Japanese Police Say Mt. Gox Collapsed Due to Partial Inside Job

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The Japanese Police Says Mt. Gox Collapsed Due to Partial Inside Job

When last year Mt. Gox, the leading Bitcoin exchange collapsed, ForexMinute had reported and quoted the sources from the exchange that the top management of the company was somewhat accountable for the mess. Now, it is being confirmed by the investigating police agency that says it was a partial inside job.

According to the cops, the largest Bitcoin exchange’s fall was not just due to hackers but looks like a partial inside job. It is around ten months now since Mt. Gox Bitcoin exchange turned out the lights, blaming hackers or a bug in the Blockchain as reasons why 850,000 Bitcoin it held had suddenly disappeared.

A lot of hue and cry was made by the top management of the Bitcoin exchange that it was due to some loophole in the Bitcoin technology; however, later on the Bitcoin Foundation had cleared it that there was no role of the technology. Now that everything is becoming clear how someone from the exchange played a role, the investors who lost the money can get justice.

A report published in the Japanese paper Yomiuri Shinbun (English) showed that Tokyo Police investigating the event have found evidence that only about one percent of the lost Bitcoin disappeared due to hacking from outsiders. The report cites sources inside the department and suggests that the rest of the 650,000 Bitcoin still unaccounted for (200k popped up unexpectedly) were lost by an “unauthorized operation” of the system.

The Needle of Suspicion has always been on Inside Job

According to the report in the Japanese newspaper, the evidence shows unauthorized transactions by someone that did not correspond to any customer accounts. Also, there is no indication of who exactly was responsible; however, former CEO Mark Karpeles told media organizations in an email that he will “continue investigating” to find out what really happened.

Nonetheless, a Japanese police investigation that was launched in late July to try to find where the money went and how the Bitcoin were consumed, suspects that the other unaccounted for 643,000 Bitcoin were removed from customer accounts via an unknown party. According to the police sources, there will be some arrests within the next few weeks.

So far the Tokyo Metropolitan Police Department Cyber Crimes Unit and officers from the White Collar Crimes Division have been able to establish the fact that someone familiar with the exchange system may have embezzled the Bitcoins of the customers out from the company storage.

To contact the reporter of this story: Deepak Tiwari at deepak@forexminute.com