The Mt Gox hack back in 2014 was one of the largest Bitcoin heists in history. Four years ago cryptocurrency was the relatively unknown domain of tech geeks and futurists so this did not make big news. The Tokyo based exchange handled as much as 70% of the world’s Bitcoin transactions at the time. It has been revealed that a UK company has been linked to the theft of 650,000 Bitcoins from the exchange.
Unraveling the Mt Gox robbery
According to a BBC report the London-based firm Always Efficient LLP claimed to be operating the exchange at the time though it was not clear who operated the company. Mark Karpeles, who operated Mt Gox, apologized to investors at the time and cooperated with the investigation, at the end of which the FBI arrested a Russian citizen in connection with the theft.
The exchange collapsed when clients could no longer withdraw their funds. For the first time since the hack Mark Karpeles has spoken out as he told the BBC in a Radio 4 investigation;
It felt like… when you fall from a building and you see the ground getting closer, and you feel like you are about to die. Mt Gox went from interesting project to being, I would say, a daily nightmare of dealing with banks, governments, people I never knew existed.
He said, explaining how the site grew rapidly beyond expectations. According to the report investigators now claim that almost half the stolen Bitcoins from Mt Gox ended up at rival exchange BTC-e. The FBI stated that this exchange was a hub for cyber-crime and filtering ill-gotten gains, often in Bitcoin. The exchange claimed to be operated by a British company called Always Efficient LLP. This was likely to be a shell company setup to facilitate the movement of money through several layers hindering the tracking process.
The FBI have linked two more Russians to the BTC-e exchange and documents revealed how the stolen Mt Gox money was laundered through various accounts, usernames, and email addresses allegedly controlled by a Mr Alexander Vinnik.
He was arrested last year in Greece and the US Department of Justice wants to extradite him to face 21 counts of money laundering and other financial crimes in the US. Karpeles was also arrested and charged with embezzlement related to payments worth $2.3 million which he denies.
Japanese bankruptcy laws state that the remaining Bitcoins on Mt Gox were valued at the going rate at the time of the incursion, $420. Those who lost out at the time are hoping to see those coins refunded at the current price which is over $10k. The case is ongoing but investors who lost out in 2014 could still come out on top due to the meteoric rise of Bitcoin over the past year.
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