Advertisements

Executive Arrested in Japan Over Disappearance of $390 Million in Bitcoins

bitcoins

The global virtual currency community was shaken by the shuttering of MtGox, which froze withdrawals in February 2014 because of what the firm said was a bug in the software underpinning Bitcoin that allowed hackers to pilfer them.

Japanese police on Saturday arrested Mark Karpeles, head of the collapsed MtGox Bitcoin exchange, over the disappearance of about $390 (£250 million) worth of the virtual currency, local media said.

France-born Karpeles, 30, is suspected of having accessed the exchange’s computer system and falsifying data on its outstanding balance, Kyodo News and public broadcaster NHK said.

“They say it’s under investigation. That’s all they say. They seem to refuse to make public more precise information about MtGox’s own (information) and how and when it was stolen, if it was really stolen.”

—  French investor, to AFP last year at a creditors’ meeting in Tokyo

The global virtual currency community was shaken by the shuttering of MtGox, which froze withdrawals in February 2014 because of what the firm said was a bug in the software underpinning Bitcoin that allowed hackers to pilfer them.

Police did not immediately confirm Karpeles’ arrest but local television footage showed authorities taking him into custody.

The exchange – which once boasted of handling around 80 percent of global Bitcoin transactions – filed for bankruptcy protection soon after the cyber-money went missing, admitting it had lost 850,000 coins worth 48 billion yen ($387 million at today’s exchange rate).

ross-ulbricht_2691143b

Ross Ulbricht Silk Road mastermind

“A cloud has been hanging over the Tokyo-based exchange and Karpeles as investors have demanded answers, and called on the firm to publicise its data so that hackers around the world can help analyse what happened at MtGox.”

Karpeles later said he had found some 200,000 of the lost Bitcoins in a “cold wallet” – a storage device such as a memory stick that is not connected to other computers.

Bitcoins are generated by complex chains of interactions among a huge network of computers around the planet and are not backed by any government or central bank.

A cloud has been hanging over the Tokyo-based exchange and Karpeles as investors have demanded answers, and called on the firm to publicise its data so that hackers around the world can help analyse what happened at MtGox. Read the rest of this entry »

Advertisements