We use Bitcoin ;) - page 22
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At least once some use of the hackers. It was obvious from moment 1 that there were no hackers that stole that. Just another ponzi - again, and again and again and Karpeles has been planing it and doing it for a long time (as it is obvious now)
Tokyo lawsuit raised red flags on Mt. Gox funding, compliance
Two months before Mt. Gox filed for bankruptcy it was sued by a customer seeking the return of funds in a case that highlights some of the red flags raised in the run-up to the collapse of what was once the world's biggest bitcoin exchange.
New York resident Marko Simovic filed a civil action at the Tokyo District Court on December 24, seeking to recover $105,000 he had on deposit at Mt. Gox and about $14,000 in interest, court filings show.
Simovic, who described himself as a software developer who previously managed the bitcoin operations for a hedge fund, said Mt. Gox dodged repeated requests to withdraw funds from his account, which as of July 1 was credited with $935,000 in cash. Simovic could not be reached for comment.
Mt. Gox refuted Simovic's claims in a brief filed by law firm Baker & McKenzie. It said Simovic didn't comply with online procedures, and cited withdrawal limits that would have required two months for him to draw down his account. That rebuttal was submitted to the court three weeks before Mt. Gox filed for bankruptcy protection on February 28, saying it had lost bitcoins and cash worth more than half a billion dollars to hackers.
The lawsuit was cited in a U.S. bankruptcy filing earlier this week, which is related to the company's Tokyo bankruptcy proceedings.
EXIT STRATEGY
Simovic said at the time he was worried that Mt. Gox could go bankrupt and decided on an exit strategy: he converted his cash into bitcoin, which he then sold on Bitstamp, a rival exchange. He managed to recoup $833,000, leaving the rest in his Mt. Gox account, according to the lawsuit.
"Rather than leave my money at Mt. Gox as required by their expensive, extremely slow and uncertain withdrawal procedure, I decided to move the funds as soon as possible," Simovic wrote in a brief that was part of the court file and dated December 18. "This was the only way I could get my money back quickly. Moreover, I was concerned there might be a run on Mt. Gox."
The suit also shows that Simovic raised questions about whether Mt. Gox was complying with Japanese laws.
In a September 11 letter to Mt. Gox's chief marketing officer Gonzague Gay-Bouchery, Simovic's lawyer expressed concern that Mt. Gox may be in violation of investment and banking laws that prohibit unlicensed companies from receiving deposits and engaging in currency exchange services.
In a court filing, Mt. Gox said it had checked with Japan's Financial Services Agency (FSA) and there was no need for it to register with the banking regulator. No one could be reached at Mt. Gox or Baker & McKenzie for comment. The FSA declined to say whether it had spoken to Mt. Gox.
Mt. Gox's collapse has brought into focus the question of how to regulate crypto currencies. Japan is still struggling to craft a response. Last week, the government said bitcoin was not legal tender, but might be taxable and subject to money-laundering controls.
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Mind your wallet: why the underworld loves bitcoin
Criminals may already have made off with up to $500 million worth of bitcoins since the virtual currency launched in 2009 - and you can double that if it turns out they emptied Mt. Gox.
Internet criminals, security experts say, are attracted to bitcoin because of its stratospheric rise in value, because it's easier to steal than real money, and because it's easier to trade with other criminal elements. But, they add, bitcoin will survive the damage.
"It's just growing pains," says Keith Jarvis, a security researcher at Dell SecureWorks. "Bitcoin is large enough and has enough momentum behind it to survive any public relations damage from this (Mt. Gox) case or anything else."
The fall of Mt Gox, the Tokyo-based exchange which filed for bankruptcy last month after saying it lost some 850,000 bitcoins to hackers, is certainly the virtual currency's biggest crisis.
But data collated by Reuters from specialist bitcoin industry websites and internet forums shows that more than 730,000 bitcoins were already missing to theft, hacking, cyber-ransom payments and other apparently criminal pursuits before Mt. Gox's collapse. That's nearly 6 percent of all bitcoins, and doesn't include dozens, possibly hundreds, of unreported cases of individuals who have lost bitcoins from their computers or online exchanges to hackers.
