. The sane among us are willing to discuss the details, but to think "markets" solve anything of itself / by itself, is just historically and factually plain wrong in everything but the most simple-minded cases.

Historically speaking, markets need to be saved by "policies and plans" over and over again, which unfortunately yes, are _creating_ "business cycles". Without checks, balances and outright manipulation, there are no "markets" at all to speak of, neither electric or magnetic.

Not one year in history have Western markets not been manipulated in some way. Why hail something we've never witnessed or has proven itself?

Re:Hahahahhahaha (-1)

Anonymous Coward | about 5 months ago | (#47091445)

Such loud laughter while simultaneously having your head up the governments ass like a buffoon slave. Quite an accomplishment sir. Now go off and suck the state's tit, lemming.

Re:Hahahahhahaha (2)

drinkypoo (153816) | about 5 months ago | (#47091471)

What buffoons. First its "The government is evil! We rule because we are outside their jurisdiction". Then when the completely obvious consequence of having an unregulated and anonymous system for monetary transactions happens its "Hey, what the ???? Someone has stolen our money! Quick! Call the police! Government, come save us!".

You can be sure that there are at least as many bitcoin proponents who would like a government to simply stay out of the whole affair and let them engage in vigilantism as there are those who would like a government to provide a remedy.

Re:Hahahahhahaha (0)

Anonymous Coward | about 5 months ago | (#47091679)

First we hear how BitCoin rules because it side steps those evil governments and their rules and regulations. Now that people have lost money due to dishonest behavior (which was 100% predictable given the nature of BitCoin) people are howling for the "individuals responsible for the massive fraud that occurred at Mt. Gox to be put to justice".

HAHAHAHAHAHAHAHA

What buffoons. First its "The government is evil! We rule because we are outside their jurisdiction". Then when the completely obvious consequence of having an unregulated and anonymous system for monetary transactions happens its "Hey, what the ???? Someone has stolen our money! Quick! Call the police! Government, come save us!".

HAHAHAHAHAHAHAHAHA

As opposed to your money sitting in traditional too-big-to-fail institutions that are immune to "dishonest behavior"?

HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA

Because you think those bankers were taught a firm lesson last time they tried to destroy the world with greed, and won't ever do it again?

HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA

Only a utter moron would think their money is safe with any institution, regulated or unregulated. This is the entire fucking reason we still hold value in shiny yellow rocks and sparkly pieces of coal.

Re:Hahahahhahaha (0)

Anonymous Coward | about 5 months ago | (#47092297)

"As opposed to your money sitting in traditional too-big-to-fail institutions that are immune to "dishonest behavior"?"

Up to the first $250,000 deposited per bank is insured by FDIC. Bitcoin is Wall Street writ small.

This just in: flim flam currency is flim flam (4, Funny)

Gothmolly (148874) | about 5 months ago | (#47090539)

A virtual Internet-based currency is subject to electronic flim-flammery? Color me shocked.

Re:This just in: flim flam currency is flim flam (0, Informative)

Anonymous Coward | about 5 months ago | (#47090627)

There's nothing wrong with the currency. It's working just fine. Some of the websites that integrate with it? Not so much.

Re:This just in: flim flam currency is flim flam (3, Insightful)

Anonymous Coward | about 5 months ago | (#47090661)

There is more to it than just the currency. Without the infrastructure used to use and support it, it's useless.

If there are issues with the infrastructure, websites, exchanges, etc. used to support it, then for all practical purposes there is a problem with the currency.

Re:This just in: flim flam currency is flim flam (1, Insightful)

Anonymous Coward | about 5 months ago | (#47090807)

It is a waste of computing resources. It duplicates systems that are already in place. The existing currency systems may have problems but is adding, perhaps several, largely uncontrolled currency systems to the mix, a benefit?

If you want to use GPUs and electrical power, try folding at home.

Re:This just in: flim flam currency is flim flam (1)

Anonymous Coward | about 5 months ago | (#47090999)

There's nothing wrong with the currency. It's working just fine. Some of the websites that integrate with it? Not so much.

Actually there are problems with Bitcoin as a currency, currently the price is a bit too volatile.

Bitcoin is better thought of as a payment system. No real risk there. Especially for merchants. There are exchanges that handle the bitcoin transaction for merchants and the merchants are guaranteed to get the exact dollar amount they specified as the price.

