Japanese police: Mt. Gox downfall was an inside job, not caused by hacking


small__3286437002Claims that the downfall of Bitcoin exchange Mt. Gox Inc. in 2014 was the result of hacking have been disproved by Japanese police who have found nearly all of the missing Bitcoins were stolen through internal systems.

Japan’s Yomiuri Shimbun newspaper quoted sources in the Tokyo Metropolitan Police Department saying that only 7,000 Bitcoins or 1% of the total 650,000 missing from the exchange could be attributed to external hacking attacks.

The police are said to believe that the remaining 99% disappeared after the system was fraudulently operated by an employee, or other unknown party with access to the system.

Trouble first appeared at Mt. Gox in June 2013 when the company suspended US dollar withdrawals for two weeks. By February 2014 the rot had set in, starting with the exchange being down for several hours, news which saw the value of Bitcoin plummeting $126, followed by “security issues” that saw the value of Bitcoin drop to $100.

The end was nigh for the once popular exchange, with it formally shuttering February 25th. The company claimed several times its problems was due to hacking, including March 4th where it reiterated its earlier claims that it fell victim to hackers and was not run into the ground through its own incompetence.

First doubts were thrown on the Mt. Gox spin March 10th when hackers claimed the company still had access to some of the missing Bitcoins, and a study March 28th argued that MtGox could have lost, at worst, fewer than 400 Bitcoins from so-called malleability attacks.

In recent news the Kraken service from Payward Inc. was hired in November 2014 to investigate the whereabouts of the missing Bitcoins; it’s not clear whether it was this investigation that has led to today’s news.

photo credit: ★ spunkinator via photopin cc