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Bitcoin Businesses Security The Almighty Buck

The Tangled Tale of Mt. Gox's Missing Millions 191

Posted by timothy from the when-things-go-wrong dept.
jfruh writes "What went wrong to produce the spectacular implosion of bitcoin repository Mt. Gox? Well, according to some preliminary investigation from the IDG News Service, pretty much everything. There was a lack of management oversight and 'culture,' the code running the site was a mess, and the CEO seemed more concerned about his plans for a 'Bitcoin cafe' than he was about his Japanese bank closing the company's account."
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The Tangled Tale of Mt. Gox's Missing Millions More

The Tangled Tale of Mt. Gox's Missing Millions

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  • "Sight"? On slashdot? (Score:5, Interesting)

    by mikael_j ( 106439 ) on Saturday March 08, 2014 @10:25AM (#46434195)
    Really?

  • The Sight? (Score:4, Funny)

    by Anonymous Coward on Saturday March 08, 2014 @10:31AM (#46434217)

    Oh, my soar eyes.

    • There doing they're best! (Score:3, Funny)

      by Anonymous Coward

      The editors have a ruff job. Them have two get those articles up in time for us too sea abd meat there quota. Working four Dice must bee really hard considering that there job cold be sent oversees at anytime!

    • Re: (Score:2)

      by Chas ( 5144 )

      Probably better than soar ayes.

  • Shouldn't it be understood... (Score:5, Insightful)

    by TWX ( 665546 ) on Saturday March 08, 2014 @10:31AM (#46434221)
    ...that all scrip currencies are going to find themselves subject to attack from all sides? Wasn't it obvious that governments are going to have a problem with it due to a lack of ability to regulate/tax, banking systems are going to have a problem with it due to their not having a role in something that could be lucrative, and criminals are going to be interested in exploiting the lack of government oversight in order to either profit through its use or through outright theft?

    A coworker previously had sang the praises of Bitcoin, but it sounded like he was approaching it from a stock market speculation angle, as in the more it grows the more he was interested. This wasn't long before it started making the news big-time, and like all bubbles, once everyone is involved it usually means that it's time to get out. And also like other bubbles, it has started experiencing the bursting that kills value.

    Bitcoin is interesting, but for something so libertarian requires way too much third-party interaction in order to practically use it, and those third-party gatekeepers are the perfect targets.

    • Re:Shouldn't it be understood... (Score:5, Insightful)

      by gmuslera ( 3436 ) on Saturday March 08, 2014 @11:01AM (#46434305) Homepage Journal

      And if you don't want to rely in third-party gatekeepers, how most people will use it? In your phone? in your (for the majority, windows) pc? You can't use gatekeepers because a lot got hacked or just run with the coins, and you can't have them yourself because the most used platforms are ripe for external exploit, either making the user do something or just making popular good looking trojans.

      And if that insecurity is not enough, having over that government sponsored weakened encryption algorythms and mandated backdoors don't help a lot.

      We are still not ready for a distributed digital money in those terms.

      • Re: (Score:3)

        by TWX ( 665546 )
        It also doesn't help that Bitcoin, in of itself, has no intrinsic value, and it can be argued that as far as real-world value goes it's actually a detriment as it takes fairly significant resources to run the computers to competitively generate bitcoins and it's possible and even quite likely that people will lose their private keys and thus will lose access to bitcoins.

        Money relying on specie that is also itself a valuable material for manufacturing will at least maintain the value of exchange for that

        • If you have specie based money (the gold standard) then you are limited in the amount of money (ie resources) you can have in circulation which limits the size of the economy which means that economies cannot grow exponentially which means that bankers can't get really, really rich which means that the entire artifice of the current world falls to pieces.

          Why do you hate America?

          • Re: (Score:2)

            by TWX ( 665546 )
            I don't actually want a specie-based economy, as either the value of the specie has to fluctuate with the value of the currency, or else as you state, the amount of money in circulation is limited.

