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Showing posts with label Bitcoin creator. Show all posts
Showing posts with label Bitcoin creator. Show all posts

Tuesday, August 25, 2015

Bitcoin CEO arrest leaves long trail of unanswered questions

Bitcoin trader Kolin Burges from London protests against Tokyo-based bitcoin changer MtGox in front of the company's office in Tokyo on February 26, 2014.



Tokyo (AFP) - The arrest of MtGox boss Mark Karpeles has begun to shed light on the defunct Bitcoin exchange after hundreds of millions of dollars in virtual currency vanished from its digital vaults last year.

But as details of a lengthy investigation by Japanese police trickle out, at least one crucial question remains unanswered: where is the money?



On Friday authorities issued a fresh arrest warrant for Frenchman Karpeles over claims he stole several million dollars from clients, including about $48,000 allegedly spent on a luxury canopy bed.

Karpeles, 30, who has reportedly denied the allegations, was initially taken into custody earlier this month and has been held without formal charges for three weeks, as allowed under Japanese law.

A fresh warrant resets the clock on how long police can hold him and grill the self-described computer geek over Tokyo-based MtGox's missing Bitcoins.



So far, police have accused Karpeles of manipulating data and stealing sums that amount to just a fraction of the 850,000 coins -- worth around $480 million at the time, or $387 million at current exchange rates -- that disappeared last year.

MtGox, which once said it handled around 80 percent of global Bitcoin transactions, filed for bankruptcy protection soon after the cyber-money went missing, leaving a trail of angry investors calling for answers.

The company initially said there was a bug in the software underpinning Bitcoins that allowed hackers to pilfer them.

Karpeles later claimed he had found some 200,000 of the lost coins in a "cold wallet" -- a storage device, such as a memory stick, that is not connected to other computers.

But the whereabouts of the money and Karpeles' involvement appear far from solved. "If there were instances of mismanagement or fraud like this carried out by Mark Karpeles, then he should be held accountable," Bitcoin investor Kim Nilsson told AFP.
Mark Karpeles, head of the MtGox Bitcoin exchange, …

(But) if these charges against (him) don't adequately explain where all the Bitcoin ... money went, then there are still unresolved questions, quite possibly additional crimes and criminals, that must be investigated further."

 - Real or fake? -

Nilsson also questioned whether MtGox's Bitcoin deposits were even real in the first place.

"Did MtGox at any point actually hold the coins in question, or have there been faked deposit entries merely making it look that way?" he asked MtGox reportedly kept its own funds and clients' money in the same bank account.

In an interview with Japan's top-selling Yomiuri newspaper, Karpeles' mother said her "genius" son learned computer languages at age three and started making simple programmes of his own two years later.

Back in 2006, Karpeles -- who reportedly lived in an $11,000-a-month penthouse Tokyo apartment -- wrote on his blog that computer crime was "totally contrary to my ethical principles".

But four years later, a Paris court sentenced him in absentia to a year in prison for hacking. He had come to Japan to work for a web development company in 2009 and later got involved with the Bitcoin exchange. - Tangible object -

Investors have called on the firm's court-appointed administrators to publicise its data so that experts around the world can help analyse what happened at MtGox.

But the case presented a complex challenge to Japanese police, as financial watchdogs around the world struggle to work out how to regulate digital money.

Unlike traditional currencies backed by a government or central bank, Bitcoins are generated by complex chains of interactions among a huge network of computers around the planet.

"The Bitcoin case is really an embezzlement case, but embezzlement has to involve a 'tangible object,'" said Hisashi Sonoda, a criminal law professor at Japan's Konan University.

"Japanese criminal law treats digital currency as 'data,' not what we call 'tangible object' in a legal sense."

Backers say virtual currencies, which started to appear around 2009, allow for an efficient and anonymous way to store and transfer funds online.

But critics argue the lack of legal framework governing the currency, the opaque way it is traded and its volatility make it dangerous.

Following Karpeles' arrest, Tokyo vowed to boost digital-currency regulations.

Japan's penal code "is not really catching up with quickly changing business models", hampering authorities' investigation, Sonoda said.

"If there was a clause or a fresh law targeting digital currency, that would have been helpful for investigators."

AFP By Hiroshi Hiyama

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 Bitcoin: the new gold or a giant bubble? PETALING JAYA: Malaysians have been warned against investing in virtual or Internet money as ...

Sunday, March 30, 2014

Be wary of virtual money! First Bitcoin launched in Malaysia


Bitcoin: the new gold or a giant bubble?

PETALING JAYA: Malaysians have been warned against investing in virtual or Internet money as their savings could be wiped out if the exchange is hacked or runs into financial troubles.

Over the last month, two major Bitcoin exchanges in Japan and Canada have gone offline, filed for bankruptcy or closed down after claiming more than US$500mil (RM1.6bil) in losses due to hacking.

In light of the controversy, Bank Negara has advised the public to be cautious of the risks involved in using digital currency, stressing that Bitcoin is not recognised as legal tender in Malaysia.

“The Central Bank does not regulate the operations of Bitcoin. The value is subject to fluctuations, (hence) the value of the investments may not be preserved,” an official told Sunday Star.

