Peter R Rizun's theory on the collapse of MtGox and its effect on the price of bitcoin - page 3.

manifold

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Quote from: Peter R on March 02, 2014, 05:01:28 PM

Later this day, a group of hackers gained access to MtGox servers and executed fake trades that the world could see, driving the nominal price of bitcoin near $0. Mark was frantic. He quickly regained control of the servers and learned the dark truth: the million bitcoins that had recently flooded in earlier that month were gone. Mark admitted publically to the hack, rewound the false trades, but kept the truth of the missing coins a secret.

Which transactions show the 1M BTC transfer from and away from MTGox? So many BTC must be tracable... ok. reading up on the total output...
~~Didn't MTGox have a withdraw limit already at that time? Or was that withdrawlimit coupled to the BTC price on mtgox?~~ It seems that withdraw limit was coupled to the BTC price and had a huge bug anyway.... Didn't use MTGox a cold wallet at that time for 1M BTC?
Did people really see Willy sell BTC in February? Here is from earlier: http://www.reddit.com/r/BitcoinMarkets/comments/1uhjrb/intriguing_bot_activity_on_gox_for_the_last_2
readin up here and I am shocked: https://bitcointalksearch.org/topic/m.252680

Quote from: Peter R on March 03, 2014, 12:36:34 AM

Quote from: damnek on March 03, 2014, 12:32:38 AM

Mark was in #bitcoin-dev at the time of the heist asking the bitcoin devs to roll back the blockchain, so that lines up with this theory.

Very interesting. You wouldn't happen to have an IRC log or a link handy to a thread discussing this, would you?

Yes I'd like to see that too...

manifold

PS: yes I also was goxxed... :-(
PPS: Interesting story, that at least explains all the events... but I hope it's not too close to the truth.
PPPS: The most puzzeling thing for me was the missing Fiat... and your story (A bot selling/buying fake BTC) explains this....

mdude77

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Quote from: Idea_Atm23@ on March 06, 2014, 12:07:26 PM

Quote from: Peter R on March 02, 2014, 05:01:28 PM

Peter R’s Theory on the Collapse of Mt. Gox

Now we watch the rest of the story unfold. A story of how an oversight during a hectic period, an untimely theft, and an attempt to cover it up, lead to the greatest loss in the history of bitcoin.

Great Article. Just another reason bitch coin is a fail. how many times can this happen, with these 'actors' playing Brady Bunch trust me with your money attitude, then bite you like the snakes they really are???!!! And with NSA having back door entry to all windows devices how is any of it safe?? (if your a btc miner and have a life style where you can trade all your btc in person your most secure). Why would you wanna use something designed by the NSA and published under the acronym Satoshi, if it was honest shouldn't they tell you who made it?? Why lie?? Right bc we wouldn't use it. ( Don't know why coming from Japan is Better???!!!) You guys will be on Celebrity Green Room Platform eventually, still have $500,000 for anybody that can hack my site

um.
Exchanges <> bitcoin.
-1

Exchange management <> bitcoin.
-1

completely off the wall comments, do you by chance live under a bridge? (ie a troll)
-1

M

Idea_Atm23@

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Quote from: Peter R on March 02, 2014, 05:01:28 PM

Peter R’s Theory on the Collapse of Mt. Gox

Now we watch the rest of the story unfold. A story of how an oversight during a hectic period, an untimely theft, and an attempt to cover it up, lead to the greatest loss in the history of bitcoin.

Great Article. Just another reason bitch coin is a fail. how many times can this happen, with these 'actors' playing Brady Bunch trust me with your money attitude, then bite you like the snakes they really are???!!! And with NSA having back door entry to all windows devices how is any of it safe?? (if your a btc miner and have a life style where you can trade all your btc in person your most secure). Why would you wanna use something designed by the NSA and published under the acronym Satoshi, if it was honest shouldn't they tell you who made it?? Why lie?? Right bc we wouldn't use it. ( Don't know why coming from Japan is Better???!!!) You guys will be on Celebrity Green Room Platform eventually, still have $500,000 for anybody that can hack my site

pointbiz

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1ninja

http://bitcoinstats.com/irc/bitcoin-dev/logs/2011/06/19

Quote

quiznor: who moved 432K BTC at 2PM EST today

MagicalTux: quiznor: me

Kireji: MagicalTux: good to know, is that the investment base on mtgox?

