back to article MtGox boss vows to keep going despite $429 MILLION Bitcoin 'theft'

MtGox CEO Mark Karpeles has broken his silence to insist he has not "given up" on the failed Bitcoin exchange. Speaking as Japanese authorities launched a full investigation into the collapse, Karpeles said walking away “is not a part of how I usually do things”. However, although the CEO indicated he was still at home in Tokyo …

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Trollface

dum di-di dum dum

I'm sure that I saw a hollowed out volcanic island for sale off the coast of Japan recently.

Where's a white cat icon when you need one?

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Anonymous Coward

Re: dum di-di dum dum

How can anyone loose 750,000 of anything for 'years' and not notice?! Especially when it is effectively £500 notes. Talk about shoddy accounting.

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jai
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Re: dum di-di dum dum

well the system is designed to almost anonymise the transactions. i imagine that makes it rather difficult to reconcile, and even worse to audit after the fact.

but yes, you're right, they should have built the system to guard against this possibility. if they'd set it up correctly to start with, then they probably wouldn't have lost these amounts over the time. But to go in now and fix it is likely going to be a massive pain in the neck. glad it's not my job

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Re: dum di-di dum dum

quote: " Talk about shoddy accounting."

Quite the contrary. It was a brilliant bit of creatively criminal accounting. Do you know how hard it is to hide the loss of 750,000 of anything in a budget report in such a way that nobody notices?

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Re: dum di-di dum dum

" Do you know how hard it is to hide the loss of 750,000 of anything in a budget report in such a way that nobody notices?"

Just get it marked by the accountants as an "exceptional item", and everybody in the world pretends it is invisible. Which probably explains that "exceptional expenditures/losses" probably outnumber "exceptional gains" by about 900 to 1.

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Anonymous Coward

Re: dum di-di dum dum

Rubbish, the entire blockchain is public. Gox knows which addresses they have the private keys for. They know the total number of bitcoins in their custody.

If Gox had shown even the remotest shred of competence, they would have noticed that at some point over the years the theft occurred, their bitcoin balance was diverging from the total bitcoin liabilities of the exchange (e.g. they were operating a fractional reserve).

That they didn't notice this is criminally negligent. One of the -first questions- any complaince officer there should have asked was "Ok, so apparently we have 750k btc deposited. Do we actually own those bitcoins, and where are they?"

Utter fucktards.

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Re: dum di-di dum dum

"Ok, so apparently we have 750k btc deposited. Do we actually own those bitcoins, and where are they?"

That question depends on the accountants - and accountants are notorious for not asking questions that might embarrass the person paying them.

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Re: dum di-di dum dum

Compliance officer you say? Why would they possibly want/need one of those? It's not as though they are a regulated entity like a bank or recognised investment exchange.... Oh... Wait a minute....!

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GBE

Re: dum di-di dum dum

"How can anyone loose 750,000 of anything for 'years' and not notice?! Especially when it is effectively £500 notes. Talk about shoddy accounting."

This is a web site set up to allow nerds to trade "Magic The

Gathering" cards with each other.

Then somebody with presumably no background in banking, accounting, or finance decides to change it into an international bank. [Hey, how hard can it be to run a bank based on an untested currency model implemented in untested software?]

Add hundreds of millions in drug money; mix well; wait a few years.

Hilarity ensues.

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Re: dum di-di dum dum

This is the exchange that started life having people's passwords in clear text in the URL.

I suspect security and proper accounting were lower down his list of concerns than what colour toilet paper to have in the office toilets.

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Thumb Up

Re: dum di-di dum dum

@ GBE

I think you just won the internet, at least as far as this subject goes.

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Joke

Re: dum di-di dum dum

>dum di-di dum dum

What does this have to do with the Barney Miller (or I guess Dragnet if want to go even older school) theme song? (lol google it young uns)

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Re: dum di-di dum dum

If they were half the programmers they should have been, they would have wrote software that was auditing the entire flow of money/coins in & out. Checking the balance sheets vs outgoing and making sure everything was sound. Immediately throwing a switch if something wasn't adding up right. I guess we'll just write software that ships payments on repeat until we see the confirmation. That sounds like a great plan.

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Anonymous Coward

Re: dum di-di dum dum

*lose!!!!!

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admin@razorfishsolutions.com.hk

ER No……..

Simply put, he is 'claiming' that a shit load of money has gone missing

All BTC into and out of gox is tracked by the block-chain, so… if he is calming that the money was taken out.. let's see the relevant transactions and addresses.

There can be NO valid transaction unless it appears in the block chain.

let us also be clear that this is gox'es fault because transactions are ONLY valid if they appear in the block chain, the point has clearly been made many times that certain transaction fields can be altered prior to that to assist in the block being closed out and entering the block chain.

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R69

Death threats - WTF?

Without belittling the lossess people have suffered, like other corporate investors who lose their money because of somebody elses cock up, you just have to take this on the chin.

Death threats etc is not how this works - it is business unfortunately.

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Re: Death threats - WTF?

"Death threats etc is not how this works - it is business unfortunately."

