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Author Topic: It's obvious MagicalTux is the user who had his account hacked!  (Read 2844 times)
JoelKatz
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June 21, 2011, 10:26:44 AM
 #21

I have a theory in that bitcoins sold werent all real. Sure the bitcoin system cant double spend. But in the end Mt Gox trades on its own platform, which is just a site in SQL and code (ie. PHP) like most others. Such a site could be hacked in such a way that the traded bitcoins were not backed by actual bitcoins.
Explains why so many bitcoins were traded while no one account should have had that much.
That's pretty much how banks work. When you have $1,500 in your checking account, that's just a number in your bank's computer. Your bank doesn't have a stack of 15 $100 bills with your name on them. The exchange operator only needs to actually have enough currency to cover the maximum expected difference between currency flowing in and currency that needs to flow out. The exchange/bank can hold its reserve in whatever currency is expected to be the most profitable, invest it, loan it out, or whatever.

I am an employee of Ripple.
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DaMayan
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June 21, 2011, 10:35:14 AM
 #22

I have a theory in that bitcoins sold werent all real. Sure the bitcoin system cant double spend. But in the end Mt Gox trades on its own platform, which is just a site in SQL and code (ie. PHP) like most others. Such a site could be hacked in such a way that the traded bitcoins were not backed by actual bitcoins.
Explains why so many bitcoins were traded while no one account should have had that much.
That's pretty much how banks work. When you have $1,500 in your checking account, that's just a number in your bank's computer. Your bank doesn't have a stack of 15 $100 bills with your name on them. The exchange operator only needs to actually have enough currency to cover the maximum expected difference between currency flowing in and currency that needs to flow out. The exchange/bank can hold its reserve in whatever currency is expected to be the most profitable, invest it, loan it out, or whatever.
Exactly. That also explains why they couldnt do anything but rollback: The bitcoins just werent there.
JoelKatz
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June 21, 2011, 10:46:54 AM
 #23

The scary thing is that perhaps the best currency for an exchange operator to be holding his reserve in would have seemed to be bitcoins. Interest rates are low but bitcoins are appreciating in value. Hopefully, an exchange operator wouldn't be so dumb as to leave his long-term reserve's private key anywhere anyone could get it, especially since he only needs access to it to pull money out of his long-term reserve. I bet their primary operating mechanism could be unraveled by forensic analysis of the block chain.

I am an employee of Ripple.
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TerraHertz
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June 21, 2011, 11:30:47 AM
 #24

I had already concluded just from the manner of MtGox's announcement of the rollback, that the '500K bitcoins' probably belonged to them.
Other supporting circumstantial details:
 - who else but the primary trading exchange would likely have accumulated such a large trove already?
 - If it _was_ some random member who lost them, why aren't they screaming bloody murder on the nets about their loss?

I wonder if you can use bitcoin investment losses/theft as a tax writeoff?

Will now go watch the video. Like GWBush being told on camera about the 2nd plane impact? Body language guilt admission, much?

(Just whiling away the f-cking 4 hour newbie annoyance timeout.)

Btw, if the 500K btc _were_ MtGox's, what does that say about the potential for long term seriously unequal wealth distribution in bitcoins?  Global banking cartel all over again?

MagicalTux =  Mark Karpeles = Owner of MtGox.
http://en.wikipedia.org/wiki/Karpeles

Well, wouldn't you know it.

"The price good people pay for their indifference to public affairs is to be ruled by evil men." -- Plato
JoelKatz
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June 21, 2011, 11:37:02 AM
 #25

I wonder if you can use bitcoin investment losses/theft as a tax writeoff?
Yes, just like any other business. The only difference is that (as I understand it) at least for now, holding or transferring bitcoins are not taxable events. Only buying and selling them are.

So if you bought some bitcoins for $50, you have a taxable basis of $50 in those bitcoins. If they appreciate to $500, that's not a taxable event. If they're stolen, that's a taxable loss of your basis ($50). If you cash them out for $500, that's a taxable profit of $450. If you transfer them to someone else as a business expense, you can deduct your basis (again $50). IANAL, IANA accountant.

