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Seeing as how not anyone on this forum has provided ANY evidence that proves otherwise, I'm sticking with this as a far more likely theory.

Gox has been watched by the US govt for years now. If you were being pressured to conform to regulations, then had an account shut down by DHS, would you try to steal ALL the coins out of your cold storage wallet for everyone to see?

No mention by the "experts" or general media of the transaction that started to disperse the cold wallet funds: https://blockchain.info/tx/478ea915aa3a2e54503c43e1c5659722b42a784412423a05394c83a44affb805 (https://blockchain.info/tx/478ea915aa3a2e54503c43e1c5659722b42a784412423a05394c83a44affb805). It would be a simple matter for the Feds to ask Karpeles why these transactions were made. We would already be hearing about it if they were. With so much heat, I simply cannot believe that Karpeles would try to steal hundreds of millions in broad daylight.

Many will say it was incompetence. I don't buy that either. Transaction malleability doesn't explain how a cold wallet just starts dividing up coins. No one hacked the coins. They were moved by someone with the private keys, and maybe, that person had a gun to their head.

To think that you can replace an entire monetary empire without these kinds of black ops being waged is completely ridiculous. The mainstream media story completely fits with the governments MO of "problem, reaction, solution" - there's a reason for that, and its not a coincidence.

yes agreed. there is morethan simple hack here.

I want to know more, are we there yet?

Some approximation of this hypothesis stands as my most powerful one as well, and has for some time.  We'll see I guess.

I don't buy the theft-over-years-that-no-one-noticed explanation either. Or transaction malleability in any way adding up to hundreds of thousands of bitcoin, even with Gox's terrible accounting.

But what about the lost-the-private-keys possibility?: http://letstalkbitcoin.com/somethings-not-right-at-gox/

From the above:

I have no evidence, but GOVERNMENT!!!

I agree.  How naive to think that BIG BOTHER hasn't put his hands in this honey pot.

What if the thief made a copy of his cold storage wallet.dat file early on, maybe before it was cold storage.
He thinks the coins are safe but some one moves them a year or 2 later.
When he sinks his cold storage he finds the coins are all transferred out.

Honestly I'm leaning towards this theory too. Only one difference they didn't "steal" them, they're holding them in storage because of how Gox is supposedly linked to Silk Road. Or something...This also explains why Mark and Gox are not telling us a whole lot about what the hell is going on, and why they've been lying - they're under gag order so they can't say anything substantial. In any case, we should be getting more details on this topic daily so the truth will hopefully come out.

Gox has been around a long time.
If the cold storage wallet was generated in the early days before bitcoin had much value it may not have been protected very well.

What would be idiotic is thinking the thief would be able to compromise wallet.dat files from multiple exchanges.

*IF* the government is indeed involved...It's NOT stealing. It's a criminal investigation linked to Silk Road, which is why Gox in particular is involved. They didn't "steal" the coins, they're holding them in storage under their control because Gox's bitcoins are incriminated.

Do you find it to be a coincidence
right after MtGox file for bankruptcy an article came out to regulate bitcoin?
http://dealbook.nytimes.com/2014/02/26/japan-studies-regulation-of-bitcoin-after-mt-gox-goes-dark/?_php=true&_type=blogs&_r=0

Mx. Gox was an embarrassment to the Japanese. If BTC-E closed overnight there would be an equal number of newspaper editors writing about how Bitcoin needed to be regulated. It's not a coincidence, it's the usual media flood of article on how to fix things.

It is possible the NSA did this all for sake of trying to get regulations in place but c'mon... some people also believe the government blew up the Twin Towers.

err...

1)  GOX is the big fish in the tank, so it attracts the feds and/or organised crime

2) What makes you think they aren't linked with the others ? 

3)  Are you so naive as to not understand that organisations like the CIA (for example) have their hands in major dealings the world over, and have done so for decades?

Who cares if the Easter Bunny took them? They are gone.

A gun to his head is what makes the most sense to me.
That would make anyone hand over the keys.

Who would be behind the gun, though?
NSA?
The israelis ?
Yakuza?
Common tokyo street criminal?

I saw a post on reddit making the argument that Mark is under a gag order, and all the BTC were seized by US gov because of different investigations

Honestly I'm starting to think this is the most likely theory.