Re:This just in: flim flam currency is flim flam (0)

Anonymous Coward | about 5 months ago | (#47091935)

Actually there are problems with Bitcoin as a currency, currently the price is a bit too volatile. Bitcoin is better thought of as a payment system. No real risk there. Especially for merchants. There are exchanges that handle the bitcoin transaction for merchants and the merchants are guaranteed to get the exact dollar amount they specified as the price.

Oh, I see... no risk in not having a reasonable idea of if you'll make a loss or profit on a sale from day to day... If your inventory replacement cost is in a currency other than BTC, the exchange rate is rather important for a merchant.

A third more likely bot... (0)

Frosty Piss (770223) | about 5 months ago | (#47090543)

Many people have opined about the suspicious behavior of the bot known as "Karpeles" ... More recently, this bot has been very quiet.

Exchanges should not lose inventory! (4, Insightful)

Anonymous Coward | about 5 months ago | (#47090577)

No matter what the price is, a correctly operated exchange should pair buyers with sellers, and only perform the transactions when the buyers offer more than the sellers demand (exchange gets the difference). That's what it means to be an exchange: you facilitate trades. Some price manipulation shouldn't hurt them: it's just more trades and thus more profit.

If you want to add some extra damping there and capture some profits from the changing prices, you can either screw with the profit margin size dynamically, or you can become a user of your own exchange (become an investor in multiple currencies, and shift between them on your own exchange). Investing like that is a separate thing, and if they mixed that up with the operating of the exchange part, then they really screwed up: if you botch separation on concerns, one screw up wrecks everything. Well, we know they really screwed up in lots of ways, and with no proper separation of concerns, they totally wrecked everything in lots of ways. No partial failure support + fail horribly at something = oops, no more company.

More like an exchange and an online brokerage ... (0)

Anonymous Coward | about 5 months ago | (#47091007)

No matter what the price is, a correctly operated exchange should pair buyers with sellers ...

Virtual coin exchanges are typically online wallets as well, they store coins. So they are more like an exchange and an online brokerage combined.

Re:Exchanges should not lose inventory! (5, Insightful)

Rich0 (548339) | about 5 months ago | (#47091165)

Exchanges should not lose inventory!

Exchanges should not have inventory to lose!

Those who lost money from Mt. Gox were treating it as a bank, not as an exchange. It is a lot easier to mess up the operation of a bank, or to be burned by a bank failure. That is why the FDIC was created in the US, and I imagine that most countries have similar sorts of arrangements. If somebody was storing any significant amount of money at Mt. Gox then perhaps they've learned something.

Storing your bitcoins in an unregulated bitcoin-based bank is no different than storing your US dollars in an unregulated dollar-based bank.

I agree with everything you said though - exchanges shouldn't have money at risk at all if operated properly, concerns should be separated, and even if something was messed up the exchange concern should never have more money on-hand than the momentary trading volume.

Re:Exchanges should not lose inventory! (1)

WhiteZook (3647835) | about 5 months ago | (#47091179)

The problem is that in order for an exchange to work properly, transactions need to be cleared instantly. If the fiat money and/or the bitcoins are not stored in accounts on the exchange, how do you propose to quickly clear the exchange ? For example, MtGox was located in Japan, so if I'm in Europe, and I have 1000 EUR in my own bank account, and I wish to buy bitcoin from a seller in the US, when and how do you want to exchange the money and bitcoin for a price we all agree on, and with no risk of someone running away with some of the funds ?

Re:Exchanges should not lose inventory! (1)

Rich0 (548339) | about 5 months ago | (#47091237)

Hence my point about the "momentary trading volume." Mt. Gox was holding far more bitcoin (or purporting to, at least) than necessary to fill trades.

I don't have a problem with them taking money and holding it for a few hours until they match everybody up at a reasonable price. If there were some kind of problem, there shouldn't have been a loss of more than a few hours of trading volume.

Re:Exchanges should not lose inventory! (1)

WhiteZook (3647835) | about 5 months ago | (#47091405)

Still, in order for MtGox to facilitate a trade they must have an account per user, that will hold a certain amount of btc and fiat. So, say I wanted to buy 1000 EUR worth of bitcoin, I arrange a bank transfer from my bank to MtGox. This may take a few days, and then they have my money in their account. Now, maybe during that time, the BTC/EUR exchange rate went up, and I decide to wait for the price to drop. In that case, the 1000 EUR will be sitting in their account until I decide to buy btc (or decide to cancel, and transfer it back). If there are enough people like that, they will have quite large sums of money in their account.