For sure, there's no way of telling who has these missing bitcoins, or whether they were converted to real money when the price was much lower. And of course some bitcoins may have been counted twice if criminals stole them from each other or they were put back into circulation and stolen again.
But there's no question that bitcoins have attracted the attention of cyber-criminals - as a currency and an asset worth stealing.
BEWARE MALWARE
A study by Pat Litke and Joe Stewart of Dell SecureWorks showed that as the price of bitcoin soared beyond $1,000 last year, so did the number of viruses designed to steal bitcoins from wallets - programs that hold bitcoins on user's computers or smartphones. Of the 140 types of such software more than 100 appeared in the past year.
Writing such viruses, says Stewart, is easy. "There's no sophistication involved in the storage of bitcoin in wallets. As for malware, it's some of the easiest stuff to write."
Indeed, this cyber-pocket picking wasn't criminals' first foray into bitcoins. Initially, they focused on using their control of large networks of infected computers - called botnets - to make their own bitcoins.
Bitcoins are created through a 'mining' process where a computer's resources are used to perform millions of calculations. For a while, says Kirill Levchenko, a researcher at the University of California, San Diego, criminals added malware to their botnets to turn infected computers into bitcoin miners.
This triggered predictions of doom for bitcoin - that the criminals would take over the mining of bitcoin through botnets and bring the whole currency crashing down. But as bitcoins become harder to mine - according to an algorithm that slows down their production the more people try to create them - this approach has proven less profitable.
In 2012-13, says Danny Huang, another researcher at the University of California, San Diego, they earned at least 4,500 bitcoins, a relatively small sum compared with the total produced. "Few botnets are mining bitcoins now," he said.
Instead, they've turned to stealing them from wallets, or, more lucratively, from exchanges.
According to data compiled last year by academics Tyler Moore and Nicholas Christin, of 40 exchanges tracked 18 had closed, with customer balances wiped out in many cases - not always, they point out, due to fraud. Since then, according to public reports, more than a dozen others have been hacked.
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U.S. class action over bitcoin losses names Mizuho as defendant
One of Japan's largest lenders, Mizuho Bank Ltd, has became ensnared in the U.S. legal fallout from the collapse Mt. Gox, the leading bitcoin exchange that lost more than $400 million of customers' digital currency.
The Japanese bank was added as a defendant on Friday to an existing lawsuit against Mt. Gox for allegedly aiding in a fraud by providing banking services to the exchange.
Mizuho held non-bitcoin currency on behalf of Tokyo-based Mt. Gox and its customers, according to the amended complaint by Gregory Greene, an Illinois resident who has said he lost $25,000 when Mt. Gox shut down last month.
Mt. Gox said in February it may have lost 750,000 of its customers' bitcoins in a hacking attack and filed for bankruptcy in Tokyo. Customers have suspected a massive fraud.
The company filed for a U.S. Chapter 15 bankruptcy on Monday, which shielded the company from lawsuits in U.S. courts. Canadian bitcoin traders filed a class action against Mt. Gox and Mizuho on Friday in the Ontario Superior Court of Justice.
The amended U.S. class action complaint was filed in Chicago federal court. It accused Mizuho of knowing of Mt. Gox's fraud, of not segregating funds that belong to Mt. Gox from those of its customers and of continuing to provide banking services that inflated losses for bitcoin customers.
"Mizuho profited from the fraud," said the complaint.
Mizuho seemed to be trying to distance itself from Mt. Gox in January, according to a recording of a conversation between the bank and Mt. Gox's chief executive, Mark Karpeles, that was published by the Wall Street Journal.
A bank official leaned on Karpeles to close the account voluntarily, citing "various issues." But the bank official also warned the account could be closed without notice.
Karpeles told the Mizuho official Mt. Gox was unwilling to cooperate.
While the U.S. bankruptcy stopped American courts from issuing orders against the Tokyo company, it did not protect Karpeles, the parent company Tibanne or Mt. Gox's U.S. affiliate. On Tuesday, the U.S. assets of those three were temporarily frozen by the federal judge overseeing Greene's lawsuit.
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Filing for a bankruptcy to avoid lawsuits - even the last steps are taken from "Fraud 101 for Beginners" book.
