FTA: "He said a weakness in the exchange's systems was behind a massive loss of the virtual currency involving 750,000 bitcoins from users and 100,000 of the company's own bitcoins."
This is what has been announced from MtGox so far.
So 850,000 bitcoins didn't vanish?
FTA: "It remains unclear if the missing bitcoins were stolen, voided by technological flaws or both."
Seriously, I thought every Bitcoin exchange was verifiable. So how can what happened to the missing Bitcoins be unclear?
It remains unclear what happened to the 850,000 bitcoins. Some possibilities that people have speculated about are that they were stolen, or that MtGox lost the private keys and that those bitcoins now exists unspendable in the blockchain forever.
Second, I was under the impression that Bitcoins can't "vanish" or be "voided" as there would be holes in the Blockchain.
Actually, a miner can cause bitcoins to "vanish" if they don't assign the proper amount of bitcoins in the coinbase transaction. It is very rare, but it has happened before. This almost certainly is NOT what happened with MtGox bitcoins.
Also since mining verifies the blockchain wouldn't the stolen bitcoins be able to be tracked to a specific wallet address?
If they are actually stolen, then yes, they should be trackable to a specific address. Of course that would first require MtGox to announce which transactions were fraudulently transferred from them.