Sets a dangerous precedent that they can just seize ALL the coins though, considering most of Gox customers were not doing anything illegal.

Please try not to speculate.
Its just a post.

the likelihood its a lie or misinformed is 50/50

the likelihood its the truth or misinformed is 50/50

Truth is perception, in the end. Unless you do
your homework.

You know... it is like a 1:987654982364832846873287468237648732684692423684683276483268463286 chance to find the pass-phrase to open a wallet...

However, that being said...

You can still find it in 1 shot...

However, I do believe the draining was a long-term thing. The only good thing about that, is that there is a record of every transaction that was "resent", since the coins were not drained "accidentally", and it could only have been done if someone purposely altered the txid that Gox was using to confirm the "sent transaction"...

Eg, They know everyone that they re-sent to... because they have double withdraw records. One of each transaction was just "nullified", so it didn't come off that accounts balance. (Even if they didn't have the original Txid, they have the resent txid, and can check the address, and find 2 exact transfers, one after the other.)

Now... hopefully the idiots doing this, (though doubtfully), had verified accounts. (Accounts which had multiple IP's show, were forced to verify. Large transactions were forced to verify. Thus, some verification must exist, as well as a list of IP's or one singular IP for each drained account used.)

If that is actually the case. (Which I honestly doubt.)

I find it more believable that "someone", not K, has drained the wallets. After having somehow gotten access to the wallet and with equal access to the records.

That, or his wallets got "crypted" by that BTC ransom virus... which is uncrackable, and would require the ransom to be paid, to decrypt it. (Until the gov catches that guy, and freely decrypts everyone's locked computers.)

Or...

There was this other "Issue" with wallets... kind of a little known annoyance.

After the first 100 addresses that are created in a wallet.dat file... You can create many more. However, unless you have those saved, knowing the actual created addresses... they can never be "recreated", from an older backup of the wallet. Thus, those funds are essentially "gone", unless you randomly find the randomly created prior addresses, by luck.

That would make them "not gone", but "not accessible", which is a word he used in an interview.

The only solution to resolve that, is to not let the wallet create the addresses, you use a wallet generator, which is external, and can re-create the same random addresses, if given a seed-value. Then you just add those addresses to your wallet.dat file, to use them. (If the wallet becomes corrupt, you can still recreate it, using the external address generator. But not the wallet itself.)

Only sad part of the above... it does not work for "returned change", which will go to a new random address, beyond the 100, and out of the scope of the address generator.

honestly, the wallet needs an overhaul.

There is always simple "espionage"... hidden cameras, invisible tracer-paint on keypads, key loggers, database prying, packet-sniffing... It is not like he hand-built the systems himself. Nor did he have 24/7 security control, with security-watchers watching them, like a casino has.

It is time Gox was purchased by a real trade-market manager, with the security and protections it needs. Including fraud detection, and live audits.

Also.. how the hell did the audits NOT detect this? They had to audit off something real. (That alone says it probably wasn't actually a draining of a wallet.)

Whatever... a real criminal investigation is now underway. The reality will be exposed, then a real auditor will re-evaluate the actual losses... since his estimations were not legally valued like they should have been. 10,000 BTC deposited 4 years ago, was not worth today's prices, if it was never sold. It was worth the value at the time of deposit or of the last trade it had. He estimated all values at today's prices, including his own coins.

Not to mention all the dead accounts that were fake, and not a loss, because the depositors are dead, or in prison, or can never legally verify. (Thieves will not be going through the verification process to get laundered money that they stole, and now have to claim, for fear of being caught. Those have to come off the top of the "losses" also, and have to go to "unclaimed funds", which will just become, "unclaimed losses".)

Please DO try to speculate.  There is nothing wrong with a hypothesis that turns out to be incorrect.

The scientific method involves brainstrorming for a wide variety of hypotheses, then knocking out the hypotheses which do not stand to the evidence as it comes in.

Modern science has come very far very fast on the strength of this method of exploration.  Religion and politics have stagnated and look about the same as they have for the past several thousand years because they mainly reject these methods.