I am an employee of Ripple.
1Joe1Katzci1rFcsr9HH7SLuHVnDy2aihZ BM-NBM3FRExVJSJJamV9ccgyWvQfratUHgN
TerraHertz
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June 21, 2011, 12:27:01 PM
 #26

It's Mark Karpelès, with the accent?
I don't suppose either Mark or Adam ever called themselves Satoshi Nakamoto?

"The price good people pay for their indifference to public affairs is to be ruled by evil men." -- Plato
sanddbox
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June 21, 2011, 05:49:13 PM
 #27

I have a theory in that bitcoins sold werent all real. Sure the bitcoin system cant double spend. But in the end Mt Gox trades on its own platform, which is just a site in SQL and code (ie. PHP) like most others. Such a site could be hacked in such a way that the traded bitcoins were not backed by actual bitcoins.
Explains why so many bitcoins were traded while no one account should have had that much.

Allthough that does require more/different hacking then a usertable that is found on the streets (so to say). Except if that usertable also included a admin password. But still possible.

As I said, the same SQLI that allowed for the table to be downloaded allowed for the table to be updated, allowing any values to be arbitrarily modified. What you suggested - which is what I said earlier - doesn't need some new, fresh exploit - it was able to be done through the same exploit that leaked the emails and hashes in the first place.
bitsalame
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June 22, 2011, 10:04:47 AM
 #28

As I promised I finished the non-verbal analysis.
For those who are late to the party: I am a psychology major who has been studying non-verbal communication for a while.
For the fans of the tv series "Lie To Me": the science actually exists in the real world.
I studied the researches of the "real" Lightman, Paul Ekman, who is the pioneer in proving that facial expressions are universal (which was heavily contended by anthropologists before his revealing research). I am studying to certify myself in FACS which stands for Facial Action Coding System which is the first effort in the world to codify the facial expressions, also created by Paul Ekman (who is the direct inspiration for the creation of the series)
With this knowledge I decided evaluate the video and analyze Dave's and Mark's facial expressions and body language.

Quote from: Disclaimer
Disclaimer:
The following analysis is purely based on behavioral and expression cues of the video.
The Truth/Lie should be read as "high probability of truth", it is not a categorical affirmation.
Some signs are ambiguous and need verbal confirmation (basically lie/truth analysis consists on coherence of verbal and non-verbal expressions)
Other gestures by themselves can tell with high confidence if it is a deception, depending on the context.
I will separate both with + and - signs as level of confidence.
ie.: "+Truth" would be pretty high confidence of being truth. "-Truth" probably truth but lower confidence signs. -Lie: probable lie, but low confidence. +Lie: high confidence that it is a probable lie.
Ambiguous but worth "note taking" signs will be tagged with "?"
Also, something important I must mention is that not detecting signs of deception might mean that they are telling the truth, but it doesn't guarentee it.

I will not detail the rationale behind the analysis was performed as it would take me a whole essay to explain each assessment.
These assessments are backed up by current academic research in non-verbal communication.
I reiterate, this is backed up science.
This analysis IS NOT based on Neuro-linguistic programming (NLP is Pseudoscience!)
If it is relevant, I will also list the emotional states revealed by gestures and facial expressions, some of them might be obvious to you, some others might not.
Also, understand that this analysis is not exhaustive. Every time I rewatch it I notice something new, but I am time constrained so I'll be focused mainly to their statement about Mt.Gox Account. (it is really time consuming, since I need to watch the whole hour video to see the baseline expressions to detect the "anomalous" expressions)
An accurate assessment requires a team of two or three person doing it independently to confirm the observations.

