Weekend Economists Ring in the New! New Year 2015

[Demeter]

49. Japan's Police Suspect 99% of Mt. Gox Bitcoins Missing from Fraud, Not Transaction Malleability Hack

https://www.cryptocoinsnews.com/japanese-police-suspect-99-of-mt-gox-bitcoins-missing-due-to-fraud-not-transaction-malleability-hack/

The joint Japanese and American government investigation into the whereabouts of supposedly stolen Mt. Gox bitcoins has announced a key discovery. The Japan News, Japan’s largest English language newspaper, is reporting that fraud is the cause of the “disappearance of 99% of Mt. Gox bitcoins.” According to sources in the Metropolitan Police Department (MPD), only about 7,000 Gox bitcoins were lost due to cyber-attacks.

The remaining 99% of the missing 650,000 bitcoins is “highly suspected” of disappearing during a period when Mt. Gox was being fraudulently run by an unknown party.

The Enigma of the “Stolen” Mt. Gox Bitcoins

The total amount of missing bitcoins, and the associated damage to Mt. Gox’s former users, has not changed. Rather, the community is a little bit closer to closure in the case of Mt. Gox, the centralized Bitcoin exchange that helped Bitcoin rise then damaged it so much with its implosion. Since the downfall of Mt. Gox, the Bitcoin community has continually speculated that fraud, not theft, was the reason for the fall of the company. Mt. Gox originally stated that it had lost 850,000 bitcoins as a result of transaction malleability related “leaks” to their cold wallet storage. The same cold wallet storage that Mark Karpeles has stated he could not reliably access. Shortly after the initial announcement, Karpeles and Gox “found” 200,000 bitcoins. Mark Karpeles broke this news weeks after the Bitcoin community had already noticed large chunks of bitcoins moving that could only have been under the control of Mt. Gox.

According to the lawyer, they found them on the 7th of this month by searching through a storage on the internet called a “wallet” which was being used by MtGox up until June 2011.

Across the world, former users of Mt. Gox have banded together to seek legal action against the Japanese company in hopes of getting some of the recovered Gox bitcoins...