For many Bitcoin enthusiasts, 2014 has revolved around the Mt.Gox drama that surround the beloved digital currency, and remains on the key references when explaining Bitcoin to novice users. I for one, hope to never mention Mt. Gox in face-to-face conversations again in 2015. Unfortunately, that is as likely to happen as me winning the lottery. We might as well get the Mt. Gox news out of the way on the first day of 2015, shall we?
The Japan News broke an interesting story earlier this morning (depending on your timezone in the world, that is) about Mt. Gox. For those of you who have never heard of Mt. Gox before, it was one of the biggest Bitcoin exchanges, where users could buy and sell the digital currency in exchange for fiat currency. However, Mt. Gox was plagued by many issues over the past year of its existence, including withdrawal delays for European customers of up to 8 weeks.
In February of 2014, disaster struck, as Mt. Gox was taken offline after “losing”, and I use that term very loosely, roughly 650,000 bitcoins due to “cyber attacks”. Let’s get this out of the way first folks : no one bought that story, at all. Everyone knew someone inside the company got greedy and decided to sluice away Bitcoin funds. A lot of people pointed the finger of blame at Mt. Gox CEO Mark Kerpeles, who is still one of the most hated people in the world of cryptocurrency to date.
However, it still has not been officially proven who caused all of the funds to be removed. But according to sources in the Metropolitan Police Department, 99% of the missing coins disappeared after the Mt. Gox system was fraudulently operated by an “unknown party”. While I once again use that term loosely, we can not speculate at this point in time as to who could be behind the attack.
Only 1% of the total amount of Bitcoins lost, equaling to roughly 7,000 BTC, were stolen due to a well-organized cyber attack against Mt. Gox. While 7,000 Bitcoin, which is worth over US$2,000,000 as of this writing, is no chunk change by any stretch of the imagination, it’s just the tip of the iceberg.
The remaining 643,000 Bitcoins, which were maliciously removed by this “unknown entity”, are worth US$205,300,000 at the time of writing. It would not come as a surprise that quite a bit of these coins have been dumped across several exchanges over time, but one cannot be certain about how many are still sitting in a Bitcoin wallet somewhere, waiting to be found or cashed out.
As the Mt. Gox investigation by the Metropolitan Police Department continues, they are allegedly suspecting a person familiar with the exchange system to have misappropriated bitcoins of the company’s customers. If this would be the case, it would confirm everyone’s suspicions of the Mt. Gox “lost bitcoins” being an inside job.
What are your thoughts on the story? Leave a comment below!