Quote from: Voodah on February 25, 2014, 05:02:41 PM

Quote from: crazy_rabbit on February 25, 2014, 04:17:37 PM

I don't think they lost 740,000BTC in the sense of "they had it" versus maybe they were selling Bitcoins they never really had in the first place. :-/

Yes but still... how can you not notice that amount?

If you've ever run any kind of website you know there's just no way...

No, c_r is saying they might have intentionally sold fictitious coins to customers -- in other words, a fractional bitcoin depository. Many users (such as traders) left a lot of real coins on the exchange for long periods, so there was always a sizeable reserve gox could draw against to fill withdrawal requests.

Gox could have injected their own trades into the order book (violating their written promise to never take either side of any trade). They would then pocket the real fiat that had been deposited, and update the "coin" buyers' accounts to show bitcoins which were not actually on deposit. An extensive review of the blockchain (with access to company records) could probably tell whether they actually received all coins that were "held" by accounts.

A simple way would be to create regular trading accounts, held by them, that were credited at some point with fake bitcoin balances ... then using those accounts to trade fake coins for customers' fiat, perhaps via Tor or a VPN. With over a million customers in the database, this might be easy to hide even from any forthcoming auditors. Especially if the software & accounting was as disorganized as it seems.

At least one employee/contractor would realize many "coins" in the system were never in the wallets. That person would have been motivated to hide the imbalance by adjusting the internal bookkeeping software. That takes one line of code (or a handful to obfuscate it well). People later taking over the company could find the discrepancy, though.

So far we have no evidence this happened, and the claim instead is that many coins that were in wallets no longer are.

It does seem an easy theft for any current exchange to do -- except the decentralized ones which are just getting started. Future exchanges can be designed (using multisignature transactions) to give customers full control over their coins and the ability to track them at all times.