Re:Exchanges should not lose inventory! (1)

Rich0 (548339) | about 5 months ago | (#47091427)

This is where separation of concerns comes in. They're not just running an exchange in the case you describe - they're holding onto money.

Fine, they run a bank/brokerage, and an exchange. These should be separate concerns, with the exchange never holding money at all, and the bank being run like a bank.

Re:Exchanges should not lose inventory! (1)

JaredOfEuropa (526365) | about 5 months ago | (#47091465)

Instant transactions would be ideal but they are not really necessary for the currency to function properly. If it takes, say, a day for a transaction to clear, and the exchange has a good reputation, then the odds are very good that they won't make off with your cryptocoins or dollars while the transaction is being cleared. And if you do use it as an exchange rather than an online wallet, your exposure is likely to be rather limited.

Re:Exchanges should not lose inventory! (1)

WhiteZook (3647835) | about 5 months ago | (#47091531)

Except that the customers will prefer a small delay, so they'd rather use an exchange where they can immediately withdraw their funds. This is especially true for people wanting to trade back and forth, or those seeking to do arbitrage for profit. Given that you have to put trust in the exchange anyway, you might as well extend the trust a little bit in return for immediate transactions.

Did I Call It, Or What? (0)

Jane Q. Public (1010737) | about 5 months ago | (#47090617)

"Inside job," I said...

(Actually I said I thought it "probably" was.)

Re:Did I Call It, Or What? (-1, Offtopic)

Anonymous Coward | about 5 months ago | (#47090623)

Jane, you would have known nothing had your mouth not been firmly clinched around my cock.

Re:Did I Call It, Or What? (-1, Offtopic)

Jane Q. Public (1010737) | about 5 months ago | (#47090643)

Jane, you would have known nothing had your mouth not been firmly clinched around my cock.

Come on, dude, you know that's BS. It was teeth, not lips. And they weren't even mine.

But I'm happy to learn you're finally out of the hospital. Care for another?

Re:Did I Call It, Or What? (-1)

Anonymous Coward | about 5 months ago | (#47091259)

Jane, you would have known nothing had your mouth not been firmly clinched around my cock.

That's a strand of spaghetti, Tarzan

. You don't have a penis, you silly eunuch

. That's your anus clenching a salami, again.

Re:Did I Call It, Or What? (0)

Anonymous Coward | about 5 months ago | (#47091093)

Did you give reasons? If not, then "calling it" was just a guess.

Re:Did I Call It, Or What? (1)

Rich0 (548339) | about 5 months ago | (#47091169)

It had to be gross mismanagement at best. An exchange doesn't need to hold money. If they ran a bank and an exchange then those operations should have been isolated.

This is really just a bank failure by another name. Banks love to take risks with other people's money, which is why they tend to fail all the time when left to their own devices, which is why nobody leaves them to their own devices.

Re:Did I Call It, Or What? (0)

Anonymous Coward | about 5 months ago | (#47091747)

You and 90% of slashdot and reddit and the rest of the internet. Pat yourself on the back!

As time goes on... (4, Insightful)

Rick in China (2934527) | about 5 months ago | (#47090619)

The less people will care. The less people will remember their lost money, and the less people will be able to do about it. I think we're close to that point where those who lost have accepted it and those who followed the story stopped, no lessons learned, look at all the thriving bitcoin exchanges & online wallets. Like school shootings, we're about over it til the next big one hits.

Re:As time goes on... (0, Troll)

Kevin's Bacon (3666399) | about 5 months ago | (#47090729)

The less people will care. The less people will remember their lost money

BitCoin is not "money".

Re:As time goes on... (0)

Anonymous Coward | about 5 months ago | (#47090813)

whatever.

Re:As time goes on... (0)

Anonymous Coward | about 5 months ago | (#47090817)

And you are not a smart man.

Re:As time goes on... (0)

Rick in China (2934527) | about 5 months ago | (#47090851)

By definition, BitCoin is money. Troll more elsewhere. "any article or substance used as a medium of exchange, measure of wealth, or means of payment, as checks on demand deposit or cowrie."