MagicalTux: Kireji: it's the mtgox funds, which I moved to a secure area until things are cleared

pointbiz

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1ninja

http://blockexplorer.com/tx/84f96975ea88d317676771a482c71f39ff53beda790c89c07ae82e427b4d090f

Mark said he made this 432k transaction to move those coins to a safer place. That means to me that he moved it from the hot wallet to the cold wallet. This is more evidence for Peter R's theory that the hot wallet had a Lot of coins.

Hunterbunter

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Quote from: btcusury on March 03, 2014, 09:29:37 PM

Which means massive incompetence in management, hiring, etc.

He might be competent in many things, but no one is competent at everything.

This is why companies exist.

joequant

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Quote from: elebit on March 03, 2014, 06:54:49 PM

If you own the exchange (or indeed if you 0wn it) you can publish whatever you want in the orderbook if you want. No need to execute the actual trades.

Because it is non-trivial to generate a computer system that creates realistic looking trades in an order book. If you generate fake trades, then pretty soon it will be obvious to everyone that something is very wrong. Generating realistic trade data is something that requires a small team of programmers, who you can't afford because you are in the hole.

Madoff had programmers that did nothing except work on algorithms to generate fake trades. MtGox didn't have the money to do this.

Quote

If you want to steal btc or fiat you just transfer it out. Why trade with yourself first?

Because you are not trying to steal BTC or fiat. You are trying to cover up a theft that was done by someone else.

I don't know about the details of the initial loss of bitcoin, but if you replace the first paragraph with "X loses a lot of bitcoin" then the rest of the story makes sense.

joequant

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Quote from: btcusury on March 03, 2014, 07:27:40 PM

If Mark is as competent as your theory says, how do you explain the piss poor customer support and PR at MtGox?

This theory also explains the terrible customer support and PR.

1) If Mark was deep in the hole, then ever single cent that they made from trading fees would have gone into fixing the hole. Any money spent on customer support and PR would have been less money to spend on fixing the hole.

2) Any competent PR or customer support person would have quickly figured out what was going on, and resigned and spilled the beans. Having a big secret made it impossible to hire anyone competent. Even a PR or customer support person with no ethics or moral character would refused to have worked for MtGox, because the big secret meant that they were unlikely to get paid.

infamousdutch

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This makes sense in a very scary way.

breakinglocks

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Quote from: theonewhowaskazu on March 03, 2014, 09:35:10 PM

No this isn't true.

When you close off withdraws for BTC, you can dump BTC to your own exchange. Now either people re-bid price up to where it was before, in which case you calmly continue dumping, or they let the price fall, in which case you put up a bid. Since there's no cost to issuing as much BTC as you like, eventually the price will have to fall to 0 (or close to it). Then you can calmly re-buy everything your short.

It's not even really about re-buying at some point. You dump fake btc, so demand rises and people will put their fiat into BTC. As the fiat doesn't get paid to real accounts, but to yourself, the total liabilities in fiat on bankruptcy decrease and the BTC you claim as hacked and gone.

KWillem

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Thanks Peter for sharing your thoughts Roll Eyes

π,

Theory makes perfect sense, and explains market anomalies. Still the one question remains: Who did take/steal the original 1,000,000 bitcoins?

theonewhowaskazu

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btcusury

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Which means massive incompetence in management, hiring, etc.

Adrian-x

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Quote from: btcusury on March 03, 2014, 07:27:40 PM

If Mark is as competent as your theory says, how do you explain the piss poor customer support and PR at MtGox?

1,000,000 customers and a hand full of staff maybe?

mdude77

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Watching, thanks.

M

btcusury

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If Mark is as competent as your theory says, how do you explain the piss poor customer support and PR at MtGox?

xavier

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Interesting theory... watching this for sure.

jojo69

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diamond-handed zealot

http://pastebin.com/W8B3CGiN

thezerg

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Quote from: elebit on March 03, 2014, 06:54:49 PM

These complicated explanations do not make sense.

If you own the exchange (or indeed if you 0wn it) you can publish whatever you want in the orderbook if you want. No need to execute the actual trades.

If you want to steal btc or fiat you just transfer it out. Why trade with yourself first?

you trade with other accounts in your exchange to change the amount of btc or fiat you owe account holders... in the case of driving btc to 1/5 of price in other exchanges you can then buy the btc already lost stolen at discount

elebit

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These complicated explanations do not make sense.

If you own the exchange (or indeed if you 0wn it) you can publish whatever you want in the orderbook if you want. No need to execute the actual trades.

If you want to steal btc or fiat you just transfer it out. Why trade with yourself first?

Topic: Peter R Rizun's theory on the collapse of MtGox and its effect on the price of bitcoin - page 3. (Read 77183 times)