The Mt. Gox Bitcoin Debacle: An Update

More than 18 months after the MtGox bitcoin exchange filed for bankruptcy in February 2014, little is still known about what happened to the 850,000 missing bitcoins. The now defunct Tokyo-based company claimed hacker malleability attacks—illicit alterations of transaction ID numbers—were responsible for the disappearance. MtGox users who traded the virtually currency for fiat money suspected fraud.  Whatever the reasons, the fallout appears to have been a financial calamity for Bitcoin investors: the value of a bitcoin dropping from a peak of over $1,000 prior to the exchange’s collapse to around $232 today.

Although investigators remain tight lipped about their findings, Tokyo Metropolitan police took Mark Karpeles, the CEO of MtGox, into custody in August on charges of manipulating company accounts and stealing from exchange users. Then on 11 September prosecutors issued a warrant for his arrest, accusing him of embezzling US $2.7 million of clients’ money. Karpeles, 30, a French national, has reportedly denied wrongdoing.

Yet these charges represent only a tiny fraction of the 850,000 bitcoins worth around $200 million at today’s exchange rate, or about half-a-billion dollars at the time of the MtGox collapse. So the wait to hear what really occurred continues.

“It is only natural for law

Read more ... source: TheBitcoinNews