            I prefer the other option I discussed for this very reason.

          • Re: (Score:3)

            by dbIII ( 701233 )
            That's a plot spoiler for a very long trilogy of Neal Stephenson books :)

        • It also doesn't help that Bitcoin, in of itself, has no intrinsic value, and it can be argued that as far as real-world value goes it's actually a detriment as it takes fairly significant resources to run the computers to competitively generate bitcoins and it's possible and even quite likely that people will lose their private keys and thus will lose access to bitcoins.

          So, it costs nothing to create a new wallet. Considering your regular online banking scenario which is vulnerable to all the same exploits, It's quite secure enough and far more economical to transfer some money into Bitcoin and send it to someone else who converts it back into the currency of their choice rather than pay a wire transfer fee. That is the value of Bitcoin to me.

          I'll also point out that the Bitcoin generation is incentive to sign the transactions, and the generation of Bitcoin will stop. W

          • Re: (Score:2)

            by TWX ( 665546 )
            It costs nothing to create a new wallet? What kind of argument is that? It's the contents that matter, not the wallet itself. If one loses access to all of one's accumulated wealth then one is done for.

            At least the banks, the FDIC, and the NCUA guarantee the money of depositors in the event of a banking system problem. If they didn't then no one would keep their money in banks

      • Also with a phone size is an issue (Score:4, Interesting)

        by Sycraft-fu ( 314770 ) on Saturday March 08, 2014 @05:14PM (#46436105)

        The blockchain is currently about 15GB, and grows every time there's a transaction. That's a problem. Most phones don't have 15GB of free space. You'd have to get an SD card, just to hold it and that is only a temporary solution, since it'll keep growing.

        Also this would be a real problem if BTC was actually used like a major currency and not just played with by speculators as the number of transactions would be orders of magnitude higher, and thus so would the growth.

        So it would be totally unrealistic to just store it on mobile devices, which is something you'd probably want to do if you were going to use it as a general purpose kind of payment system, security issues aside and those are not minor.

        • The blockchain is currently about 15GB, and grows every time there's a transaction. That's a problem. Most phones don't have 15GB of free space. You'd have to get an SD card, just to hold it and that is only a temporary solution, since it'll keep growing.

          Also this would be a real problem if BTC was actually used like a major currency and not just played with by speculators as the number of transactions would be orders of magnitude higher, and thus so would the growth.

          So it would be totally unrealistic to just store it on mobile devices, which is something you'd probably want to do if you were going to use it as a general purpose kind of payment system, security issues aside and those are not minor.

          The Blockchain is over 17GB now. Your post doesn't account for SPV clients, Block pruning, off chain transactions, technological memory advancements, ect... The problem isn't a large concern because smart phones now use hot wallets or SPV clients and home computers can run the full nodes. When the blockchain grows to 30GB or larger the developers will start introducing Merkle Tree pruning solutions that were discussed originally all the way back to the whitepaper.

          • A couple of years ago when I first read the bitcoin whitepaper and was very impressed and excited (how can you read that and *not* be impressed and excited?) I proposed a slight change to the bitcoin protocol to add support for messages querying for "elided" blocks, i.e. a means for querying a peer for blocks only relevant to a given transaction (the history of all addresses relevant to and leading up to that transaction). The elided blocks would just be the full details necessary to allow a client to valid

            • (on paper of course, I never sold them and I don't really think it's possible to actually liquidate bitcoins into real money without serious work and headache).

              Your post was interesting up until the point of the end and than became became puzzling. If you wanted to liquidate those bitcoins easily you could:

              1) Spend the directly with Overstock.com or tigerdirect.com

              2) Buy one of hundreds of gift cards with gyft or egifter for free

              3) Setup a coinbase.com account (easier to setup than paypal) and ACH them to USD fiat into your bank account with one click

              • Sorry, shows how ignorant I am of how things have progressed in the bitcoin world after having stopped participating a couple of years ago. I was under the impression that turning bitcoins into anything else was difficult, but obviously I am not well informed. I tried selling a couple of fractional bitcoins on eBay and just got scammed (losing about $200 worth to thieves with stolen accounts). That's all I've done to try to liquidate them. I'll investigate the options you mentioned, thanks.

