Lost Bitcoins worth £70m found in old virtual wallet
Tim Walker is The Independent’s Los Angeles correspondent, covering entertainment and other concerns from the West Coast of the US. He was previously a features writer and the editor of the paper’s diary column. His first novel, Completion, is being published in January 2014.
Friday 21 March 2014
Bitcoin earned its reputation as a virtual currency free of the control and carelessness of the global financial system – but, if anything, Bitcoin exchanges have proved to be even less competent than the banks.
The Tokyo-based MtGox exchange, which filed for bankruptcy in February after mislaying most of its crypto-currency, announced on Thursday that it had stumbled across 200,000 Bitcoins hidden in a digital storage file, or “old-format wallet”.
Last month, MtGox’s chief executive, Mark Karpeles, said it had lost 850,000 Bitcoins, worth about £270m. Some 750,000 of those belonged to customers. The exchange, Mr Karpeles claimed, was left with just 2,000 Bitcoins. But according to a statement posted on the MtGox website this week, when the company researched its older “wallets”, unused since June 2011, it found the 200,000 Bitcoins, worth almost £70m today.
As he declared bankruptcy on 28 February, Mr Karpeles said technical issues had opened the door to hackers to make fraudulent withdrawals from the exchange, hence its dramatic losses. This week’s news, however, raises questions about exactly where the 650,000 Bitcoins still missing might be. MtGox is now the defendant in a class-action lawsuit by customers who argue that the exchange deliberately misled them by claiming to offer quick, secure trading.
Bitcoin first emerged online in 2009 as an alternative to currencies shaken by the global financial crisis. It has grown in popularity as a way of moving funds across borders anonymously, independent of banks and governments. Beloved by tech geeks and libertarians, Bitcoin has drawn criticism for facilitating criminal deals, and for its dramatic instability.
At the beginning of 2013, a single Bitcoin was worth a little under £8. By December 2013, its value had soared to around £720. But by this week, it was back down to £360. There are more than 12 million Bitcoins in circulation, and they can be stored on a computer network, on a dongle or even as an access code scrawled on a napkin.
In December some 96,000 Bitcoins were stolen from users of an online bazaar known as Sheep Marketplace, where the currency was used anonymously to buy products such as drugs and weapons. Bitcoin remains unregulated, and users have little recourse when their stash goes astray.
MtGox was conceived as an online exchange for the illustrated trading cards used in the fantasy game Magic: The Gathering, hence the name MtGox – “Magic: The Gathering Online eXchange”. Its collapse was followed this month by the shutdown of a less prominent Bitcoin exchange, Flexcoin, which also claimed to have been robbed by hackers.
Bitcoin’s anonymous creator is known only by the online name “Satoshi Nakamoto”. On 6 March, Newsweek published a story claiming this was Dorian S Nakamoto, 64, a Japanese-American computer engineer in Los Angeles. Mr Nakamoto this week said, via his lawyers, that he “unconditionally” refutes the magazine’s report.
- 1 Nigel Farage: Me vs Russell Brand on Question Time – he's got the chest hair but where are his ideas?
- 2 Harry Potter fans can apply to the Hogwarts-inspired College of Wizardry
- 3 Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
- 4 Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
- 5 Orange Wednesdays are no more
Weather bomb in pictures: Storms cuts power for tens of thousands – and snow is on the way
Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
Russell Brand was rendered speechless on Question Time by this man
Fury at Airbus after it hints the super-jumbo may be mothballed
Disgruntled RBS worker writes hilarious open letter to Russell Brand after anti-capitalist publicity stunt leaves him hungry
Nigel Farage's approval rating hits 'record low' as popularity suffers in wake of Ukip sex scandal
Nigel Farage defends Kerry Smith 'ch***y' comment: 'If you are going for a Chinese, what do you say you’re going for?'
Pakistan school attack live: Taliban kill at least 132 children in 'horrifying' massacre
Sony hack: Angelina Jolie branded 'seriously out of her mind' in further embarrassing leaked email saga
Panic Saturday: 13 million Britons spend £1.2bn – while 13 million others across the country live in poverty unable to afford food
£65000 - £80000 per annum: Recruitment Genius: Finance Director required to jo...
£15000 - £25000 per annum: Recruitment Genius: This is a unique opportunity fo...
£50000 per annum + 26 days holiday,pension: Ashdown Group: A highly successful...
£27000 per annum + pension + holidays: The Jenrick Group: A Quality Technician...