Quote from: smooth on August 03, 2015, 06:30:16 AM

Quote from: Melbustus on August 03, 2015, 05:56:07 AM

I used to think some variant of Peter R's theory made the most sense. What I could never quite reconcile, though, was that there was no blockchain trail of stolen coins in 2011. So I figured that maybe the 2011 hack involved the hackers copying a bunch of code, finding exploits a while later (or having installed a backdoor), and then slowly bleeding Gox in relatively small amounts over the years.

One easy way to reconcile this is that the coins were not stolen but just lost: private keys erased with no usable backup, either by a hacker (vandalism) or by Karpeles himself (error).

Yeah - certainly possible.

Quote from: smooth on August 03, 2015, 06:30:16 AM

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But honestly, reading that Ashley Barr thread makes me think that the whole thing more likely has a far simpler explanation; ie, Karpeles just spent a few million of the fiat deposits that came into the bank account (which was his personal account(!)) frivolously, while crediting traders with BTC. Given prices at the time (mid-2011 through 2012), it would only have taken <$5m in lavish "corporate" spending to run up ~550,000BTC in liabilities. Unfortunately there's a long history of startups proving that it's not hard to blow a few million bucks on dumb stuff.

In general terms the idea he spent the money is plausible but the low level specifics don't work. He would have had to credit them with phoney fiat, not BTC. Without some other fraud, this would not affect the balance of BTC on the exchange.

Why couldn't he just have created fake BTC sell orders and let 'em get filled, thereby effectively crediting traders with positive BTC balances (comprised of bitcoin that never existed)? ....all the while spending the fiat out of the personal/corporate bank account?

Quote from: JapanTimes

Karpeles is suspected of manipulating data on the exchanges computer system in 2013 to artificially create about $1 million in bitcoins.

http://www.japantimes.co.jp/news/2015/08/03/national/crime-legal/mtgox-ceo-admits-tweaking-account-faces-fresh-claim-misusing-8-9-million-deposits/#.Vb_kJnVGjUb

...some convoluted way to spend fiat while trying to make the books balance?