Merchants never see or touch a bitcoin ... (2, Informative)

perpenso (1613749) | about 5 months ago | (#47091035)

By definition, BitCoin is money. Troll more elsewhere. "any article or substance used as a medium of exchange, measure of wealth, or means of payment, as checks on demand deposit or cowrie."

It currently fails as a stable measure of wealth (alternatively described as a store of value), its a bit too volatile. Although it is currently a good medium of exchange.

As evidence for the proceeding notice the growing popularity of exchange merchant services where merchants who accepts bitcoins as payments (from the customer's perspective) never in fact sees or "touches" a bitcoin. They specify a price to the echange in fiat, the exchange provides the equivalent price in bitcoins and provides a payment address. The bitcoin payment in fact goes to the exchange which immediately converts to fiat and credits/pays the merchant.

Re:Merchants never see or touch a bitcoin ... (0)

Rick in China (2934527) | about 5 months ago | (#47091139)

That process is irrelevant towards defining BitCoin as money. By the very definition of what money is and what money is used for - BTC qualifies.

Re:Merchants never see or touch a bitcoin ... (2, Insightful)

perpenso (1613749) | about 5 months ago | (#47091213)

That process is irrelevant towards defining BitCoin as money. By the very definition of what money is and what money is used for - BTC qualifies.

It fails by your very own definition, specifically the stable measure of wealth (alternatively described as a store of value) requirement. Its currently too volatile. The process is just one convenient and easily understood piece of evidence of this.

Bitcoin's current value is that as a payment method not a currency. It currently threatens things like PayPal, not currencies like the US Dollar, Euro, etc.

To some, bitcoin also has value as a speculative asset.

Re:Merchants never see or touch a bitcoin ... (1)

dave420 (699308) | about 5 months ago | (#47091613)

He didn't say "stable" - you did. His point stands.

Re:Merchants never see or touch a bitcoin ... (1)

perpenso (1613749) | about 5 months ago | (#47092593)

He didn't say "stable" - you did. His point stands.

More like he omitted stable from the original definition.

That aside, your argument is then that bitcoin is currently an unstable measure of wealth, currently an unstable holder of value, and it is still is a useful currency?

Re:Merchants never see or touch a bitcoin ... (1)

Noah Haders (3621429) | about 5 months ago | (#47091941)

What does BTC stand for?

Re:As time goes on... (0)

Anonymous Coward | about 5 months ago | (#47092237)

By definition, BitCoin is money. Troll more elsewhere. "any article or substance used as a medium of exchange, measure of wealth, or means of payment, as checks on demand deposit or cowrie."

By that definition WoW gold is money. Hell, even a currency in a game played by only one person is money by such a weak definition. If that's your definition of money, then I agree BitCoin is money just like beads are money.

Re:As time goes on... (1)

WhiteZook (3647835) | about 5 months ago | (#47090871)

Even if you don't consider bitcoin money, many people caught in the MtGox scam also lost regular money.

A very useful payment system ... (4, Insightful)

perpenso (1613749) | about 5 months ago | (#47091013)

BitCoin is not "money".

Even if true, bitcoin would still be a very useful payment system. It may not replace the US Dollar but it may very well replace PayPal.

Re:A very useful payment system ... (1)

jonbryce (703250) | about 5 months ago | (#47091577)

The problem is that you still need PayPal or a similar system (such as BACS, SWIFT, Visa etc) to get your fiat money to the exchange.

Re:A very useful payment system ... (1)

WhiteZook (3647835) | about 5 months ago | (#47091619)

Yes, but you could use a local merchant to get bitcoins, and transfer those to the other side of the world.

Re:A very useful payment system ... (1)

perpenso (1613749) | about 5 months ago | (#47092567)

The problem is that you still need PayPal or a similar system (such as BACS, SWIFT, Visa etc) to get your fiat money to the exchange.

Don't I need BACS (ACH in the US), VISA, etc to get my money into PayPal?

Re:As time goes on... (0)

Anonymous Coward | about 5 months ago | (#47091183)

My 370 cost me around $500 and end up selling for $291,000 I should have waited a little more but I'm pleased with the deal. Shit I forgot all about them until my brother told me the price of was exploding and I was like woooo I'm not broke anymore!

IMO Better than money.