China, Thailand, Vietnam, Indonesia, Germany, France and Russia, have also issued similar warnings or banned the use of virtual currency. In Singapore, there are plans to regulate virtual currency exchanges and vending machines to address concerns that they could be used for money laundering or to fund terrorism activities.

A check by Sunday Star shows that in Malaysia, there are at least 12 local Bitcoin-related groups on Facebook, including Malaybtc Bitcoin, Bitcoin Malaysia #1 Group, Bitcoin Malaysia Open Group, Bitcoin Malaysia (Trader), Cryptocurrency Malaysia (Bitcoin, Litecoin, Dogecoin, etc) and Malaysia Bitcom Info.

Last week, Bitcoin rolled out its first auto vending machines (AVM) at the Bangsar Shopping Complex in Kuala Lumpur and Gurney Plaza in Penang. Singapore-based Numoni Pte Ltd, which developed and launched the AVMs here, estimated that there were some 2,000 Bitcoin users in Malaysia and was targeting to install 100 Bitcoins AVMs within three years.

Its CEO Norma Sit said that Bitcoins were still in demand despite different countries deliberating its acceptance.

“The AVM lets the public buy small amounts of Bitcoin, which in many countries, is seen as an international voucher that can be used to barter for goods online,” she said.

Bitcoin Malaysia founder Colbert Low said Bitcoin had many unreported successes but was unfairly put in a bad light because of the recent controversy outside of Malaysia.

On March 10, Mt Gox, the world’s biggest Bitcoin exchange filed for bankruptcy protection in the United States, two weeks after its Tokyo-based exchange reportedly took its entire operation offline and filed for bankruptcy in Japan after claiming to have lost around US$500mil (RM1.6bil) to hacking.

Admitting that there were failures in companies and individuals that provided Bitcoin services, Low stressed that the Mt Gox case was “not Bitcoin” but specific to the exchange.

He described Bitcoin as a “building block for the future” and an innovative decentralised payment system software.

“Currency pricing is just one feature.

“Using it as a speculative tool for investment is up to the individual. Due diligence is needed and you cannot blame Bitcoin for losses suffered,” he said, cautioning that like any new technology, there are risks involved and bugs to fix.

Contributed by Christina Chin The Star/Asian News Netowork

First Bitcoin AVM launched in M’sia


KUALA LUMPUR: Singapore-based payment transaction provider Numoni Pte Ltd has introduced the first Bitcoin auto vending machines (AVM) in Malaysia.

One month after it launched its Bitcoin AVM in Mobile World Congress 2014 in Barcelona, Spain in February 2014, Numoni has installed its Bitcoin AVMs in Bangsar Shopping Centre in Kuala Lumpur and at Gurney Plaza in Penang.

Earlier this year, Bank Negara Malaysia issued a statement announcing that the Bitcoin is not recognised as legal tender in Malaysia.

"The Central Bank does not regulate the operations of Bitcoin. The public is therefore advised to be cautious of the risks associated with the usage of such digital currency," it had said.

Called the Numoni Nugen B2-Spirit machine, Numoni had also earlier launched its machines at four prominent locations in Singapore where people can transact.

Numoni CEO Norma Sit said while different countries are deliberating over the acceptance of Bitcoin, Bitcoin remains in demand.

"The Numoni Bitcoin Vending Machines enables the public to participate in buying small amounts of this crypto-currency that is seen in many countries as an international voucher that can be used to barter for goods online. The machines, which are assembled in Malaysia in our Senai factory, was fully developed by Numoni in Singapore since 2012," Sit said in a statement.

Numoni targets to install 10 Bitcoin AVMs nationwide within one year and 100 AVMs within three years.

Bitcoin, a digital crypto currency, had taken centrestage on financial news recently with much focus on issues surrounding Mt Gox, a Bitcoin Exchange based in Tokyo, that was reportedly hacked. Nonetheless, investors and industry players continue to strongly support the virtual currency that is today one of the largest in the world.

Numoni has appointed BTC Future Sdn Bhd for the distribution of Bitcoin AVMs in Peninsula Malaysia.

The Numoni machines can be deployed to sell prepaid airtime and other voucher products on connection with telco gateways. Numoni will work with other industry partners in Malaysia to enable the sale of prepaid airtime on the Nugen machines with an intended roll-out in 2014.

The Numoni Bitcoin AVM reads the user's Bitcoin QR Code, and completes the request to purchase with the insertion of fiat money. The Numoni Bitcoin AVMs can be linked to multiple Bitcoin Exchanges enabling the machines to present the best available price at the time of the requested transaction to Bitcoin customers.

Customers can buy and sell Bitcoins at Numoni Bitcoin AVMs. The machine enables users to sell their Bitcoins through a simple cash-out process working with retail merchants' cash-out-points. Numoni has selected not to implement the cash-out mechanism in Singapore or Malaysia.

"From inception, Numoni understood that virtual currencies and mobile wallets will have tremendous impact on daily lives, in light of the incredible global penetration of mobile phones that today reaches all communities," said Sit.

Sit added that it was a matter of time before virtual currencies are adopted to make life easier for billions who remain underserved by banks and financial institutions.

- Sunbiz@thesundaily.com

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