• 1 hour Walmart Reaches Out To Chilean Government For Protection
  • 5 hours The Most Exciting Gold Find Of The Decade
  • 7 hours Mining Boom Sparks Deforestation Concerns
  • 1 day The Cannabis Culling Has Wall Street Disappointed
  • 1 day Vigilante Offers $100,000 Bounty To Hack Banks
  • 2 days The Dairy Industry Is Dying
  • 2 days The Most Impressive Electric Vehicle Of The Year
  • 3 days Gold Miners Are Having A Stellar Second Half
  • 4 days How 3D Printing Is Turning Each And Every Industry On Its Head
  • 4 days Is The $3.5 Trillion Healthcare Industry About To Get Much More Transparent?
  • 5 days Gamblers Are Betting Big On Trump’s Impeachment
  • 5 days Even Banks Can't Answer Aramco's Trillion Dollar Question
  • 6 days Will Bezos Buy The Seattle Seahawks?
  • 6 days 6 Tech Trends Transforming The Travel Industry
  • 7 days Ousted Uber CEO Cashes Out $500 Million In Stock
  • 7 days Trump Prepares For Another Key Tariff Decision
  • 7 days The Free Money Bubble Is About To Burst
  • 8 days The Crushing Reality Of Poverty In America
  • 8 days Should You Buy Into The World’s Largest IPO?
  • 8 days The Infinite Possibilities Of Cosmic Energy
Has Bitcoin Become A Bona Fide Safe Haven?

Has Bitcoin Become A Bona Fide Safe Haven?

On Tuesday, Bleakley Advisory Group’s…

Is Silver Gearing Up For A Rally?

Is Silver Gearing Up For A Rally?

While many are talking about…

Bitcoin Rally Sets Stage For The Big Short

Bitcoin Rally Sets Stage For The Big Short

The latest data by CME…

  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