Re:As time goes on... (1)

Lloyd_Bryant (73136) | about 5 months ago | (#47091401)

The less people will care. The less people will remember their lost money, and the less people will be able to do about it. I think we're close to that point where those who lost have accepted it and those who followed the story stopped, no lessons learned, look at all the thriving bitcoin exchanges & online wallets. Like school shootings, we're about over it til the next big one hits.

Hmmmm. Take that paragraph, and "s/bitcoin exchanges/stock exchanges/" and "s/online wallets/portfolios/", and it would still be entirely true. Looks like the bitcoin markets aren't all that different from the securities markets.

White collar or common thug? (2, Funny)

pitchpipe (708843) | about 5 months ago | (#47090635)

I think the US government is genuinely confused. They aren't sure if these guys are more like Wall-Streeters that committed fraud on a massive scale thereby enriching themselves with billions, or common thugs who rob banks with guns. If it's the former, they're safe: too big to jail and one of the boys. If it's the latter, well, here comes pound-me-in-the-ass prison for life.

If only they would have made it simpler by either stealing a lot more, or a lot less.

Re:White collar or common thug? (0)

Anonymous Coward | about 5 months ago | (#47090763)

I think the government would be more interested if it could take over, regulate it, find drug dealers and gun runners, find political candidates buying hookers or unreported donations, tax evasion... whatever.

They can already do that with normal currencies, so bitcoin is useless to them and probably inflationary.

Government does regulate/tax it. (0)

Anonymous Coward | about 5 months ago | (#47091049)

I think the government would be more interested if it could ... regulate it ...

The US government does regulate it with respect to taxation. Mining is taxed. Increases in value are taxed. Although it is considered a asset not a currency. Google the IRS's virtual currency notice.

Face it, a government could "outlaw" it and effectively prevent its use among mainstream merchants. Relegate it to underground only use.

Mt Gox is in Japan ... (2)

perpenso (1613749) | about 5 months ago | (#47091039)

I think the US government is genuinely confused.

I think the US government doesn't care. Its the Japanese government that cares, Mt Gox is in Japan. :-)

Re:White collar or common thug? (4, Insightful)

NicBenjamin (2124018) | about 5 months ago | (#47091263)

I think the US government is genuinely confused. They aren't sure if these guys are more like Wall-Streeters that committed fraud on a massive scale thereby enriching themselves with billions, or common thugs who rob banks with guns. If it's the former, they're safe: too big to jail and one of the boys. If it's the latter, well, here comes pound-me-in-the-ass prison for life.

If only they would have made it simpler by either stealing a lot more, or a lot less.

The problem with this argument is there's no evidence that Mt. Gox actually stole the money itself.

There's evidence a bunch of BTC advocates with excessively high IQs (and the corresponding total lack of common sense) are extremely convinced Karpeles stole the money, and have figured out how he could do it. But anyone who pisses off a bunch of high IQ people is gonna quickly be informed that they clearly are the reincarnation of Hitler and Stalin, as proven in this extremely convincing 47-page manifesto, which can only be understood by people eligible for Mensa membership. So the fact that BTC guys think they have evidence he stole the money is not terribly convincing.

What is convincing is the fact we know where Karpeles is, and he's in bankruptcy. The bankruptcy Judge will have a good idea of Karpeles financial situation, which means that if he's spending like a millionaire and claiming his company has no money he's going to jail in Japan. Which in turn means if he stole hundreds of millions he'd have fled someplace under an assumed name.

What's more convincing is his story. "programmers with no experience in security, totally fucked up the security," is a significantly more believable scenario then "programmers with no experience in security, and no history of fraud, purposefully designed a security flaw into our system specifically so they could exploit it." The fact he found a hundred million or so in BTC under his couch further increases the first story's credibility, because if you're good at security you don't do that shit.

Re:White collar or common thug? (0)

Anonymous Coward | about 5 months ago | (#47091609)

There's evidence a bunch of BTC advocates with excessively high IQs (and the corresponding total lack of common sense) are extremely convinced Karpeles stole the money, and have figured out how he could do it. But anyone who pisses off a bunch of high IQ people is gonna quickly be informed that they clearly are the reincarnation of Hitler and Stalin, as proven in this extremely convincing 47-page manifesto, which can only be understood by people eligible for Mensa membership.

