The closure of Mt Gox was one of the biggest bitcoin related stories of 2014, despite it taking place early in the year. However, it’s now come to light that despite being one of the world’s prominent bitcoin exchanges and depositories, it was in-fact insolvent for a long time before its collapse, due to thieves cleaning outs its cold storage.
While we learned during the announced closure of the site that some sort of hack had taken place, which led to many thousands of coins being stolen, it wasn’t quite clear how long ago it had happened. Now though, investigations reported by FT, suggest that Mt. Gox might have been cleaned out in the summer of 2013, almost a year before its eventual collapse.
It wasn’t all in one big heist however, but several smaller transactions, which over a period of a few months siphoned off a few hundred coins at a time from Mt. Gox coffers and sent them to a different account entirely, always without an official transfer log. Investigators believe these transactions may have been carried out by a bot, autonomously ‘buying’ the currency using faked US dollars, therefore getting hold of the currency for no investment.
There has been speculation in the past that the site’s owner may have been responsible for the siphoning of coins, as well as founding the darknet drug marketplace Silk Road, but there doesn’t appear to be much evidence to support those claims.
Police investigations into Mt. Gox are continuing, following further pressure from creditors who lost out heavily on the site’s closure.
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KitGuru Says: Fortunately I never had any coins stored with Mt. Gox, but a lot of people did. Sadly that’s just one of the dangers with using a currency like bitcoin, and a good selling point for offline storage.