The problem with that is that Mt.Gox has lots of contacts with a specific subset of business for which death threats and just death are common tools, and no, I'm not talking about defence contractors or insurance companies. ;-)

Upvoted your post anyway because speaking in more general terms I think you're right.

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Re: Death threats - WTF?

Indeed. Death threats, unless you have thoroughly hidden yourself online, may even result in you ending up facing criminal charges and imprisoned yourself.

The authorities may be investigating Mt Gox but I suspect there is very little they can do about the theft of an unregulated crypto currency that no government even recognises as a real currency. Perhaps a prosecution for data theft?

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Re: Death threats - WTF?

I say LET'S GET HIM...

....a hairless cat.

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Re: Death threats - WTF?

"Death threats etc is not how this works - it is business unfortunately."

True, but Bitcoin users feature a high proportion of criminals and people who don't understand how business really works.

That said, sometimes I'd like to see company directors taking a physical kicking in the wake of folding their company with a bunch of debts and walking away scott-free after carefully ensuring their Aston and holiday home is perfectly safe!

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Re: Death threats - WTF?

"The authorities may be investigating Mt Gox but I suspect there is very little they can do about the theft of an unregulated crypto currency that no government even recognises as a real currency. Perhaps a prosecution for data theft?"

Why would any self respecting techno-anarchist need or want help from the so-called 'authorities'? They are probably writing nano-viruses to hack the mainframe of the thieves as we speak.

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Anonymous Coward

Re: Death threats - WTF?

You're forgetting, it's a currency for criminals and geeks. Criminals are nasty and geeks are often hard knocks when they're sat behind their computer.

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Re: Death threats - WTF?

"That said, sometimes I'd like to see company directors taking a physical kicking in the wake of folding their company with a bunch of debts and walking away scott-free after carefully ensuring their Aston and holiday home is perfectly safe!"

In the 19th Century, after a series of insurance companies failed, Punch magazine suggested that hanging the directors of the next one to collapse would ensure a bit more thought about managing the companies well.

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Re: Death threats - WTF?

Quite.

The only good thing to ever happen in North Korea and idea worth exporting was when the executed the minister who attempted to reform the currency and failed.

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Re: it is business unfortunately.

And when you deal with rational investors with fully disclosed business details you don't get that.

But this was neither rational investors nor fully disclosed business details.

The non-criminal "investors" are mostly from the kook conspiracy fringe. Their rage is barely contained at the best of times and for them death threats over the internet are a sort of cathartic release. The business details weren't fully disclosed because the whole MtGox thing was catching lighting in a pan. The people starting it didn't have the first clue and were quickly in way over their heads. But hey it was all working and they were raking in the dosh, so they went all Alfred E Neuman. Besides, a significant part of their business was from people who don't exactly want fully disclosed business details, cause that might alert Interpol et al. to what's up.

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Re: Perhaps a prosecution for data theft?

You should still be able to get them on property theft. Even if it isn't currency it is something they owned.

Of course that presents a different issue to the Bitcoin fanatics. The whole point of Bitcoin is to escape government involvement. If the government can track and prosecute for theft of Bitcoin, they can do a whole lot more to it as well.

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Anonymous Coward

It was Alex Salmond, it's how he plans to fund an independent Scotland.

So a bit like the rest of his plans the funding is built on a house of cards ready to collapse at any time.

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Anonymous Coward

I for one welcome our new overlord that will soon be president of the Republic of Scotistan....

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Facepalm

<sigh>

I've been thinking lately that we ought to have a variant of Godwin's Law, to cover the fact that, sooner or later, every online discussion nowadays seems to include a sarky comment about Salmond specifically or Scottish independence in general.

First names that came to mind were North Berwick Law and Denis Law, but I suggest Rubi's Law, because that's an area of Aberdeen most famous for a f--king great hole in the ground.

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Anonymous Coward

Twitcoin? mind you, Twitter would stop that.

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Bitcoin may be a house of cards, but in my opinion it may be a marginally better basis for a nation's financial plans than a currency union with a country who has said they won't have a currency union with you....

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As Salmond himself said,

GBP is an internationally recognised currency and anybody can use it for their transactions.

An independent Scotland is welcome to use it if they want to.

If he thinks he can have any control over it then he's sadly mistaken, because that's simply not going to happen.

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Anonymous Coward

Re: As Salmond himself said,

"If he thinks he can have any control over it then he's sadly mistaken, because that's simply not going to happen."

Yeah, not even England has control over it. That was ceded to the banksters ages ago.

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Boffin

Re: As Salmond himself said,

@Richard 12 - Yes it's widely banded around that "they can't stop us using Sterling even if we have no currency union". Sounds great to the pro-yes supporters in rallying support.

Well, in theory at least. In practical terms using any foreign currency without a currency union would be fraught with difficulties.

On a day to day basis the pound in the pocket would continue without any problems. However all major currencies have controls in place on larger transaction to limit fraud and money laundering (£10,000 in the UK) and this then places controls in the hands of the UK treasury for the legitimate routing of the (electronic) transaction. These are enforced through SWIFT in Europe, so you can't escape the electronic controls. Transactions would therefore require routing through an rUK regulated bank, which would introduce international transaction charges, could introduce delays through international AML controls and might even lead to tax liabilities in foreign jurisdictions if the laws aren't amenable.