Alleged Bitcoin Creator Responds To Newsweek, Denies Everything
Remember Newsweek's "shocking" inaugural print issue which claimed to have uncovered the creator of Bitcoin (by scouring the phone book), and of course poor Satoshi Dorian Nakamoto's 15 minutes of fame? Guess we can put that to rest. From the LA Times.
So does Newsweek now retract its entire re-inaugural print issue or does it still stand behind its story, or perhaps it will simply replace it with an exclusive profile of Newsweek's mysterious, legendary fact-checker?
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Mt. Gox updates website, allows customers to check bitcoin balances
Mt. Gox, a leading bitcoin exchange that late last month filed for bankruptcy protection, updated its website on Tuesday to allow customers to log in and verify their wallet, or account, balance.
The website, which went blank just over three weeks ago, had previously posted occasional updates on Mt. Gox's civil rehabilitation process - a legal procedure that may allow Mt. Gox to rebuild and pay back some of its creditors - as well as a warning that some spam or phishing emails purporting to be from the exchange were in circulation.
Mt. Gox filed for bankruptcy protection in Japan on Feb. 28, saying it may have lost 850,000 bitcoins - worth around $520 million at current prices - to hackers. It has since gone through a similar process in the United States.
A spokesperson reached via a helpline for Mt. Gox creditors confirmed that Mt. Gox set up the log-in, based on the last available data from the exchange's servers before they shut down.
Leaked information from various hacking attacks on Mt. Gox servers and CEO Mark Karpeles' personal blog and Reddit account have been released in recent weeks, and one file purporting to be the company's internal database contained malware that could steal bitcoins once downloaded.
Besides the log-in option, the Mt. Gox homepage carried a statement in English and Japanese saying: "Please be aware that confirming the balance on this site does not constitute a filing of rehabilitation claims under the civil rehabilitation procedure and note that the balance amounts shown on this site should also not be considered an acknowledgment by Mt. Gox of the amount of any rehabilitation claims of users."
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Mt. Gox says it found 200,000 bitcoins in "forgotten" wallet
Mt. Gox said on Friday it found 200,000 "forgotten" bitcoins on March 7, a week after the Tokyo-based digital currency exchange filed for bankruptcy protection, saying it lost nearly all the 850,000 bitcoins it held, worth some $500 million at today's prices.
Mt. Gox made the announcement on its website. Online sleuths had noticed around 200,000 bitcoins moving through the crypto-currency exchange after the bankruptcy filing.
The exchange, headed by 28-year-old Frenchman Mark Karpeles, said the bitcoins were found in an old-format online wallet which it had thought no longer held any bitcoins, but which it checked again after its bankruptcy filing.
"On March 7, 2014, MtGox Co., Ltd. confirmed that an old format wallet which was used prior to June 2011 held a balance of approximately 200,000 BTC," the statement said.
It added that it moved the 200,000 bitcoins from online to offline wallets on March 14-15 "for security reasons." "These bitcoin movements, including the change in the manner in which these coins were stored, had been reported to the court and the supervisor by counsels," it noted.
Many of Mt. Gox's 127,000 creditors, who feared they had lost their investments when the exchange filed for bankruptcy, are skeptical about what the exchange has said happened to the bitcoins it had. In its bankruptcy filing, Mt. Gox also said $28 million was "missing" from its Japanese bank accounts.
BITCOIN TRACKING
On Thursday, a U.S. judge in Chicago overseeing a class action against Mt. Gox revised a previous order, allowing some of the exchange's bitcoin movements to be tracked.
"Today in court we got relief ... specifically to track the 180,000 bitcoins, which we've been monitoring. Hours later, Mt. Gox claimed it "found" these bitcoins ... it appears Mt. Gox realized we were close and decided to acknowledge that it owned these 180,000-200,000 bitcoins," Steven L. Woodrow, a partner at law firm Edelson, told Reuters in emailed comments.
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"forgotten" bitcoins
:):)
What else is this guy going to find out to hide that he is but a common thief?
"forgotten" bitcoins
Isn't that always so?
Just see what Dimon and the rest of the banksters are doing - the guy was trying to do the same but since he does not have a couple of billions to pay the fines, he is going to fall