Mt. Gox hacked to the tune of 350 million dollars of bit coins.

This is almost beyond belief. This could well be the end of bit coin as we know it as a currency. It is not clear what recourse people have at this point.

Mt. Gox, once the world’s largest bitcoin exchange, has gone offline, apparently after losing hundreds of millions of dollars due to a years-long hacking effort that went unnoticed by the company.

The hacking attack is detailed in a leaked “crisis strategy draft” plan, apparently created by Gox and published Monday by Ryan Selkis, a bitcoin entrepreneur and blogger (see below). According to the document, the exchange is insolvent after losing 744,408 bitcoins — worth about $350 million at Monday’s trading prices. The plan paints a bleak picture of the exchange’s finances and outlines an arbitrage scheme to restore the exchange to solvency. “The reality is that Mt. Gox can go bankrupt at any moment, and certainly deserves to as a company,” the document states.

WIRED couldn’t confirm the authenticity of the document. Reached Monday night, a Gox representative declined to comment on the document and referred us to the company’s webpage, before abruptly hanging up. But the website went offline a few hours after the company suspended trading on its exchange, and if the document is indeed authentic, the situation it described could reverberate across the world of bitcoin and possibly hamper the future of the digital currency.

Bitcoin insiders had been bracing for the worst from Mt. Gox for weeks, but the magnitude of the apparent theft — which would be the largest bitcoin heist ever — and the company’s alleged plan to replenish its stock of bitcoins took even seasoned bitcoiners by surprise. “Gox is the worst-run business in the history of the world,” said Roger Ver, in an instant message interview. Ver is a bitcoin advocate who lives across the street from Mt. Gox’s Tokyo offices and tried to help out the troubled exchange the last time it was hacked, back in 2011.

A coalition of bitcoin businesses — including bitcoin wallet-makers Coinbase and Blockchain — quickly put out a statement as news of the hack spread. “This tragic violation of the trust of users of Mt. Gox was the result of one company’s abhorrent actions and does not reflect the resilience or value of bitcoin and the digital currency industry,” they said. “There are hundreds of trustworthy and responsible companies involved in bitcoin.”

Wired article on Mt. Gox theft

The .pdf that apparently discusses what happened and Mt . Gox options

http://www.scribd.com/mobile/doc/209050732

PDF discussing what happened

This is so unreal.. Someone today has apparently pulled off one of the biggest thefts in history. I suppose my question is does this immediately de value the bit coin to the point that the person/organization will not be able to convert it into $ value. It would seem the CIA or FBI or NSA could figure out where the attack came from.

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Mt. Gox headquarters in Tokyo.

By now, Mt. Gox’s fate is more or less sealed. The Bitcoin exchange probably won’t be bailed out, CEO Mark Karpeles will move on, and the rest of the Bitcoin economy will move on as if this was just a bump in the road. But as the community recovers, it’s left a single, thorny question unanswered: who took $400 million worth of bitcoins from Mt Gox’s vault?

THE THEFTS “WENT UNNOTICED FOR SEVERAL YEARS.”

According to the leaked “Crisis Strategy Draft,” the thefts “went unnoticed for several years,” which means the attackers had access long before price surges turned Bitcoin into a hot topic for the startup crowd. Almost from the beginning, Mt Gox’s accounts were leaking money, and as the currency grew in value, the leak turned into one of the largest bank heists ever — more than 1 out of every 20 bitcoins in the world vanished without a trace. In a system built on technologically assured security and transparency, how could something like this happen?

MUCH OF THE STORY DOESN’T MAKE SENSE

The polite, public explanation for this is that a transaction bug in Mt. Gox’s system enabled the theft, and the team just wasn’t sharp enough to spot it — but there’s a lot about the story that doesn’t make sense. Mt. Gox seems to have been uniquely unprepared for the bug, targeted early, and hit with losses on an unprecedented scale. Other exchanges shut down briefly over the bug, but most reopened within a matter of days and without significant losses. Whoever was exploiting the bug prioritized Mt. Gox over all other targets, maintaining the exploit for years before any red flags were raised.

Then there’s the scale of the theft: 744,408 bitcoins, roughly 6 percent of all the bitcoins in the world. Even the sloppiest of audits should have shown that something had gone wrong, that money was flowing out of Gox accounts — but the company didn’t call for help until the last possible minute, when the gap had grown so large that it could no longer function. For many, the story just doesn’t add up.

who stole 400 million from Mt. Gox

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7 thoughts on “Mt. Gox hacked to the tune of 350 million dollars of bit coins.

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