Oh boohoo. How is this more convincing than the farmer who claims "lightning is perfectly safe, as I've never been struck by it"? It may get you accepted by the boyz 'n the hood, but in the real world an argument from ignorance only serves to undermine your own position.

"programmers with no experience in security, totally fucked up the security," is a significantly more believable scenario then "programmers with no experience in security, and no history of fraud, purposefully designed a security flaw into our system specifically so they could exploit it."

Huh? Why would anyone running their own software have to "purposefully design a security flaw" in order to exploit it?

Of course this would happen... (0)

Anonymous Coward | about 5 months ago | (#47090637)

It's not like they had better security than an actual bank and even then, banks are also subject to inside jobs often.
Bitcoin was doomed to fail from the get-go. No sane person would ever invest anything in it, yet we saw many insane people during the one year period where bitcoin reigned. Lock 'em all up I say.

Easy to solve (0)

Anonymous Coward | about 5 months ago | (#47090639)

Find Kevin Bacon.

Re:Easy to solve (1)

Kevin's Bacon (3666399) | about 5 months ago | (#47090695)

So, this whole Mt. Gox thing is why we have financial regulation?

Re:Easy to solve (0)

Anonymous Coward | about 5 months ago | (#47090713)

No, banks and stock markets had problems in the past. It wasn't foresight; same as for the EPA, labor laws, OSHA, ...

Re:Easy to solve (-1)

Anonymous Coward | about 5 months ago | (#47090759)

It wasn't foresight; same as for the EPA, labor laws, OSHA, ...

Wow. For you Tea Baggists - oh, I'm sorry, "Libertarians" - it always comes back to the EPA and OSHA...

Re:Easy to solve (0)

Anonymous Coward | about 5 months ago | (#47090835)

The government isn't very good at doing these things at times but there were non-government problems that created them. Private bank failures was one. Of course, back then savings accounts were viable.

Re:Easy to solve (3, Insightful)

sfcat (872532) | about 5 months ago | (#47090955)

It wasn't foresight; same as for the EPA, labor laws, OSHA, ...

Wow. For you Tea Baggists - oh, I'm sorry, "Libertarians" - it always comes back to the EPA and OSHA...

He isn't saying there shouldn't be an EPA or OSHA, he's saying that people had problems then came up with the regulatory solution (ie creating the EPA). WTF are you responding to? I don't even think the GP is a tea partier.

PS I'm a Democrat, not trusting the FED (which is a rational position if you know its history) isn't the same as being a Tea Party member. Its just one issue out of many and one that quiet a few Occupiers would agree with (well the ones that know what the FED is anyway). Now go troll elsewhere.

Re:Easy to solve (1)

smallfries (601545) | about 5 months ago | (#47091079)

FYI - it is more politically correct to refer to them as Tea Baggers.

Re:Easy to solve (1)

TubeSteak (669689) | about 5 months ago | (#47091091)

PS I'm a Democrat, not trusting the FED (which is a rational position if you know its history)

And what history is that?

The Federal Reserve Banking System was created in response to a string of banking panics, culminating in the panic of 1907.
The Fed literally replaced a group of really rich dudes who had thrown money into (aka "bailed out) the banking system to keep it afloat.

Re:Easy to solve (1)

drinkypoo (153816) | about 5 months ago | (#47091481)

The Fed literally replaced a group of really rich dudes who had thrown money into (aka "bailed out) the banking system to keep it afloat.

Right, the people who broke the system to begin with had to bail it out. The people with the money make the rules, see, the same rules that caused the collapses. The new rules say that we all have to pay for the bank bailouts, they obviously don't prevent them. You have, ironically, simply provided your opposition more ammunition.

The wealthy own 85% of everything, they should pay 85% of the taxes.

Re:Easy to solve (0)

Anonymous Coward | about 5 months ago | (#47091627)

And what history is that? The Federal Reserve Banking System was created in response to a string of banking panics, culminating in the panic of 1907. The Fed [..] replaced a group of really rich dudes who had [bailed out] the banking system to keep it afloat.

Haven't you just answered your own question? If the previous banking crisis was shouldered by the wealthy, what purpose does the Federal Reserve have but to absolve the wealthy from risk?

Re:Easy to solve (1)

Jane Q. Public (1010737) | about 5 months ago | (#47090849)

No. This whole Mt. Gox thing is solid evidence that "financial regulation" (because it does exist), when it isn't just "Good Old Boyism", is just plain incompetent.