        • Re: (Score:2)

          by Rich0 ( 548339 )

          Also this would be a real problem if BTC was actually used like a major currency and not just played with by speculators as the number of transactions would be orders of magnitude higher, and thus so would the growth.

          I think this is a real problem that needs a solution if BTC is ever going to take off. I too was shocked the first time I installed a bitcoin client and saw just how much space it needed to store the block chain. It wasn't the end of the world on my system, though if this were a laptop with an SSD it might cause concerns.

          However, the transaction volume for bitcoin is minuscule compared to real-world currencies. If every time anybody anywhere bought a can of soda there were a record in the database, it wo

    • Re:Shouldn't it be understood... (Score:4, Interesting)

      by zippthorne ( 748122 ) on Saturday March 08, 2014 @11:09AM (#46434317) Journal

      Wasn't it obvious that governments are going to have a problem with it due to a lack of ability to regulate/tax,

      No, just the opposite in fact, because of the block chain. It's clearly more trackable than regular money. Governments might oppose it, but not for this reason.

      banking systems are going to have a problem with it due to their not having a role in something that could be lucrative

      Yes, this is obvious. The problem with bitcoin for banks is that inflation is mathematically defined - they can't just print more on a whim, they have to actually do something to generate more.

      I imagine it is possible that a bank-designed crypto currency could have properties that are favorable to the banks in this way, but I think those might have a hard time gaining adoption. We've already got a currency that robs its holder of 2% of its value every year by design, why would we need another?

      criminals are going to be interested in exploiting the lack of government oversight in order to either profit through its use or through outright theft?

      Did you not already mention bankers? Non-banker criminals who are wise will stay well away from anything that has a list of all transactions ever associated to it by design. I think that we probably want criminals to choose crypto currency because they will be easier to prosecute!

      Wise criminals probably just go into banking.

      • Non-banker criminals who are wise will stay well away from anything that has a list of all transactions ever associated to it by design.

        This is misguided at best. Bitcoin transactions are not reversible, so unlike credit card/bank account fraud, the criminal can directly profit. In most cases, the theif is not in a jurisdiction that particularly cares, and their only impediment is finding a money mule with credentials to receive the money and re-transmit it in a non-reversible way (Western Union). I guess at least bitcoin protects the people who fall for Nigerian money mule schemes...

      • Re: (Score:2)

        by TWX ( 665546 )
        The block chain does not have names associated with it. Governments may well know that transactions have occurred, but they do not necessarily know who made the transactions, nor is there a method by which to automagically pay any required taxes during the transaction itself.

    • Presiding over it all was CEO Mark Karpeles, who uses the online moniker MagicalTux. The attendant image of Karpeles as a stage magician may now inflame Mt. Gox customers who suspect their losses are due to sleight of hand, not sloppiness or outside thieves.

      I make exchange sight
      I get beetcoin
      I get more beetcoin
      I get some more beetcoin
      some more ....
      and .. POOF .. it's all gone ..
      Thank you come again

      • Re: (Score:2)

        by Chas ( 5144 )

        One for you.
        One for me!
        Two for you.
        One, two for me!
        Three for you.
        One, two, three for me!
        Four for you!
        One, two, three, four for me!
        Five for you.
        One, two, three, four, five for me!
        Six for you.
        One, two, three, four, five, six for me!
        Seven for you. ....

        I trust you can see where this is going.

    • Buy all you can. :)

      The only thing that cannot be fudged is that we cannot make. Gold keeps it's spending power over long stretches of time.

