New report on Mt Gox’s missing bitcoins

[Bizmark13]

According to the chart, there is still a good 3-4 months between the sale to Karpeles and before the coins started to go missing. It does show that McCaleb probably didn't have anything to do with the collapse though.

Read my post again. I wasn't accusing McCaleb of stealing the coins. He is a honest man. Karpeles was the one who stole the coins. He just waited for 3-4 months before stealing them. That's all.

Yeah, I didn't think you were accusing McCaleb of stealing the coins. I was just pointing out that the evidence exonerates him from being the one responsible since he had nothing to do with the exchange when the coins started to go missing.

This is similar to a case in the fiat banking sector, where a employee took a few cents from millions of accounts over a long period. These transactions never raised any flags, because nobody cared about a few cents.

After a few years these cents accumalated to a few million dollars and the employee were caught when he tried to withdraw the funds. {The withdraw limits, raised the red flags}

People tend to be very creative, when it comes to stealing someone else's money. 

That's only true for the second half of the chart since it suggests that the majority of the coins were lost/stolen in a short period of time early on.

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[CompNsci]

EDIT: And I think there was a major code rewrite at around the time it was sold too.

There was also the hack that happened in June 2011 as well which was what led to the 424,242 BTC transfer in the first place. I wonder if it's related.

I have been wondering about these issues also. As I recall, the main trading engine was replaced after the crash in 2013. Prior to that time, was the exchange using the Satoshi client for a backend? (Thus slow RPC calls and easily overloaded.)

Speculation here, but what if during the 2011 hack or its recovery, someone obtained a copy of the wallet files corresponding to the hot wallets? Rather than simply stealing all the BTC in the hot wallet at that time, they realized that they could now predict the future wallet addresses and private keys that would be used by the exchange. You could perhaps generate the sequence of keys, since it is a pseudo-random number generator, and watch the blockchain for when the addresses accumulated enough bitcoin. Then use the private keys to transfer bitcoin to other addresses.

Under this scenario, you don't have to have continuing access to the exchange. And MK may have thought the old hot wallet files didn't matter since the old addresses wouldn't have balances anymore.

The fact that blocks of 100 BTC or other denominations were moved onto other exchanges, and even Mt. Gox, does suggest it may be possible for law enforcement, with subpoena power, to figure out who controlled those accounts and where the cash went on subsequent withdrawal.

All of these problems would have been caught early on by consistent reconciliation of the book balance of BTC against the wallet balances on the blockchain. This is like Finance 101, but it appears that MK did not do this simple step, which would have caught the losses at a much earlier stage.

[jjacob]

There were a lot of articles linking the suspicious timing of bitcoins disappearing and the bots, Willy & Marcus, dragging up the price. If this is true, then thankfully the 2 events are unrelated. Mt Gox's bitcoins had disappeared far before Willy & Marcus made an entrance.