Re:Easy to solve (0)

Anonymous Coward | about 5 months ago | (#47090977)

If you read TFA, you'll see it seems they did the scam in a very traditional manner, by keeping two sets of books.

Re:Easy to solve (0)

Anonymous Coward | about 5 months ago | (#47091719)

So, this whole Mt. Gox thing is why we have financial regulation?

No, but the hilarious part of that is people thinking that regulation will somehow fix this when we've made it very fucking clear that too-big-to-fail will trump not only regulation but law.

So fuck the rules, and good luck with your money. Hope your government "regulators" don't fuck you in the ass placating too-big-to-fail before you have to retire and live on that nest egg you're desperately trying to get criminals to manage and grow for you without stealing it.

And yes, that is the new definition of 401k. I sure as hell don't feel any more confident today than I did in 2008 that criminals running the banking industry won't attack again.

Nice piece of work (3, Informative)

vikingpower (768921) | about 5 months ago | (#47090825)

Well-done article. Read it top to bottom. Congrats.

Re:Nice piece of work (1)

Trax3001BBS (2368736) | about 5 months ago | (#47092419)

Well-done article. Read it top to bottom. Congrats.

I tried to follow it all the way through, bounce around reddit and even downloaded the torrent "2014 Mt. Gox Leak" http://thepiratebay.se/torrent... [thepiratebay.se]

But wasn't able to view it as there's concern over the file TibanneBackOffice.zip; It appears to be a MAC.OSX.Coinstealer, go figure.
https://www.virustotal.com/en/... [virustotal.com]

Or in other words... (0)

DerekLyons (302214) | about 5 months ago | (#47090959)

"[T]here is more than plenty of evidence to suspect that what happened at Mt. Gox may have been an inside job."

Or, in other words, evidence to suspect what pretty much everyone has suspected all along.

Browsing at work (0)

Anonymous Coward | about 5 months ago | (#47091077)

Great, now I have a website called WillyReport in my work computer's history.

Makes it sound like some male only HotOrNot!

well IMO (0)

arbiter1 (1204146) | about 5 months ago | (#47091121)

"hopefully for the individuals responsible for the massive fraud that occurred at Mt. Gox to be put to justice"
Since bitcoin's only value is what some people put on it, and only hand full of governments even recognize it as legit currency, Stealing bitcoins amounts to nothing more then stealing someone gold in WoW, guildewars2, diablo3, etc.

Re:well IMO (2)

WhiteZook (3647835) | about 5 months ago | (#47091133)

The same applies to real gold, precious gems, and many works of art.

Re:well IMO (1)

jonbryce (703250) | about 5 months ago | (#47091585)

Governments do generally recognise that you can steal things other than legit currency.

Gox used margin trading & fractional reserve b (0)

Anonymous Coward | about 5 months ago | (#47091153)

LOL, MtGox greedy scumbags used margin trading & fractional reserve banking. Same scam is pulled every day but there are some rules, that keep this scam in a narrower corridor. Scammer Karpeles had no margin limits nor minimal equity requirements so he did what he wanted. :)
Fast margin trading, derivatives and fractional reserve banking are not your friends. Do you remember those hundreds of billions of dollars of taxpayers money, Obama and his team of banksters handed over to commercial privately held banks?

Re: Myth of the Obama Bank Bailout (5, Informative)

elwinc (663074) | about 5 months ago | (#47091333)

.... Do you remember those hundreds of billions of dollars of taxpayers money, Obama and his team of banksters handed over to commercial privately held banks?

Not quite. Not quite.

Personally, I recall the $700 billion dollar TARP program [wikipedia.org] advocated by Henry Paulson and signed into law by George W. Bush. Can you provide us with links describing the Obama bailout program you refer to? (Don't worry, I'm not holding my breath).

I also recall Obama announcing that the banks had paid back their loans with interest, such that the government made a profit on TARP. [politifact.com]

In summary, you are entitled to your own opinion, but not to your own facts!

Re: Myth of the Obama Bank Bailout (-1)

Anonymous Coward | about 5 months ago | (#47091655)

Obama effectively wrote checks for over $2 trillion in the bailout mess.

