Tokyo Police Suspect an Inside Job in Disappearance of 99% of MtGox Coins, Arrests Possible

Tokyo police believe that fraud, possibly an inside job, was responsible for 99% of the approximately 650,000 bitcoins that disappeared

Tokyo police believe that fraud, possibly an inside job, was responsible for 99% of the approximately 650,000 bitcoins that disappeared from MtGox. Only 1%, or 7,000 bitcoins, were lost due to an external hacking.

The Tokyo Metropolitan Police Department Cyber Crimes Unit and officers from the White Collar Crimes Division began investigating in July. At the time, a police spokesman said that criminal activity was suspected.

Join the iFX EXPO Asia and discover your gateway to the Asian Markets

Police now suspect that someone familiar with the inner workings of MtGox gained access to the coins. MtGox had previously blamed a flaw in the Bitcoin protocol for the losses, saying that it was responsible for allowing outside attackers to access the coins. On the recent reports, former CEO Mark Karpeles reportedly said in an e-mail:

Suggested articles

What to Look for in a Forex Technology Provider?Go to article >>

“There’s not much I can say at this point, except the fact that I will continue investigating in order to find what really happened.”

Police have been analyzing internet connection records for various transactions. They reportedly found that customer funds had been pooled by unknown parties uncorrelated with customer accounts. They may also be making arrests within the coming weeks.

Should the police successfully uncover the guilty parties, it would be a first for a case of this kind. Enforcing the bitcoins’ safe return, however, is another story. Decentralized and outside the power of any governing authority, the most police can do is provide some incentive for the thief to cough up the coins – if they’re still accessible.

Got a news tip? Let Us Know