Now lets begin:

Mark Karpeles: Owner of MtGox
Adam Barr: Mark's Partner (He's an open book, he should never play poker lol)
Bruce Wagner: Interviewer (Check how many times he says "MHM-MMM Okay" when doesn't give a shit/doesn't understand lol)

4:40
-Truth: Mark isn't Satoshi.
-?: he might had been in contact with Satoshi

07:40
+Adam doesn't believe that the leaked accounts are "wide open". (Probably Adam is thinking that FreeBSD MD5 is not "precisely" plaintext)

07:50
+?: They reported it to the japanese police.

09:55
+No signs of deception detected: regarding to the new server, more security, from scratch and new "state of the art technique".
+?: The main reason why they keep the old system is NOT "precisely" for investigative purposes only.

10:50
+Truth: new system built in-house

11:55
+Truth: They do keep transaction logs

15:31
-Truth: One Account compromised
+Hacked Account belonged to Mt.Gox? Very Probably.
Detected disconformity microexpression in Adam. Also significant macroexpressions in Adam, who presses his lips for the first time; it might be interpreted as "I can't talk about it" and/or imply frustration/repressing emotions.
With what we have so far, I am inclined to believe (and this a long shot) that it was Adam's account or it was under Adam's responsability.
This idea is supported when Mark starts his answer by laughing and looking at Adam out of the corner of his eye. Adam suddenly gets his eyes teary, glances away and bursts several microexpressions, repeating once more time a disconformity microexpression.
Probably Mark bitched a lot about it


20:40
++Truth: Not prosecuting Kevin (until they find any solid proof)
+Truth: they don't want to compensate Kevin (no shit, right? lol)

21:00
++Feelings: Whoa, Mark flashes a beauuutiful partial microexpression that reveals concealed DISGUST towards the idea of compensating Kevin. (LOL)

22:31
?: Bruce Wagner asks: The hacker had complete access to the system for 3 days, then he adds "That's gonna come out later". Both Mark and Dave basically say with their heads: "mmm... I don't think so"

25:25
+Truth: they can guarantee that the bitcoins and USD will be in the accounts when the system comes back and they are able to log in.

28:55
++Truth: Adam's facial expression allows us to predict Mark's answer. When Bruce asks: "...or are you gonna ask them to return them..." Dave makes a quick and short nod saying yes.
Mark ends up explaining that those who don't return the withdrawn bitcoins will get a negative balance in MtGox. (nice, lol)

38:32
+Truth: About not being contacted by any legal authority.

41:30
?Feelings: Mark seems to flash sadness when Dave explains about the trust lost in MtGox. Weird eyebrows movement though, can't confirm.

52:17
+Lie!: When Bruce asks about "if it is a good idea locking the market price" and forcing price of the market. When Mark responds that they have no authority of manipulating the market which seem to be true, but when Bruce adds "well... that makes sense it's a free market, that's the whole idea", both Mark and Dave are unconvinced about it, nevertheless they nod saying yes.
Probably they think the free market is not really a good idea, but they are forced to do it anyway.

54:58
??: There is a LOT going on there but I need more time to dissect it carefully and interpret it properly. I don't see any clear sign of anything, but there is something doesn't quite feel right.
When Dave says: "We've been advised not to really mention any names right now" seems to be bullshit.
When Mark says that they want to be sure this never happens again seems to be honest.
I'll re-watch this part later.
(sorry guys, I am exhausted)

57:50
-Truth: probably truth that they don't know much about bitcoin7

My preliminary veredict: they have definitely something to hide (probably they directly fucked up and did something really stupid/embarrassing) and they don't want us to know, but they have good intentions, they seem to have really have put measures to prevent the mistakes, and they be pretty much honest about the business.

This is all by now, I might review it later.
Cheers,
-bitsalame

PS: My nick is not "bits-a-lame", it is "bit-salame", which in Spanish and Portuguese means "Bit Salami".
PS: Spin-off to a new thread: http://forum.bitcoin.org/index.php?topic=21026.msg263443#msg263443
Bloody Bell
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June 22, 2011, 11:16:10 AM
 #29

I am not really sure I believe your analysis completely, (for example I think some of the discomfort came from the audio being crap and hard to understand, so they had to listen very-very carefully) but I noticed that when they were talking about the identity of the owner of the big account, Mark looks very uncomfortable, and when the interviewer closes the topic with "obviously he won't come forward", the guy looks suddenly relieved. Interesting...