      • Re: (Score:3)

        by Mashdar ( 876825 )
        Right. The value of gold is based on supply and intrensic industrial value. 95%+ of the value of gold is purely speculative. Just because it is shiny and limited does not make it safe. Anything used as a currency is going to have an artificial value far in excess of its tangible value. Hope you didn't buy in 1980, or you are still missing half of your money. http://commons.wikimedia.org/w... [wikimedia.org]

  • I don't want to be a spelling nazi but... (Score:3, Informative)

    by 140Mandak262Jamuna ( 970587 ) on Saturday March 08, 2014 @11:01AM (#46434307) Journal

    the code running the sight was a mess,

    is particularly irritating.

  • Learning from history (Score:3)

    by sphealey ( 2855 ) on Saturday March 08, 2014 @11:10AM (#46434321)

    I believe it was the Medici family which first documented the need for bank regulation in the 1500s, although it is possible that other civilizations with extensive merchant activity may have realized that earlier but not left records. Bank and banking system failures in the 1600s, 1700s, 1800s, and early 1900s led all nations with large merchant, industrial, and financial economies to pass and implement banking regulation, oversight, and auditing requirements.

    Bitcoin? "Freedom!"

    sPh

  • Bit coin is highly misunderstood by many (Score:5, Interesting)

    by 140Mandak262Jamuna ( 970587 ) on Saturday March 08, 2014 @11:23AM (#46434349) Journal
    Most people think bitcoin is an anonymous digital cash, totally untraceable. But the basic fact is, bitcoin is the very opposite of anonymity. All the transactions of all the people are public and is verified by multiple entities. Bit coin blocks are like pages of a bank ledgers and multiple copies of are floating around the world, copied and replicated.

    The only anonymity the users have is the notion, these bitcoin wallets exist only in the bitcoin universe and it can not be linked to real life entities. This is a big assumption to make. Whenever bitcoin universe intersects real universe there is potential for the anonymity to be broken. A vendor delivering goods maintaining records like "bitcoin wallet xxx placed order for yyy delivered to address zzz" will link the wallets to real identities and clues.

    I thought "These blocks go well into the past, so people who have conducted illicit transactions in the past also have their wallets linked to the transactions. These can not be erased or modified. Multiple copies of the blocks exist. So the law enforcement can catch them years from now". More informed slashdotters explained that those "expired" blocks have been purged from most miners. Only their final checksums were carried forward. So past transactions to buy drugs or something can not be decrypted.

    But NSA and other agencies have been sucking up internet traffic like a giant vacuum. They know more about the value of the blocks being validated (Mining is a misleading term. Mining is repeatedly validating the block till the checksum meets a criterion). Those blocks exist in the vault.

    So yes, every time a drug dealer or a hired assassin gets nabbed and his/her bitcoin wallet gets decoded, all the wallets that dealt with him will be recovered. The web will grow. There is potential for a very large number of people to be caught by the law years after their "illegal" activity happened. If it is a time bound offense they might be lucky. But there is no statuette of limitation for murder and other higher felonies. Bitcoin blocks might turn out to be a huge law enforcement tool after all.

    But most likely to catch illegal downloads than drug dealing, given the tenacity and connections of MPAA and RIAA.

    • Agree. The ratio of people talking about Bitcoin to people who know *anything* about how it works is astounding.

      More informed slashdotters explained that those "expired" blocks have been purged from most miners.

      When I first read the details of the Bitcoin system, this is the point at which I got a gigantic sinking feeling in my chest.
      The documentation said, "Look, we keep a distributed record of all bitcoin transactions!", and I said,
      "Well that does make it vulnerable to law enforcement, but that means i

      • oh...and the idea that someone might have been throwing the daily blockchain into a git repos probably never occurred to anyone, not even developers or exchange makers or government agencies whose job it is to track everyfuckingthing we do on the net.

        like you said...
        "..."

      • "And then after a while we throw those records out." "...so all I've got to do is conceal my theft until the records get purged?" "Pretty much!" "..."

        This is factually incorrect. Transaction pruning or using Simplified Payment Verification clients like electrum only is an option for those not wanting to run a full node and download the whole blockchain. Many run full nodes and there will alway be distributed full records of all transactions.

