Feeds

Mt Gox staff tried to warn CEO of Bitcoin loss risks – reports

Fears over 'customer funds covering operating costs' says Reuters

Intelligent flash storage arrays

Staff at fallen Bitcoin exchange Mt Gox in Japan have claimed that they raised alarms about how the company was handling client funds as long ago as 2012, according to Reuters.

In this report, the unnamed “current and former employees” of Mt Gox were concerned that “customer funds were diverted to cover operating costs” of the popular website.

These expenses went far beyond the day-to-day running of Mt Gox's offices in a Tokyo tower: they included “high-tech gadgets such as a robot and a 3D printer and a souped-up, racing version of the Honda Civic imported from Britain for [CEO Mark] Karpeles,” the staffers alleged to Reuters.

However, the same sources also noted that Karpeles said customer money was not being used to fund the business, "but [he] declined to provide details on how the business had covered any loss," the newswire reports.

The exchange claimed in 2012 it was handling US$14 million in monthly Bitcoin transactions, which would have been around 90 per cent of Bitcoin trade at the time. In August 2012, to assure traders it was solvent, it claimed on its site that its transaction fees were netting it US$1,500 per day.

In April 2013, Karpeles claimed – again according to Reuters – that it processed US$20 million a day.

As is now well documented, Mt Gox's collapse early this year stung account holders for about US$450 million in losses at today's prices for the crypto-currency. The company has also been unable to account for US$27 million in cash holdings. ®

Intelligent flash storage arrays

More from The Register

next story
You really need to do some tech support for Aunty Agnes
Free anti-virus software, expires, stops updating and p0wns the world
Attack reveals 81 percent of Tor users but admins call for calm
Cisco Netflow a handy tool for cheapskate attackers
Privacy bods offer GOV SPY VICTIMS a FREE SPYWARE SNIFFER
Looks for gov malware that evades most antivirus
Patch NOW! Microsoft slings emergency bug fix at Windows admins
Vulnerability promotes lusers to domain overlords ... oops
Oi, Europe! Tell US feds to GTFO of our servers, say Microsoft and pals
By writing a really angry letter about how it's harming our cloud business, ta
prev story

Whitepapers

Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Protecting users from Firesheep and other Sidejacking attacks with SSL
Discussing the vulnerabilities inherent in Wi-Fi networks, and how using TLS/SSL for your entire site will assure security.
Saudi Petroleum chooses Tegile storage solution
A storage solution that addresses company growth and performance for business-critical applications of caseware archive and search along with other key operational systems.