Most importantly, do your own thinking.  Most posters here just state some (usually absurd) assertion as though it were fact.  That's because there are a lot of imbeciles and youngsters around these parts.  In Bitcoinland doing your own analysis can make you rich...or at least help you to not get ripped off.

Occum's razor may apply in this situation.
Keep it simple. Keep it clean.
Gun to his head or lost keys.

the only transaction malleability in this whole thing is how the story doesn't fit
and how the story has changed.

I think the malleability is only part of it.. and that is what led them to discover the rest of the "issues"...

Someone is shaking in their boots, and may attempt to disappear from gox soon.. but I doubt it is K himself.

However, They said only like $8 million in USD was locked-up in assets, through seizure. (That is irrelevant to us anyways, as it is only locked-up for suspicion of being part of laundering.)

Still waiting for the help-lines to open, so we can file our claims. That information was still pending, once the investigation is complete.

No more stories now... It is in the Govt's hands... They are not going to lie. They have no reason to lie for Gox. :P He is just another business, that got screwed.

Customers still have protections... Even in Japan.

He will most-likely have a chance to earn it all back. That is why they had to do a strategic filing for bankruptcy protection. It is what businesses do, to continue to operate, or sell, or get external investigations for free. :P

I hope an American business picks it up for a nice discounted sale-price... Bring it closer to home. Would be a nice turn-key operation, once the holes are patched. Throw in some legal regulation and get 40x the customer base, and trade-volume and income. Best return investment ever. Better than buying a bunch of miners to farm, and cheaper.

Mt Gox owners need to devote more time and not let things take their course.

Dismissing the OP seems naive. The US government is a criminal organisation that is rife with exactly this kind of thing. Why would the OP be a stretch? It's much more on the side of "likely" than "unlikely".

The government is definitely Public Scum #1 and can't be trusted.
But I'm not really seeing that they did this. Mebbe so but I don't see it.
Let's not over conspiracy this thing. The trooth is prolly much simpler.

Could be. But it's not a stretch by any means. Ruling it out would be irresponsible. Truth is... we just don't know right now...

I lost nothing to gox, but what really pisses me off is all the wishy washy
horse feces we've been fed so far. Weasel words and total lack of any
credible explanation. And when and if the whole story is ever known
I have little faith that all our questions will be answered in the statements.
It will be some half baked drivel carefully concocted to placate the masses
with just enough technical explanation to look good on the surface yet
carefully leave no real information revealed. Just as it has been so far
so shall it continue to be.

I understand that Yakuza are extreme professionals at extorting even large corporations. It could simply be, that the bitcoins were obtained through extortion, and Kerpeles is unable to divulge the fact out of fear of whatever they are using to extort him. Of course, it could just be a government doing the extorting, and using threat of prison time for real or imaginary crimes.

http://people.howstuffworks.com/yakuza2.htm

Because they were hacked in 2011 and kept their losses silent. Keep in mind in 2011 500K BTC was "only" a few million dollar, and Gox probably thought they could earn that back in trading fees in a few years. Had the price remained roughly where it was, it might even have worked, but as the price rocketed from <$5 to >$500 that few million dollar hole became a quarter of a billion.

If people DBA government (either US or Japanese or yet some other) did this (stole bitcoins or forced Karpeles to steal bitcoins), then Karpeles will be found dead soon or will never be found. These people leave no witnesses.

The OP reasoning boils down to :

"Something bad happened, the government must be involved"  

8)

That's quite some logic there.
"If someone can't disprove my theory, it must be right"
On that basis, I have dancing unicorns in my garden. Prove me wrong!

There seems to be a good chunk of people on these forums for whom that is the default response to anything.
Bad coffee? Must be the CIA!

Herp a derp derp.

No, governments don't steal! Ever! Impossibru! (does not include wars, taxes, inflation, government debt, expropriation...)

All dogs have four legs.
My cat has four legs.
Therefore my cat is a dog.

Just because governments sometimes do bad things, it does not mean that all bad things are done by governments.

No shit Sherlock.  And who is saying this?

On any given thread in Bitcointalk, the probability that at somepoint someone will blame the government for any problem they have ever encountered approaches 100%.

and the probability that a govt troll will chime in is actually at 100%. Why don't you go play in traffic? Welcome to ignore-land.

