Never knew of the ability to give your private key on MtGox. Seems like a ridiculous method of deposit unless they immediately moved the coins to an address that they fully controlled. And only verified the funds once those coins had moved.
You do not own coins unless you (and only you) have the private key.
I have used that possibility myself one or two times. It was very quick in increasing your bitcoin balance... I guess the software internally tried to sweep your private key in the meanwhile (move the funds onto the exchange's addresses).
While the network was refusing the sweeping transactions (the coins where younger than 100 blocks) the miner could:
- Request a withdrawal. Probably there was no control on the recent activity of the user and part of the wallet could probably satisfy the request and, as I wrote a well known developer told me that Mt.gox used often the cold wallet because his hotwallet was stucked with coinbase coins...
- Sell the newly "deposited" bitcoins on the market
- Just wait. The balance was probably not affected anyway
If my hypothesis is good at the expiring of the 100th block the user should have moved the coins to a safer address maybe also depositing them onto the exchange itself this time with a normal bitcoin deposit.
Again I'm sorry these are only speculation but being them actually feasible it could give someone with enough skills new paths to investigate.
I haven't personally lost any money on the exchange. I finished trading over there one month or two before but I don't blame those who have gone on.
I was a little wise but mostly lucky and I feel sorry for the people who were not and I myself lost some money on an other exchange