      • Re: (Score:3)

        by mysidia ( 191772 )

        "And then after a while we throw those records out."

        No... the full Blockchain contains every transaction ever made.

        Not every Bitcoin client needs to download the full blockchain, which is what he must have been talking about.

        The Bitcoin network doesn't "forget" the details of transactions --- the record is indeed permanent.

    • Doesn't this story of MtGox completely invalidate the idea of Bitcoin? It was made to appear safe due to an algorithm, but obviously it can disappear without a trace and then what? There was never any sovereign authority behind that currency. Thus no international muscle to go track down the bad guys or figure out what happened. If anything, the international banking community will simply say "told you so..."

      • Doesn't this story of MtGox completely invalidate the idea of Bitcoin? It was made to appear safe due to an algorithm, but obviously it can disappear without a trace and then what? There was never any sovereign authority behind that currency. Thus no international muscle to go track down the bad guys or figure out what happened. If anything, the international banking community will simply say "told you so..."

        Exactly the opposite. Mtgox's failure stresses the need for the original purpose of Bitcoin; removing the need for counter-party trust. Storing your assets in any third party or hot wallet goes against the intention of the Bitcoin protocol and is foolhardy. Bitcoin is just as susceptible to being stolen by con artists, governments, and corporations as greenbacks are. Some users learned the hard way that Bitcoin is as safe or dangerous as you choose to make it.

        • Doesn't this story of MtGox completely invalidate the idea of Bitcoin? It was made to appear safe due to an algorithm, but obviously it can disappear without a trace and then what? There was never any sovereign authority behind that currency. Thus no international muscle to go track down the bad guys or figure out what happened. If anything, the international banking community will simply say "told you so..."

          Exactly the opposite. Mtgox's failure stresses the need for the original purpose of Bitcoin; removing the need for counter-party trust. Storing your assets in any third party or hot wallet goes against the intention of the Bitcoin protocol and is foolhardy. Bitcoin is just as susceptible to being stolen by con artists, governments, and corporations as greenbacks are. Some users learned the hard way that Bitcoin is as safe or dangerous as you choose to make it.

          Worse. Let's say that you accept Bitcoin payment years from now and it turns out that that money was part of the MtGox heist. Congratulations, you've now received stolen property, which in many jurisdictions means that it may be taken away from you at any moment, all quite legally.

    • Re: (Score:3)

      by AmiMoJo ( 196126 ) *

      The anonymous aspect is that when you mine Bitcoins you can do so anonymously. It isn't very practical any more as you need to be part of a pool to stand much chance of actually earning many, but in theory you can create them in an untraceable way (with the usual caveats about using Tor properly etc.)

      You can also spend them anonymously if it is only on stuff that doesn't require anyone to know your identity or interact with you, so basically donation. Might indirectly benefit you, such as a fund to have som

    • >. All the transactions of all the people are public and is verified by multiple entities

      Oh really? So you know *all* the principle entities of Mt. Gox? You know just where they were storing/investing that HALF A BILLION DOLLARS ? You know the names of the independent accounting agency that oversaw that HALF A BILLION DOLLARS ?

      You know none of that and very little else.

      Why who ever would have thought that when you give have a f!@kig BILLION dollars to a more than less anonymous source(s) by anonymous
      • Every bit of bitcoin that ever passed through MtGox can be tracked, can be tracked both downstream from MtGox easily and can be tracked upstream too with some minor difficulty. But the trail will start and end in Bitcoin private keys and the user ids associated with those keys. If MtGox is a government regulated bank, if it has enforcement powers and subpoena powers it will be able to find the actual offenders and recover the money.

  • I have no more sympathy for anyone (Score:5, Insightful)

    by oscrivellodds ( 1124383 ) on Saturday March 08, 2014 @11:27AM (#46434379)

    who has lost real money by "investing" in Bitcoins than I have for anyone who lost real money by "investing" in beany babies. Like my momma always told me, "stupid is as stupid does".