Says the paid gov shill

I think the truth will be a combination of factors including mismanagement, theft (malleability), price manipulation and government intervention.

I know many people here scream Occam's razor. But from my experience with Bitcoinica the rabbit hole goes deeper than you think (https://docs.google.com/document/d/1-QMiae2yQthRMZgSq8KisK5NcjYDxkyDjzLcDp3FoTQ/edit) and things only collapse when the situation has become an unrecoverable entangled mess. Government seizure would explain the majority of the 'temporarily unavailable' coins best imho.

We know the US and Japan governments work very closely when it comes to regulation. Also there are vested interests in MtGox failing:

1) Creating the need for government regulation - more power to DFS in NY. more power to lobby institutions like the BF.
2) Depressing the price so large (Wallstreet) investors can get in at ground 0.
3) Opening up new space for competing U.S. regulated exchanges to fill the void.
4) Creating FUD around Bitcoin to turn the public opinion against a technology that poses a threat to the existing power base.

The SR investigation is ongoing and already led to the seizure of customer BTC accounts in the past. It also led to the arrest of Charlie from BitInstant. And subpoena's to virtually every US business that so much a touches BTC (including Gox). Surely the FEDs had their eyes on Gox for a long time but has largely remained out of reach by virtue of them being based in Tokyo.

However, in May 2013 they were able to seize 3 US based accounts (1 Dwolla, 2 Wells Fargo) from Gox:


I would not be surprised if the FEDs have turned MtGox into a giant honeypot since then so they could actively monitor money flows. (And putting Mark under a gag order possibly issued by FISA in collaboration with the Japanese government). There is a precedent for this in SR where the FEDs also monitored transactions for some time before swooping in and seizing all funds:


Mark also mentioned he stores the cold storage funds as paper wallets in multiple physical locations. I would not be surprised if one of those location would have been in the US. (e.g. a Wells Fargo safety deposit box associated with their seized bank accounts). Mark also mentioned he uses RAID technology to store the private keys, so perhaps he was using split keys. That would mean that Mark has only the first half of his keys, and the FEDs have the 2nd. I.e. neither party can move the coins at the moment. This situation might have existed since May but only escalated recently due to the malleability bug that drained the hot wallet forcing Gox to fall back on cold storage that is frozen.

I could be wrong (and most likely am).

Being somewhat familiar with how the US government operates, I put this at about a 99% probability. Its why I moved all my coins out of Gox back in early 2012. Late 2011/early 2012 was about the time that the US started really sticking its dick into everything bitcoin- especially Gox.

Certainly that is their MO.

A hypothesis along these lines strikes me as being as strong as any.  I, however, think it most likely that the Coinlab deal was supposed to result in the historic customer activity data landing in the Fed's laps and the retribution for this not happening took place immediately afterwards and was highly effective.  Thus, Mt. Gox has been acting as a honey-pot since the beginning of 2013 rather than the end.  And the Feds have all the data that Mt. Gox kept which is probably a lot.

It seems very unlikely to me that the cold funds were stolen in an ordinary manner since there is no way Karpeles is that stupid and careless, and pretty much inconceivable that they were drained in anything but trivial amounts by the malleability issues.

I'de put the hypothesis tree as so:

 - Mark has lost control of the BTC through extortion
   - by criminals
   - by state actors

 - Mark has lost control through very sophisticated zero-day means (e.g., hardware backdoors.)  This would imply state level action.

 - Mark has control of the coins but is floating a story of some vague theft story to avoid giving up control.

 - Mark has ceded control to a friendly entity do stage a theft for similar reasons.

 - Mark thinks he can get away with simply stealing the BTC and the theft is staged or bogus.

An interesting (and bothersome) thing about having law enforcement work in a covert and secret manner is that it short-circuites all of the traditional justice systems of the U.S.  If information or actions (e.g., stealing/appropriating the BTC) is carried out in a covert manner than it becomes very cumbersome to act on it in public without giving away the methods.

I would not rule out that Mark and the U.S. authorities are working hand-in-glove to invent a story of theft as a means of diverting attention and analysis of the methods that the authorities are employing as they relate to Bitcoin.  For the whole year Marks assertion that he simply cannot talk about certain fairly basic things has been highly awkward.  It literally screams 'gag order.'

