The curious case of the missing Mt. Gox bitcoin fortune

While the world paid attention to the James Comey hearing, an interesting fact was unearthed: the missing Mt. Gox bitcoins may have been located. Only those in the know won't say where they are.

Did you lose a bunch of bitcoin from Mt. Gox? The “destination” of the digital currency from bitcoin’s most infamous theft is “definitely” known — but the finders won’t say where those coins are currently located.

Mt. Gox, the largest bitcoin exchange at the time of its headline-grabbing demise, declared bankruptcy after the theft or disappearance of 850,000 bitcoins valued at $450 million in February 2014, along with $27 million in cash. Although 200,000 were eventually found, the location of the remaining 650,000 remained unknown and the subject of much speculation over the last three years.

It turns out that Chainalysis, the investigator for Mt. Gox’s creditors, “definitely” knows where the coins are sitting right now, according to congressional testimony by the firm’s co-founder. Due to the surge in the cryptocurrency’s value since Mt. Gox went down, the 650,000 missing bitcoins are currently worth nearly $2 billion. The legal battles over the missing coins temporarily landed the CEO of Mt. Gox, Mark Karpeles, in a Japanese jail in 2015.




The revelation emerged nearly two hours into a June 8 hearing by the House Financial Services Subcommittee on Terrorism and Illicit Finance on the national security implications of virtual currency. Occurring at the same time in which former FBI Director James Comey was testifying in front of the Senate Intelligence Committee, the comments went largely unnoticed.

Witnesses included a former FBI agent who had been tasked with high profile cybercrime cases, as well as representatives from two firms — Elliptic and Chainalysis — that run investigations related to cryptocurrency.

The news was uncovered after Rep. Warren Davidson, R-Ohio, asked the witnesses why the missing bitcoins couldn’t be traced if the transactions are tied to the blockchain. The blockchain is the distributed public ledger that tracks all bitcoin transactions.


“I was particularly struck by your opening remarks that we can detect the activity,” Davidson said. “It seems that if we have this ability, which it seems we theoretically should, then we would be able to find the missing Mt. Gox coins. Why can’t we?”

“We actually did find those,” Jonathan Levin, a Chainalysis co-founder said. “Chainalysis was the official investigator in the Mt. Gox bankruptcy case and the destination of those coins is definitely known.”

Davidson didn’t ask for more information and Levin did not clarify when and how were the coins found, where they currently are, who has them and what it means for the ongoing Mt. Gox court cases. It’s not clear if substantial answers are known at all.

Chainalysis has not responded to multiple requests for comment.

Jerry Brito, the executive director of Coin Center who also testified, echoed those unanswered questions.


“Just because you know where they are may not mean you can get them back,” he said in a phone call with CyberScoop. “You know the ultimate landing place on the blockchain. Maybe the police do know who has it. We don’t know.”

“Due to ongoing law enforcement operations, I am unable to comment on this issue,” Karpeles, Mt. Gox’s CEO, wrote in an email. “I do not know where you saw this comment from Jonathan Levin however please know that publication of such information may compromise any future potential arrest(s).”

Levin’s comments came in a public hearing.

Karpeles added that “many popular rumors about MtGox about the stolen Bitcoins not actually existing or being stolen by me are absolutely false” and, as previously claimed, the bitcoins “were stolen through hacking.”

Chainalysis and Elliptic are the two largest virtual currency intelligence firms. They sell their software to governments, cryptocurrency exchanges and traditional banks. In 2016, Chainalysis raised $1.6 million in funding and signed a deal with Europol for collaboration and information sharing to aid the law enforcement agency’s growing scope and number of cybercrime investigations.


American law enforcement agencies including the FBI, DEA and DHS all have deals with Chainalysis as well, adding up to several hundred thousand dollars in revenue for Chainalysis from the United States government in the past several years.

Kim Nilsson, a security researcher at WizSec who has investigated the Mt. Gox case for over three years, guessed that Levin and Davidson may not have been on the same page. If Levin was simply saying companies know the transactions in which the Mt. Gox coins were stolen, other investigators have had much of that information since 2015.

Levin has not responded to requests for clarification.

“I suspect the questioner rather meant ‘Why can’t we see where the coins are now and recover them?’, and here the answer is a lot less clear,” Nilsson wrote to CyberScoop in an email. “The coins were moved through exchanges and likely sold, and so there is no “pile” of stolen MtGox coins sitting around anywhere today. In that sense, his answer is somewhat misleading (unless they know something we don’t).”

However, Levin’s choice of words — specifically when he said “the destination of those coins is definitely known” — suggests definitive findings about the coins’ ultimate landing place.


“That there’s no intact pile of recoverable coins doesn’t mean the case is cold, mind you,” Nilsson told CyberScoop. “Multiple investigations are still active and have a pretty decent grasp of the when, how and who of the thefts. His answer is presumably referring to being aware of this trail, which has been independently found and corroborated by multiple investigators.”

When Mt. Gox collapsed in 2014, it rocked the cryptocurrency world. At the time, bitcoin’s value plummeted and headlines questioned the technology’s future. The landscape is vastly different today.

“Bitcoin has definitely outgrown the Mt. Gox saga,” Brito said. “The reason it was such a big deal is because Mt. Gox was essentially the only and definitely the largest exchange in the world. Today you have many bitcoin exchanges that are based in the United States, that are well funded and that are regulated completely, unlike Mt. Gox, which was one guy. These exchanges have much more volume than Mt Gox ever had.”

The market cap for bitcoin as of this article’s publication sits at more $46 billion, compared to around $7 million on the day Mt. Gox collapsed.

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