• 3 hours Tesla, Apple Claim China Is Stealing Intellectual Property
  • 5 hours EV Giants Duke It Out For Battery Dominance
  • 22 hours Tech Billionaire Takes Aim At Google
  • 1 day Chinese Police Bust Largest Ever Illicit Crypto Mining Operation
  • 1 day Expect A Pullback Before Gold's Next Major Rally
  • 1 day Why Interest On Gold Matters
  • 2 days Ten Extravagant Food Items For The Wealthy Only
  • 2 days Why Saudi Arabia Won't Give Up On The Aramco IPO
  • 3 days $32 Million Crypto Heist Halts Tokyo Exchange
  • 3 days Is A Gold Selloff Looming?
  • 4 days Central Banks Are Stashing Gold And Dumping Treasuries
  • 4 days Three Cannabis Trends Flying Under Investors’ Radars
  • 5 days $1.3 Billion In Cocaine Found On JPMorgan Vessel
  • 5 days Amazon Teams Up With Lady Gaga To Win Over Generation Z
  • 5 days Dollar Falls As Powell Teases Rate Cuts
  • 5 days Will The World's First Trillion Dollar Company Ever Bounce Back?
  • 6 days Many Americans Will Never Stop Working
  • 6 days Mozilla vs DarkMatter: The Cyber Espionage End Game
  • 6 days Chile Cracks Down On Environmental Infractions
  • 6 days Warning Signs Emerge For Boeing
Bitcoin Rally Sets Stage For The Big Short

Bitcoin Rally Sets Stage For The Big Short

The latest data by CME…

Bitcoin Eyes $10,000 After Another Bullish Push

Bitcoin Eyes $10,000 After Another Bullish Push

Bitcoin price crossed the one-year…

Has Bitcoin Become A Bona Fide Safe Haven?

Has Bitcoin Become A Bona Fide Safe Haven?

On Tuesday, Bleakley Advisory Group’s…

Michael Kern

Michael Kern

Safehaven

Michael Kern is a newswriter and editor at Safehaven.com, Oilprice.com, and a writer at Crypto Insider. Michael has several years of experience covering cryptocurrencies, and…

Contact Author

  1. Home
  2. Cryptocurrencies
  3. Bitcoin

What The Mt. Gox Trial Can Tell Us About Bitcoin Markets

Court

The two-and-a-half year Mt. Gox trial is nearing an end, and former CEO Mark Karpelès is sticking to his guns, denying the embezzlement and manipulation charges levied against him.

A Brief Recap

Mt. Gox was the world’s largest bitcoin exchange, at one point boasting between 70-80 percent of the world’s trading volume. Because of this, the exchange held tremendous sway over crypto markets in their earlier years.

Though the exchange had fallen victim to hacks on several occasions, it suffered its final blow in February 2014 when an unnamed attacker or attackers allegedly managed to get away with nearly 850,000 bitcoin. Within weeks, Mt. Gox was declared insolvent and filed for bankruptcy protection in both Japan and the United States.

The exchange later found 200,000 bitcoin on an old digital wallet.

Though the details of the hack remain vague, some online theories suggest the company never held the total amount of bitcoin that it had claimed.

Bitcoin’s Biggest Trial

In 2015, Mark Karpelès was officially charged in Japan for embezzling coins from the exchange and artificially inflating trading volumes.

Though Karpelès isn’t accused of being involved in the hack that took down the exchange and subsequently led to a 2-year bitcoin bear market, the ex-CEO has been charged with manipulating data on the exchange and stealing funds that were to be used in the growth and development of the business.

The trial, which began in July 2017, has revealed some startling details about the business, however. Related: Bad News Builds For Global Markets

First and foremost, an exchange between then-owner Jed McCaleb and Karpelès reveals that Karpelès purchased the exchange with as much as 80,000 bitcoin already missing-in-action, with McCaleb suggesting that Karpelès could essentially sneak the coins back into the operation before it became a problem.

The trial has also confirmed the existence of a “Willy Bot,” or automated trading bot, which could have been used to artificially inflate bitcoin trading prices on the exchange.

Though Karpelès’ defense claims that this bot was used “for the good of the company,” and was not illegal, and that hackers were responsible for the fraudulent trading that resulted in increased upward pressure on bitcoin prices, only the ongoing trial will be able to put an end to this mystery.

Could This Happen Again?

Karpelès’ trial is scheduled to wrap up in March 2019., but it’s clearly had an impact on the markets and the community.

Exchanges are now held to extremely high standards of security and accountability, though some bad actors are still making waves. In 2018 alone, over $700 million has been lost from hacks on exchanges, including the Canadian MapleChange ‘hack’ which many have called an exit scam.

Even with stricter regulations, attacks and scams do happen and will likely continue to happen for some time no matter how seriously a company takes its security.

Always do your due diligence and trade at your own risk!

By Michael Kern via Crypto Insider

More Top Reads From Safehaven.com

Back to homepage

Leave a comment

Leave a comment