The author says "MtGox operated at fractional reserve for years". A better and more conventional way to put it: it was <i>insolvent</i> for years.
The author states that the bitcoins were stolen over time, however, the graph shows that between June and November 2011 there is a gap due to missing data. It then opens in November 2011 with a huge gap between actual btc and expected btc of some 500k bitcoins. Practically almost all the "missing" bitcoins. Suggesting therefore that either they were "lost" sometime between June-November 2011 or they were hidden at the time somewhere on blockchain or that the authors have made some sort of mistake.<p>I am not sure how such a huge amount of bitcoins can be "lost" within such a short period of 4 months. Leaving open the option that there may be some mix up with the internal data or that the analysis is incomplete.
It's embarrassing for the Tokyo Metropolitan Police that they haven't cracked this case yet. They're one of the biggest police departments in the world and have extensive resources. Yes, their in-house computer crime department is new, but they could draw on expertise at the national level or from outside Japan.
How do you convert big amounts of bitcoins into cash, even over time, without leaving a trace? Isn't there bank account information involved leading to individuals, which a criminal investigation could request?
Thank you for these posts. We need to keep awareness of the issue as high as possible as it will become easier and easier for both the forces and liquidators to dilute the funds left for payout down to nothing over time.
What I take away from this is that despite a totally open and visible accounting system (the blockchain) it is still possible to hide transactions - no wonder we have been stuffed preventing tax evasion.
How do they know that those BTC went to exchanges? The probably can check which BTC went back to Mt Gox, but how do they know that a particular receiving address belonged to e.g. Bitcoinica?
Something I find eye-catching is that from Jul-Oct 2011, just shortly after the proof of solvency, the expected BTC holdings double while the observed BTC holdings don't seem to move very much. If that was a random hacker attack it would be exceptionally good timing.