Topic: Bitcointalk history of MtGox and how a Bitcointalk post caught the MtGox hacker. (Read 1051 times)

March, 2011, MtGox sold by programmer (Ripple co-founder) Jed McCalib to to French developer and bitcoin enthusiast 26 year old Mark Karpeles.
The exchange allegedly had already lost 80 000 bitcoins but this was not disclosed to the public.
McCaleb also said that Mark Karpeles had rewritten the MtGox codebase back in 2011 after the sale was completed.

https://davidgerard.co.uk/blockchain/2017/09/17/kim-nilsson-of-wizsec-how-the-bitcoins-were-stolen-from-mt-gox/

April 18, 2013, Increased Trading Volume Breaks Mt. Gox BTC $181.66 over 10 days drops to $122.90

April 18, 2013,MtGox withdrawal delays [Gathering]
Customer complaints about long delays were mounting as of February 2014, with more than 3,300 posts in a thread about the topic on the Bitcoin Talk online forum.
https://bitcointalksearch.org/topic/mtgox-withdrawal-delays-gathering-179586

May 2, 2013 CoinLab filed a $75 million lawsuit against Mt. Gox, alleging a breach of contract

May 14, 2013, Mt. Gox Dwolla account frozen by DHS BTC $114.33 over 10 days rises to $128.80
On 15 May 2013 the US Department of Homeland Security  seized money from Mt. Gox's U.S. subsidiary's account with payment processor Dwolla asserting  that the subsidiary was not licensed by the US Financial Crimes Enforcement Network (FinCEN), was operating as an unregistered money transmitter in the US.

During the negotiations Karpeles’s attorneys allegedly brought up Silk Road . They said that Mark Karpeles was willing to give up Silk Road operator “Dread Pirate Roberts” if he “could get a walk on his charges.”

The case eventually reached Greece's Supreme Court, and today, it was decided that Vinnik should face charges in Russia, the suspect's native country, and where he expressed his desire to be trialed, mainly because of the thinner charges brought against him.

On the same day Greek authorities were arresting Vinnik, a team of researchers that also included Google staffers, presented findings at the Black Hat USA 2017 security conference, revealing that 95 percent of all ransomware ransom payments were cashed out and converted into fiat currency through Vinnik's BTC-e portal.

Also on the same day, a group of Bitcoin security specialists calling themselves WizSec published the results of an investigation that linked Vinnik's Bitcoin accounts to laundering funds stolen from the Mt. Gox exchange.

Researchers said that Vinnik was also involved in laundering funds stolen from other cryptocurrency exchanges, such as Bitcoinica, Bitfloor, and other platforms they did not name at the time.

Based on the available evidence, it appears that Gox lost a fairly modest amount of money (in terms of USD) in 2011 that compromises a decent bulk of the missing money. They were subsequently hacked a number of times that have been publicly reported, during which they likely lost some amount of money.

I am not entirely sure why the losses compounded over time, maybe Gox was not a profitable operation, and they took customer money to fund the losses.

Security did not seem to be a strength of Gox's. If they had been honest about the loss in 2011, it would likely have been not a very big deal, but Gox would have closed and some other exchange would have taken the spot of having the majority of trading volume.

Mt.Gox is one of the biggest disasters in Bitcoin history and the story is not yet complete.

I heard the bitcoin dump is not the first time on this June but also several weeks ago when Bitcoin is heading to reach USD 10,000. On that time, actually bitcoin is heading to exceed USD 10,000 but this Mt Gox releasing their bitcoin to the market in big numbers then impacted to price decreasing until less than USD 8,000. Now, they releasing other bitcoin to press bitcoin price to be lower than USD 7,000.

Well is 40,000 bitcoin enough to suppress an entire global market, if theres 17 million bitcoins available I dont think thats significant enough by itself.   Perhaps only bitcoin float on exchanges is relevant in comparison for that figure and introducing 40,000 new coins previously considered 'gone' is the effect.    I dont think we can say it helps or is the majority of the reason for a trend.
Thats a big deal and McCaleb is not sharing any responsibility apparently.  Is that legally correct because the sale was final I dont know

not final then

Good summary only thing is the price on each date is relevant and should probably be stated, explaining why previous losses can be repaid in full now

while McCaleb owned it. He had sold Karpèles an insolvent exchange.

remained a minority owner in the company until its collapse in 2014

This is an interesting archive fact finding chronological layout of the events that took place. Long but interesting to read. I recently read a nice post on the same topics by theyoungmillionaire called The Silk Road seized and the downfall of Mt.Gox (Bitcoin Discussion section), from early May 2018. Both approaches are different in style so reading both is no issue at all.

<...>

I believe that this is how the attack was done: After the 2011 hack of the forum, the attacker inserted some backdoors. These were removed by Mark Karpelles in his post-hack code audit, but a short time later, the attacker used the password hashes he obtained from the database in order to take control of an admin account and insert the backdoors back in.

I'm sorry I led people to trust Mtgox.
I'm sorry I allowed Mtgox to use me in this way.
I'm sorry I ever made that video to help Mtgox.  
It seemed like the right thing at the time.

But I'm sick of people claiming I said Mtgox was was solvent!
I NEVER SAID THAT, EVER!
Liquidity != Solvency

I chose my words very carefully.
That is why I read them from my own script.
I said Mtgox had lots of LIQUIDITY 7 months ago when I made that video.
That was certainly true, but is completely different from saying that they were solvent.


