Hacked documents cast suspicion on Mt. Gox CEO Karpeles

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Evidence based on documents acquired from the hacked accounts of Mt. Gox CEO Mark Karpeles leads some jilted users to believe the company's very public downfall was actually an internally executed fraud.

Amid those claims, a federal judge froze Karpeles' U.S. accounts Tuesday while former Mt. Gox users push for Karpeles to reveal more information on Mt. Gox's collapse, according to a Reuters article.

Hackers used Karpeles' own blog and social network accounts to obtain and publicly release spreadsheets and other logs of Mt. Gox's finances that show the company controlled 951,116 bitcoins at the time of collapse. That led to supposition across message boards that Karpeles retained the sum he claimed was lost to hackers as the result of a "weakness in [their] system."

Karpeles said during a Feb. 28 press conference that Mt. Gox--which had been denying bitcoin withdrawals since Feb. 7 and suspended all trades on Feb. 25--was the victim of a cybertheft of more than 750,000 user bitcoins and 100,000 of its own, or about $480 million. He declared the exchange bankrupt, sending markets trading the cryptocurrency into a tailspin.

Mt. Gox has not commented on the recently leaked material, but some online users have verified the authenticity of the logs by tracking their own transactions with the exchange, according to an article in Wired.

Karpeles blamed the loss on a "known issue in the bitcoin protocol that enabled hackers to trick the company's software into thinking transactions failed. Apparently, Mt. Gox's accounting software didn't deal with this flaw and could be tricked into sending repeated bitcoin payouts to the same customers," the Wired report explained.

Some argue that the hacked documents do not support fraud allegations. "Given Mt. Gox's claim that the bitcoins were stolen without anyone at the company noticing, it would make sense that the company's official balance sheets still show a much larger number of bitcoins. Ultimately, even if the document is authentic, it proves nothing one way or the other," Wired noted.

For more:
- read the Reuters article
- read the Wired article

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