Though I am not that convinced that it was only one account, and not more (all of them with solved password), perhaps just transfered into one big bucket previously.
angelo95
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June 22, 2011, 11:47:07 AM
 #30

As I promised I finished the non-verbal analysis.
For those who are late to the party: I am a psychology major who has been studying non-verbal communication for a while.
For the fans of the tv series "Lie To Me": the science actually exists in the real world.
I studied the researches of the "real" Lightman, Paul Ekman, who is the pioneer in proving that facial expressions are universal (which was heavily contended by anthropologists before his revealing research). I am studying to certify myself in FACS which stands for Facial Action Coding System which is the first effort in the world to codify the facial expressions, also created by Paul Ekman (who is the direct inspiration for the creation of the series)
With this knowledge I decided evaluate the video and analyze Dave's and Mark's facial expressions and body language.

Quote from: Disclaimer
Disclaimer:
The following analysis is purely based on behavioral and expression cues of the video.
The Truth/Lie should be read as "high probability of truth", it is not a categorical affirmation.
Some signs are ambiguous and need verbal confirmation (basically lie/truth analysis consists on coherence of verbal and non-verbal expressions)
Other gestures by themselves can tell with high confidence if it is a deception, depending on the context.
I will separate both with + and - signs as level of confidence.
ie.: "+Truth" would be pretty high confidence of being truth. "-Truth" probably truth but lower confidence signs. -Lie: probable lie, but low confidence. +Lie: high confidence that it is a probable lie.
Ambiguous but worth "note taking" signs will be tagged with "?"
Also, something important I must mention is that not detecting signs of deception might mean that they are telling the truth, but it doesn't guarentee it.

I will not detail the rationale behind the analysis was performed as it would take me a whole essay to explain each assessment.
These assessments are backed up by current academic research in non-verbal communication.
I reiterate, this is backed up science.
This analysis IS NOT based on Neuro-linguistic programming (NLP is Pseudoscience!)
If it is relevant, I will also list the emotional states revealed by gestures and facial expressions, some of them might be obvious to you, some others might not.
Also, understand that this analysis is not exhaustive. Every time I rewatch it I notice something new, but I am time constrained so I'll be focused mainly to their statement about Mt.Gox Account. (it is really time consuming, since I need to watch the whole hour video to see the baseline expressions to detect the "anomalous" expressions)
An accurate assessment requires a team of two or three person doing it independently to confirm the observations.

Now lets begin:

Mark Karpeles: Owner of MtGox
Adam Barr: Mark's Partner (He's an open book, he should never play poker lol)
Bruce Wagner: Interviewer (Check how many times he says "MHM-MMM Okay" when doesn't give a shit/doesn't understand lol)

4:40
-Truth: Mark isn't Satoshi.
-?: he might had been in contact with Satoshi

07:40
+Adam doesn't believe that the leaked accounts are "wide open". (Probably Adam is thinking that FreeBSD MD5 is not "precisely" plaintext)

07:50
+?: They reported it to the japanese police.

09:55
+No signs of deception detected: regarding to the new server, more security, from scratch and new "state of the art technique".
+?: The main reason why they keep the old system is NOT "precisely" for investigative purposes only.