Transcript:
I'm Roger Ver, long time Bitcoin advocate and investor.
Today I'm at the Mtgox world headquarters in Tokyo Japan.
I had a nice chat with MTGOX CEO, Mark Karpeles, about their current situation.
He showed me multiple bank statements, as well as letters from banks and lawyers.
I'm sure that all the current withdrawal problems at MTGOX are being caused by the traditional banking system, not because of a lack of liquidity at MTGOX.
The traditional banking partners that MTGOX needs to work with are not able to keep up with the demands of the growing Bitcoin economy.
The dozens of people that make up the MTGOX team are hard at work establishing additional banking partners, that eventually will make dealing with MTGOX easier for all their customers around the world.  For now,  I hope that everyone will continue working on Bitcoin projects that will help make the world a better place.

Roger Ver

To whom it may concern,

 

This is a notice related to the bankruptcy proceedings of MTGOX Co., Ltd. (the Tokyo District Court 2014 (fu) no. 3830), which we are sending to you pursuant to the request from the Tokyo District Court.

 

On July 24, 2014, the Tokyo District Court 20th Civil Division issued an order to change the period for filing proofs of claims and the date for investigation of claims as follows (please refer to the attached file.).

Detailed information for the filing of proofs of claims, including the form of the filing document and the process of the filing will be disclosed through the website of MTGOX Co., Ltd. at a later date. Your patience would be very much appreciated.

MtGox bankruptsy documents (Japan & US)
https://www.mtgox.com/img/pdf/20140618_order.pdf

(Old Date)

Period for filing proofs of claims:     until November 28, 2014

Date for investigation of claims:       February 25, 2015 10:00am

(New Date)

Period for filing proofs of claims:     until May 29, 2015

Date for investigation of claims:       September 9, 2015 1:30pm

 

This email address ([email protected] ) is used only for the purpose of sending messages, and we are unable to check and respond to any replies to this email address.

Since we plan to provide the information regarding the filing of proofs of claims and the bankruptcy proceedings by posting it on the website hosted by the bankruptcy trustee (http://www.mtgox.com/ ), please check this website.

 

Bankrupt MtGox Co., Ltd. Bankruptcy trustee Attorney-at-law Nobuaki Kobayashi

Over time, the hacker regularly emptied out whatever coins they could spend using the compromised keys, and sent them to wallet(s) controlled by Vinnik. This went on for long periods, but also had breaks — a prominent second phase of thefts happened later in 2012 and 2013.
By mid 2013 when the funds spendable from the compromised keys had slowed to a near halt, the thief had taken out about 630,000 BTC from MtGox.
In addition, the shared keypool of the wallet.dat file lead to address reuse, which confused MtGox's systems into mistakenly interpreting some of the thief's spending as deposits, crediting multiple user accounts with large sums of BTC and causing MtGox's numbers to go further out of balance by about 40,000 BTC. The majority of these funds were hurriedly withdrawn by their recipients rather than being reported.
After the coins entered Vinnik's wallets, most were moved to BTC-e and presumably sold off or laundered (BTC-e money codes were a popular choice). In total some 300,000 BTC ended up on BTC-e, while other coins were deposited to other exchanges, including MtGox itself.
Some of the funds moved to BTC-e seem to have moved straight to internal storage rather than customer deposit addresses, hinting at a relationship between Vinnik and BTC-e.
The stolen MtGox coins were not the only stolen coins handled by Vinnik; coins stolen from Bitcoinica, Bitfloor and several other thefts from back in 2011 and 2012 were all laundered through the same wallets.
Moving coins back onto MtGox was what let us identify Vinnik, as the MtGox accounts he used could be linked to his online identity "WME". As WME, Vinnik had previously made a public outcry that coins had been confiscated from him (the coins in question coming from Bitcoinica).
There were other thefts and incidents explaining other missing funds from MtGox. More on that in later posts.

Creditors of the Mt Gox bankruptcy proceedings. We’re coordinating legal action to stop more than $2,000,000,000 surplus from going to the people responsible for the exchange when it was hacked, and instead have it shared among creditors who were victims of crime.

Mt. Gox official says they may start paying back their creditors as soon as next year. They claimed the initial discovery of the missing/hacked 850,000 Bitcoin in the year 2014, Mt. Gox has found 200,000 Bitcoin of them.

At the time of the Mt. Gox hack event in 2014, Bitcoin price was $483 which has a value of $96.6 mln for 200,000 Bitcoin.
The recovered funds have been frozen in the Mt Gox bankruptcy estate for four years, The recovered 200,000 Bitcoin is now worth an estimated $1.2 Bln in Bitcoin
 (at 1BTC=$6,100) without its forks, Bitcoin Cash.
Quite impressive investment, huh?

this is the only part of this all that matters! the START of the sale was last year DURING THE RISE. and people keep on focusing on the drop part. they literary started selling when price was $4000+ and while they were selling price kept on going up and reached $10k then $20k and all that time they were selling a lot of coins!

here is how it looks like:

Lol, this is just toooooo funny

Kobayashi sells some bitcoins, price drops 10%
Kobayashi moves some bitcoins, price drops 10%
Kobayashi says he won't sell any coin anymore, price drops 10%

We should really be careful if this guy tweets he will go to the toilet we might see a drop of 20%