A group of hackers investigating the collapse of Mt Gox, the Tokyo-based bitcoin exchange, has lent weight to the idea that it was an inside job, publishing a report detailing the activities of an automated bot that appeared to game the fragile system by buying hundreds of thousands of coins with fake money.
The report by WizSec, a five-man security consulting firm, provides the clearest account yet of what could have happened at Mt Gox, which went bust almost a year ago saying it had lost track of 850,000 coins then worth almost $500m.
According to the report, the bot, known as "Willy", assigned itself dozens of accounts with apparently faked US dollar balances, allowing it to buy and withdraw the virtual currency at will.
The fact that the bot operated in Asian hours is one of several clues suggesting that the creator could have worked at Mt Gox, said Kim Nilsson, chief engineer at WizSec. At its peak, the holding company run by Mt Gox chief Mark Karpelès employed some 30 people, some of them on short-term contracts.
"We think it is more plausible that it was an insider rather than an external hacker," said Mr Nilsson.
The shuttering of the exchange — once the world's most popular venue for trading and storing bitcoins — left thousands of creditors in limbo, and provided a stern test of faith in the infrastructure supporting the alternative currency movement. In the weeks following the collapse, during which Mr Karpelès claimed to have recovered 200,000 of the 850,000 missing coins in an old format wallet, the price of bitcoin dropped about 40 per cent.
Mr Karpelès has said he was unaware that any coins were missing until late in February, weeks after users began to report difficulties withdrawing funds.
In an emailed comment, Mr Karpelès said that the activity patterns uncovered by the WizSec report — indicating regular gaps in trading between 2am and 5am, Japan time — could "show the way to new theories", such as two people operating the bot on shifts, or living in different time zones.
Since the collapse a succession of other, smaller bitcoin-related businesses have hit trouble, with problems ranging from Gox-like hacks to physical raids on bitcoin ATMs. On Thursday bitcoin was trading at $237, about 80 per cent off its peak of November 2013.
