Currencies, Stocks

Mt Gox Looks Like Bitcoin Fraud, Says Japanese Press Report

It has been a difficult year for Bitcoin, and now confirmation from investigative authorities in Japan working on the Mt Gox “disappearance” of customer bitcoins appears to be making things worse.

Bitcoin down near $316

As the digital currency / payment method is trading down near $316 to start 2015, after reaching a high near $1,200 earlier in 2014, suspicions regarding fraud surrounding the disappearance of nearly $341 million from the Mt. Gox exchange continue to dog Bitcoin’s future. This comes as a Japanese newspaper is reporting that Tokyo’s Metropolitan Police Department believes that 99 percent of the bitcoins in question were lost due to fraud rather than hackers.


The report says that Police concluded that only 1 percent, or nearly that about 7,000 bitcoins, disappeared due to cyber-attacks.  The remaining 99 percent, or about 643,000 bitcoins, are highly likely to have disappeared after the system was fraudulently operated by an unknown party, according to unnamed sources familiar with the investigation.

False bitcoin accounts

The police suspect that an individual familiar with the exchange system may have misappropriated bitcoins belonging to the exchange’s customers. After studying the server transaction logs, investigators discovered at least two suspicious accounts with balances that continued to grow despite no records of bitcoin purchases.  The balances in the suspect client accounts “were transferred to these suspicious accounts through system operations.”  However, when the affected clients checked their bitcoin balances on the website, the transfers were not displayed, apparently covering their tracks.

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About ETFalpha

Chief ETF Strategist & Co-Founder at EMerging Equity


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