    • To be fair, beanie babies didn't have a limited production. When they flooded the market to where McDonalds was giving them out with happy meals, that was their demise. If they would have kept or even lowered production instead, they still might have value.

      • to be fair? You have misunderstood the fundamental concept of value. Limited production of something does not automatically confer value.

        For an extreme example that illustrates the point, I produce a very limited amount of poop each day, and after I die, there will never be any more of my brand produced, yet no one wants to pay me for it. As rare as it is, no one seems to think it has value, and other than as fertilizer for maybe one or two plants, they are correct.

        Beany babies, like bitcoins, had no val

        • They had collector value. Just like old stamps and medieval scrolls have value. You can twist the definition of "value" into anything you want, but you aren't looking as smart as you think you are. The demand of beanie babies far outweighed their supply. When that wasn't true anymore, the value tanked. There is no psychological MBA horseshit here. Like an overpowered Magic The Gathering card, it's value is high, but if you decide to give one away free with a self-addressed, stamped envelope, it will be noth

          • Comparing beany babies to old stamps or medieval scrolls is just silly. Beany babies were nothing special in any way, they had no historical significance, no utility, no rare or exotic materials, no special workmanship, and were mass produced as fast as they could be sold to "investors". It would be more realistic to compare them to the "rare, limited edition" plates with pictures of Elvis and similar junk that Franklin Mint churns out.

            The only difference between beany babies and my poop is that beanie b

    • Re: (Score:2)

      by mysidia ( 191772 )

      It's fine. You have no duty to sympathize for people who took a big risk and lost, on the other hand, if you withhold sympathy, then you have no right to envy those who took a big risk and succeeded.

      Personally... I think Bitcoin represents many huge opportunities. Not in buying coins, though.

      It represents an opportunity for businesses to accept coins as payment for goods or services (that they promptly convert back to fiat dollars).

      Since there are so few good Bitcoin-related businesses, and ther

      • Characterizing an "investment" in bitcoins as a big risk is being very generous. Bitcoin was designed from the start to be a vehicle to steal from those gullible enough to convert real money into it.

        I have a better investment idea- send me your money and I absolutely guarantee that you'll get 1/2 of it back. That's a better deal than you'll get with bitcoin! Does bitcoin offer a guaranteed return? Of course not.

        • Re: (Score:2)

          by mysidia ( 191772 )

          Characterizing an "investment" in bitcoins as a big risk is being very generous. Bitcoin was designed from the start to be a vehicle to steal from those gullible enough to convert real money into it.

          You begin to sound like one of those Fragilistas [bloomberg.com]. That might be why Mt.Gox was started; I don't know. But there are some significant advantages to antifragile systems such as the Bitcoin protocol.

          Did you even READ Satoshi's paper?

          What gives you the right to say 'Bitcoin was designed as a vehicle to steal'

          • >What gives you the right to say 'Bitcoin was designed as a vehicle to steal' ?

            I'm guessing that it has something to do with the fact that you are giving your hard-earned money to an unknown source to be looked over by unknown people by unknown means???

            Hey but that's just me - please feel free to send me any extra money that you have and I'll be sure to protect it for you and even give you a return on your investment when the price goes up! Hey - whata deal

            • Re: (Score:2)

              by mysidia ( 191772 )

              I'm guessing that it has something to do with the fact that you are giving your hard-earned money to an unknown source to be looked over by unknown people by unknown means?

              Perhaps that would be a bad decision, and those considering it have done more research to turn 'unknowns' into knowns.

  • Turns out those evil corporate bankers with their evil statist money turn out to have some useful skills. Like, they know how to prevent the theft of a good chunk of all the money in their world. Apparently it involves boring stuff like spreadsheets and regulations and corporate hierarchy rather than algorithms, so that's kind of a drag, but so it goes.