Re: Myth of the Obama Bank Bailout (0)

Anonymous Coward | about 5 months ago | (#47091769)

herpala derpala

don't worry, the GOP will definitely save you from the scary black socialist

Fox News (1)

Anonymous Coward | about 5 months ago | (#47091869)

You need to stop watching Fox News until you realize that they are full of shit most of the time.

And when you realize that, you will find that Fox News is this incredible piece of performance art.

I mean really, just about every woman on there is younger, with a push up bra and LOTS of cleavage, hooker heels, lots of makeup, and slit slutty dresses.

Their target demographic is: old, white, conservative, men. The same goes for talk radio. (I know this because I was in on a programming meeting at a station.)

So, they cater to the old whit conservative guy World view and tell them what they want to see and hear - regardless of the truth: that they are the only ones working hard and everyone else is sponging off of them and the World is filled with cheap slutty women with push-up bras.

Everyone else watching is just gravy.

I tell you, the programming people there think you and your kind are stupid. And the way they can manipulate you people just makes me think they are right.

Every time Hannity says that Talk Radio listeners are smarter than everyone else, I just have to wonder how he keeps from breaking into hysterical laughter.

Re: Myth of the Obama Bank Bailout (2)

geekmux (1040042) | about 5 months ago | (#47092479)

Obama effectively wrote checks for over $2 trillion in the bailout mess.

As if Democratic-flavored fuck-ups taste any better than Republican ones. It's practically funny watching two groups argue while both of them shove shit in their mouths purporting theirs tastes far better.

When we can start talking about how the next asshole-in-charge won't write even more checks instead of pointing fingers, then perhaps I'll start giving a shit as to who's name is on the signature line.

Re: Myth of the Obama Bank Bailout (0)

Anonymous Coward | about 5 months ago | (#47092531)

I thought Obama was supposed to be better than Bush. You are clearly equating the two, thus Obama is no better than Bush by your own post.

Re:Gox used margin trading & fractional reserv (2)

jonbryce (703250) | about 5 months ago | (#47091589)

The difference between banks and MTGox is that while banks also use fraction reserve, the full liabilities are backed by assets in the form of loans they have handed out, and security on the assets of the borrowers such as property. At the time of the financial crisis, those assets and collateral were not sufficient to cover the fractional reserve liabilities, but at least they had something, unlike MTGox which had nothing to back the fractional reserve liabilities.

Good work (0)

Anonymous Coward | about 5 months ago | (#47091157)

Really good analysis.

To make bitcoin secure, we need to think @ these problems before ahead.

BC is a black hole (0)

Anonymous Coward | about 5 months ago | (#47091227)

I realized the whole purpose of Bitcoin the other day:

It is nothing more than a massive energy sink designed to burn as many CPU-watts as possible to drive up the cost and use of electricity.
The other shoe dropping is when an EMP occurs (natural or otherwise) destroying both the Bitcoins themselves, and also the infrastructure to drive the technology itself.

Prove me wrong

Re:BC is a black hole (1)

PsyMan (2702529) | about 5 months ago | (#47091547)

How much "insert your own currency here" and its electronic backing would also not be wiped out by said EMP? You think all of your savings are neatly stacked in a vault somewhere to be withdrawn when the electricity goes off and spent as and when you wanted? If the electricity failed I guess your currency would also become pretty worthless. Give me a truckfull of food, water and seeds over a lump of inedible gold or pile of paper and ink any day, diamonds just get stuck in your teeth and are a tad uncomfortable when passing them out anway I should imagine. but they are nice and shiny.

Re:BC is a black hole (1)

ArcadeMan (2766669) | about 5 months ago | (#47092033)

It's going to take a really massive EMP to destroy my Bitcoin paper wallet.

wtf (2)

qwe123 (2443130) | about 5 months ago | (#47091455)

transactions which may have been used to intentionally manipulate the trading price

Isn't that exactly what trading is all about?

Re:wtf (0)

Anonymous Coward | about 5 months ago | (#47091651)

It isn't. All trades affect trading price, but that is supposedly a secondary function. The primary function of trade is an agreeable transfer of goods. If trades are carried out without their primary function, they exist solely for their secondary function, which is then called market manipulation.

The currency of choice for drug addicts (1)

Anonymous Coward | about 5 months ago | (#47092289)

Should we be surprised this fucked up with potheads at the wheel?

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