===

Edit:  One more perfectly viable hypothesis which I forgot to mention:

  - Mark did in fact simply lose access to some cold wallet keys.

I say this because it is actually damn difficult to come up with a scheme which limits loss due to extortion.  I've put many hours into figuring out how to mitigate this threat, and I control nowhere near the BTC that Mark does so his threat surface here is much larger.  Not only that, but a scheme which is subject to loss of keys has the utility of providing a level of plausible deniability which can go a long way towards helping solve certain kinds of problems.

Powerful analysis, you got a good brain there.

+1 Internets.

^^^ Also the analysis above does cast an interesting question mark over the pending litigation in terms of Gox?

Wait, there is a legal term for that which means "I rest on pending legal cases not yet decided" or something like that, it is a legal maxim which people can avoid speaking or acting or can free themselves based on pending litigation cases that are not yet decided.  Basically only when the referred-to case is decided, can a chrage then be levied against that party. 

And since the FBI probably is in between Gox and its counterparties due to SR wallet stealing of their doing, its basically up to the FBI to decide the future of BTC, it seems, on one of these logic paths.

I only crack my legal library when it gets really interesting and I may have to go find this phrase I am thinking of, in regards to pending litigation being an out for present crimes.

Over 99.99% of the people on this blog do not have access to the facts regarding Mt. Gox. Including you. So all that speculation is based on hot air and is worthless. Even if someone states exactly what happened, no-one here can vouch it (its just a lucky hit) In science, everyone shares the so called facts and results, so speculation about what they mean works because some people already have the experience to know.

Am I Black or White? You have the same chance to determine this as a monkey. Same with people who don't have facts about Mt. Gox.

If Japanese Government finds out this was a US black op, maybe they can refund the coins!!!
I mean Bitcoin is after all a secret project of the Japanese Government to take over global finance.

Bull.  There are a great number of facts.  For instance, it's a stone cold fact that Mark claimed he could not talk about what was happening for about a year now.  This does not prove that he was under a gag order, but it, like thousands of other known facts, can be applied toward strengthening or weakening a number of varying hypothesis...or can by people who are not lazy and/or stupid.

Another thing that is a fact is that Mt. Gox closed their web site and people cannot log in.  Certain of the hypothesis I've been entertaining predicted this.  I got all my records from them a long time ago for this reason.

You are, I believe, confused between a 'fact' and a 'synthesis'.  That is, a pre-canned complete series of answers about what is going on.  Lacking the latter should NOT constitute some sort of a barrier which precludes other deductive analysis.

Again, someone who lacks the analytical abilities or comfort level in doing this kind of work may be better off just sitting at idle to see what comes up.  That's fine, but it doesn't mean that everyone should.  In this case, those who can do analysis might very well walk away with the money from those who cannot in their pockets.  That's how the world works unfortunately.  Case in point is that I took my BTC out of Mt. Gox back in August 2013.  I took a calculated risk on a wire as I closed down with them, but only what I could easily afford to lose, and also because it provided a toe-hold for future potential projects.

http://hackingdistributed.com/2014/03/01/what-did-not-happen-at-mtgox/


2014-02-20 10:40<MagicalTux> le gouv. US veut pas qu'on disclose hein | The US government doesn't want us to disclose
02-25-2014 EST [12:04] <MagicalTux> Well, technically speaking it's not "lost" just yet, just temporarily unavailable
03-02 <MagicalTux> we are not at liberty to discuss details with anyone else than law enforcement

This is a white lie. He can't discuss the issue with anyone else besides LE not because they are working for the customers to get stolen coins back but to investigate against customers who did illicit transactions with SR.

There are 3 reasons why they did this:
1. Identify customers who bought at SR (Back in 2011 Gox was used by many people to get into bitcoin just for SR) http://imgur.com/NUolxDg from http://cseweb.ucsd.edu/~smeiklejohn/files/imc13.pdf
2. Tax information. 2011, 2012 and now 2013 probably didn't include a lot of bitcoin capital gains.
3. Get more intel to prevent future illicit use.

Private keys are secure or we are SOL.

This theory, more or less, makes some sense than " Stolen by hacker".