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Are Mt. Gox’s stolen bitcoins on the move?

On the same day that Newsweek claimed to have found the creator of Bitcoin, a vast amount of the digital currency is being moved.


Rob Price


There’s a new twist in the increasingly surreal story of Bitcoin. After half the world’s press spent yesterday chasing an elderly Japanese model train-collecting recluse around downtown Los Angeles because he shares a name with the anonymous inventor of the cryptocurrency, there has now been unprecedented and unusual movements on the blockchain.

The blockchain is a record of every Bitcoin transaction that’s ever taken place, shared between bitcoin users to do away with the need for a central bank to verify transactions. Whilst it’s totally anonymous, it is not—as people assume—untraceable. Hypothetically (though the processing power needed would be astronomical) you could build a model of every bitcoin transaction ever made with it.

The claims that Newsweek had found Bitcoin creator Satoshi Nakamoto sparked speculation that he might finally use his stored bitcoins (he allegedly holds more than 400 million dollars worth). And the last few weeks have also seen the collapse of the largest Bitcoin exchange Mt. Gox, and with it the apparent theft of 850,000 bitcoins, worth close to $500 million. It’s understandable then that members of the Bitcoin community have been particularly vigilant when it comes to unusual transactions.

As spotted on Reddit early this morning, 180,000 bitcoins have suddenly come into play. Their sudden movement amounts to the largest Bitcoin Days Destroyed (BDD) in the cryptocurrency’s history (BDD being a measure of the the number of bitcoins involved in the transaction multiplied by the time since they were last used). The figure is used as a measure of activity in the bitcoin economy. The 180,000 bitcoins amounts to 143 million BDD—meaning it’s been just under 800 days, or just over 2 years, since the coins were last moved.

What’s noteworthy about this $115 million-worth of Bitcoin is not just that it’s been moved, but how it’s continuing to move. As Reddit users have found, the sum is being successively split into smaller and smaller amounts in different wallets—almost as if someone was trying to hide it. A large pot of 180,000 BTC will always be easy to trace, but if it splits into two, then four, then eight, then 16, then 32, and so on, each wallet successively smaller? It suddenly gets a lot harder to keep track of. An interactive visualization of the activity can be found on here.

A visualization of the 180,000BTC’s movement, as of 9AM EST. Image via Zelgada/Reddit

There is no indication whatsoever as yet as to who controls the 180,000BTC, or indeed whether it still remains under their exclusive control. But the hysterical mood that has taken hold of the Bitcoin community over the last few days has led to rampant speculation. Satoshi Nakamoto has seemingly made a public statement for the first time in years—to assert he is not the hounded Californian Dorian Nakamoto—prompting early claims that he had at long last decided to cash in his hidden millions.

Since then, Reddit detective-work has focused on the vast bitcoin haul lost or stolen from MtGox. Mark Karpeles, the disgraced CEO of the exchange, has been the focus of intense vitriol from some sectors of the Bitcoin community, though there exists no evidence that he stole the missing bitcoins from MtGox, or that he is in control of the mysterious 180,000BTC.


The transactions have been pinpointed to Germany, but given whoever did this almost certainly used proxies and VPN (Virtual Private Networks), this is likely of little significance.

German IP

The timing of this record-breaking transaction is raising questions, however, and points towards the wallet owner trying to fly beneath the radar. The media cycle is overwhelmingly focused on Dorian Nakamoto, Newsweek, and the reporter who broke the story, Leah McGrath Goodman. There would be few more opportune times to attempt this move.

At this point there are few answers. More than a hundred million dollars-worth of Bitcoin is on the move, and seemingly being methodically distributed in an attempt to avoid detection. Whether the wallet-holder is the hacker behind the fall of MtGox, its disgraced CEO trying to launder dirty money, or even Satoshi Nakamoto himself stepping out from the shadows, no-one knows.

The last few months for Bitcoin have been a rollercoaster, and it’s clear the ride is far from over.

Photo by BTC Keychain/Flickr

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