10:50
+Truth: new system built in-house

11:55
+Truth: They do keep transaction logs

15:31
-Truth: One Account compromised
+Hacked Account belonged to Mt.Gox? Very Probably.
Detected disconformity microexpression in Adam. Also significant macroexpressions in Adam, who presses his lips for the first time; it might be interpreted as "I can't talk about it" and/or imply frustration/repressing emotions.
With what we have so far, I am inclined to believe (and this a long shot) that it was Adam's account or it was under Adam's responsability.
This idea is supported when Mark starts his answer by laughing and looking at Adam out of the corner of his eye. Adam suddenly gets his eyes teary, glances away and bursts several microexpressions, repeating once more time a disconformity microexpression.
Probably Mark bitched a lot about it


20:40
++Truth: Not prosecuting Kevin (until they find any solid proof)
+Truth: they don't want to compensate Kevin (no shit, right? lol)

21:00
++Feelings: Whoa, Mark flashes a beauuutiful partial microexpression that reveals concealed DISGUST towards the idea of compensating Kevin. (LOL)

22:31
?: Bruce Wagner asks: The hacker had complete access to the system for 3 days, then he adds "That's gonna come out later". Both Mark and Dave basically say with their heads: "mmm... I don't think so"

25:25
+Truth: they can guarantee that the bitcoins and USD will be in the accounts when the system comes back and they are able to log in.

28:55
++Truth: Adam's facial expression allows us to predict Mark's answer. When Bruce asks: "...or are you gonna ask them to return them..." Dave makes a quick and short nod saying yes.
Mark ends up explaining that those who don't return the withdrawn bitcoins will get a negative balance in MtGox. (nice, lol)

38:32
+Truth: About not being contacted by any legal authority.

41:30
?Feelings: Mark seems to flash sadness when Dave explains about the trust lost in MtGox. Weird eyebrows movement though, can't confirm.

52:17
+Lie!: When Bruce asks about "if it is a good idea locking the market price" and forcing price of the market. When Mark responds that they have no authority of manipulating the market which seem to be true, but when Bruce adds "well... that makes sense it's a free market, that's the whole idea", both Mark and Dave are unconvinced about it, nevertheless they nod saying yes.
Probably they think the free market is not really a good idea, but they are forced to do it anyway.

54:58
??: There is a LOT going on there but I need more time to dissect it carefully and interpret it properly. I don't see any clear sign of anything, but there is something doesn't quite feel right.
When Dave says: "We've been advised not to really mention any names right now" seems to be bullshit.
When Mark says that they want to be sure this never happens again seems to be honest.
I'll re-watch this part later.
(sorry guys, I am exhausted)

57:50
-Truth: probably truth that they don't know much about bitcoin7

My preliminary veredict: they have definitely something to hide (probably they directly fucked up and did something really stupid/embarrassing) and they don't want us to know, but they have good intentions, they seem to have really have put measures to prevent the mistakes, and they be pretty much honest about the business.

This is all by now, I might review it later.
Cheers,
-bitsalame

PS: My nick is not "bits-a-lame", it is "bit-salame", which in Spanish and Portuguese means "Bit Salami".
PS: Spin-off to a new thread: http://forum.bitcoin.org/index.php?topic=21026.msg263443#msg263443

Nice work thanks. I personally do believe as well that it's his account. Beside that -but it's more a fantasm- there is a probability for this guy to be Satoshi because it's so weird that the creator of this genuine idea has disappeared like that. But it seems unrealistic looking at his face.
Archatos
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June 22, 2011, 11:57:34 AM
 #31

It's obvious that this is troll thread.
Oh, let me explain: MagicalTux -> uses GNU/Linux systems exclusively -> very unlikely affected by any trojan -> not his account hacked.
There are way easier ways to compromise an account. Trojans are mostly used for wide attacks where you just "shoot at everyone" and hope someone you hit have what you want. A targeted attack against specific accounts are more efficient and has nothing to do with trojans.

-> judging on people's face, arguing it proves anything
Judging body language and facial expressions is actually a very common method to catch people who tell lies. Not that I think the OP is an investigator, but once an investigator sees something in your face he interprets as being nervous etc, he will start asking more difficult questions designed to lure you in to a trap.

-> /thread
-> TeddyJames totally discredited
Not really. Not any more than you yourself just got.
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