Cash does potentially avoid the problem, so perhaps a black economy in laundered Sterling notes is what the Scottish government would like to see...

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Anonymous Coward

ShitCoin surely?

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Mushroom

Ironic

The <ahem> services that are being sought by disgruntled Mt. Gox users are exactly those that were offered by some through Silk Road. Even with the marketplace being replaced, they're going to have a hard time hiring hitmen without access to their Bitcoin wallets. Maybe a contigency contract is in order - you know, if you beat my money out of Karpeles you can keep half kind of deal.

Of course the dodgy element that likely lost the large majority of the funds 'missing' at Mt. Gox are likely to extract their funds, everyone elses funds, and various body parts from Mr. Karpeles well before any independent effort gets off the ground.

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Re: Ironic

get your facts right. silk road specifically prohibited the sale of services/items designed to harm other people.

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Re: Ironic

Silk Road, that paragon of virtuous activities huh.

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Facepalm

Re: Ironic

@emmanuel goldstein

You are quite correct of course. The Silk Road administrator had such strict rules about harming others that he allegedly tried to hire hitmen to kill at least two people. Whatever your thoughts on the site it was not a Disney attraction.

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Happy

Re: Ironic

"Whatever your thoughts on the site it was not a Disney attraction."

"Welcome to our newest attraction, the Dope-o-rama!!!"

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Re: Ironic

>"Welcome to our newest attraction, the Dope-o-rama!!!"

Best of all the ride doesn't even have to move.

http://www.fakeposters.com/posters/drugs-amazing/

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Anonymous Coward

I did not lose my Bitcoins, but I did have them stored for a short while at Mt.Gox. When people were starting to have trouble cashing in their Bitcoins from Mt.Gox, I moved mine to my computer. Of course, then when Silk Road 2 got hacked, I lost some there too...

AC for obvious reasons.

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Anonymous Coward

NERDS!!!!!

What *I* find strange is that a company whose name is an abbreviation of "Magic: The Gathering Online eXchange" goes under, and all anyone is asking about are these weird things called Bitcoins? Bit-*WHAT*?!

I have over 250 "Magic: The Gathering" cards in an account with those bastards, including the "Shadowmage Infiltrator", "Black Orchid" and "Dwarf Carrying a massive two-headed axe" (*). The whole lot must be worth approaching £73. Will I ever see any of them again, or have they run off to Bermuda with 2000 copies of "Warrior princess in metal bikini armour" (**) and a 17 1/2-sided dice? (***)

(*) That last one being from the ultra-rare "Cliches of fantasy artwork" series.

(**) Which inconveniently leaves her bare midriff completely exposed. Er, that one's also from the "Cliches of fantasy artwork" series....

(***) Don't care if I'm getting mixed up with Dungeons and Dragons or not here :-P

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Anonymous Coward

Enough with the illegal money thing

"Mt. Gox is likely to be packed full of dodgy money."

HSBC:

Despite HSBC Mexico (HSMX) operating in a country "under siege from drug crime, violence and money laundering" it had inadequate money laundering controls. Between 2007-8, for example, HBMX shipped $7bn to HSBC's US operation, more than any other HSBC affiliate.

US laws prevent banks doing business with what it regards as the most dangerous individuals and countries. HBUS carried out 28,000 undisclosed sensitive transactions between 2001 and 2007, an internal audit commissioned by the bank found. The vast majority of those transactions - worth $19.7bn - involved Iran.

Between 2005 and 2008, HBUS cleared $290m worth of US dollar travellers' cheques which were being presented at a Japanese bank. The daily transactions were worth up to half a million dollars, with large blocks of sequentially numbered cheques being handed over.

If you want to talk about dogey money and illegality, talk to the multi-national banks, HSBC is just one example. Some Bitcoin transactions are undoubtably money laundering, but, as with traditional banking, not everything crypto currencies are trying to do is illegal.

It is to the advantage of the current financial and political systems that the status quo is maintained and much of the bad publicity is to help reinforce the idea, in the general public's mind, that new ways of doing things are bad.

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Re: Enough with the illegal money thing

It's not that our official institutions have the moral high ground on this - it's more they don't want the competition.

Actual death, never mind threats, seems to have become a popular hobby for a worrying number of mainstream bank employees recently.

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Consider themselves lucky

> $429 MILLION Bitcoin 'theft'

... that BTC value has dropped from its kilobuck+ highs. Otherwise the losses would have been much bigger. Errrrm, hang on .... does it work like that?

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Re: Consider themselves lucky

Considering that the crash is largely a result of Mt Gox's woes, I'd have to say no.

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All

All your Bitcoin are belong to us.

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Re: All

429 million BTC

That's over 9000!!

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Reinforces my view...

... that there is likely to be no point in the average person ever bothering with BitCoin or any of the other crypto-currencies

No advantages for most of us, lots of disadvantages.

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