  • "Tokyo police are now scratching their heads. "The National Police Agency seems to lack the ability to analyze the bitcoin trading history of Mt. Gox," a government official told a source probing the investigation."

    that's not a bug, it a feature.

    • Re: (Score:2)

      by Kaenneth ( 82978 )

      I swear the Japanese police 'scratch their heads' so often, they should be checked for lice.

  • what a coincidence! (Score:3)

    by slashmydots ( 2189826 ) on Saturday March 08, 2014 @12:16PM (#46434565)
    Hey, what a coincidence! My company is doing poorly because it's run by incompetent idiots too! Small world, huh?

  • around July 2013, Bitcoin entrepreneur Roger Ver visited Mt. Gox's Tokyo headquarters. He published a video saying he believed the company's withdrawal problems were caused by the "traditional banking system, not because of a lack of liquidity at Mt. Gox."...

    In an email interview last week, Ver recalled his meeting with Mt. Gox: "I watched him [Karpeles] log into his online bank account in real time and saw the balances with my own eyes. They had a huge amount of U.S. dollar liquidity at that time."

    Yea, that's how a CPA would conduct an audit. No chance of anything sketchy going on with that kind of oversight.

  • Spaghetti code? (Score:3)

    by mveloso ( 325617 ) on Saturday March 08, 2014 @01:59PM (#46435109)

    "Spaghetti code" is what developers say when they're confronted by code that exceeds their capacity to understand complexity.

  • Total lack of controls (Score:5, Interesting)

    by Animats ( 122034 ) on Saturday March 08, 2014 @03:56PM (#46435729) Homepage

    The main problem with Mt. Gox was not that the code was a mess. It was a lack of basic financial controls. Mt. Gox lacked a chief financial officer, a controller, inside auditors, outside auditors, a board of directors, an audit committee, and a compliance officer. Yet they were doing a billion dollars of transactions a year. It's not even clear that they have a general ledger listing all transactions. Lack of financial controls is usually considered an indicator of fraud. I've been making this point on bitcointalk for the last year. None of the "Bitcoin exchanges" have proper financial controls. None have an outside auditor and published audits. Yet they're handling far too much money to operate that way.

    As for "The National Police Agency seems to lack the ability to analyze the bitcoin trading history of Mt. Gox", that seems to be correct. One would think that the Japanese National Police Agency would have a cyber-crime division, but they don't. In 2013, they were trying to beef up their capabilities in the computer area. [japandailypress.com] This is embarassing for a developed country. Today, any sizable financial mess involves computers, and Tokyo is a major financial center. Untangling any business collapse requires computer forensics and forensic accountants.

    The Tokyo police have a backup option - putting Mark Karpeles through one of their standard 23-day interrogation sessions. That's probably going to happen at some point.

    Mt. Gox didn't have that high a transaction rate. They only did two or three money transactions a minute on average. They had a lot of traffic from people querying their site for market info, but that's all read-only traffic, and they had nginx and Amazon AWS to help with that.

    Their use of PHP wasn't the real problem. From the leaked code, a big part of the problem seems to have been that the front-end system that talked to web users also handled the money. Banks have a separation between the front-end web system and the money system, with standard-format transaction items flowing between them. All those transaction items are logged, often by a third system that just does logging. This allows auditing. It's separation of function that's important, not the language. As far as anyone can tell, Mt. Gox had nobody on staff who understood this.

    This all screams "inside job". If you're running a business that handles a lot of money and you lack financial controls, you're scared that someone will rip you off. Unless you're the one doing the ripping off.

  • I do not do bitcoin, i have neither the bandwidth to waste or the gpu hardware to mine and also not run microsoft windows that seems to scream btc fan.

    I do need bitcoin not much per year (under 100 dolars) , and so tried to open an account with mtgox.

    I got the governental forms [months pass], that got me a updated drivers license and passport and submitted them to magic the gathering exchange to verify my id. but I kept getting rejected. I had no value in the account.

    So three months after i start this an

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