We have already seen the arrest of Ross Ubricht, alleged-founder of Silk Road and Charlie Shrem, the co-founder of BitInstant. It is difficult to know what is true and not true about the charges against Ulbricht and Shrem, since we are for the most part only hearing the government's side. Further, many of the charges, wouldn't even exist as crimes in a libertarian society, that said, it is clear the federal government is going after these two men with ferocity.
That's bad enough for the Bitcoin community but, all indications are that it is unlikely to stop there. For whatever reason, Roger Ver (aka, Bitcoin Jesus), is hiding out in the Caribbean and said to a reporter:
I don’t think I am likely to be assassinated, but I worry about being sent to federal prison for some sort of made up charge for a crime where there is no victim.Reports are now emerging that Mt.Gox CEO Mark Karpeles may have taken some bitcoins for himself that he had reported stolen by hackers and that the balances involved were larger than Karpeles reported in bankruptcy statements. From Techcrunch:
Here is The Verge on what it may mean if the hackers are telling the truth:
Most disconcerting is a Bitcoin whistleblower,Two-Bit Idiot, who posted on Friday that key members of the Bitcoin Foundation were given special access to their funds at Mt Gox, and trading privileges, while everyone else at Mt Gox had their accounts frozen. TBI wrote:Tokyo-based Bitcoin exchange Mt. Gox lost $400 million worth of bitcoins in February. Its management said the amount was stolen after hackers exploited a transaction bug to divert the funds, but some of Mt. Gox's users are not so sure, suggesting instead that the exchange's owners pocketed the cash. Now, facing silence from those owners about the fate of the money and the methods by which 6 percent of all of the Bitcoin in the world could have been stolen, a group of hackers claims it has broken into the bankrupted Bitcoin exchange's network to get answers.Forbes reports that the group gained access to the personal blog and Reddit account of Mark Karpeles, Mt. Gox's CEO. The hackers used the platforms to post a message that claimed Karpeles still had access to some of the bitcoins that he'd reported stolen. In support of the claim, they uploaded a series of files that included a spreadsheet of more than a million trades, Karpeles' home addresses, and a screenshot purportedly confirming the hackers' access to the data.THE HACKERS CLAIM THAT MT. GOX STILL HAS ACCESS TO 951,116 BITCOINSAlso included as part of the 716MB file was a file that appears to show the exchange's balances in 18 currencies. The hackers point to this file — which reportedly shows a balance of 951,116 bitcoins — as evidence that Mt. Gox is misrepresenting the current situation. A note in the file from the hackers reportedly reads "That fat fuck has been lying!!"
There is evidence that Bitcoin Foundation board members may have had direct access to Mark Karpeles which allowed them to personally deposit and withdraw funds from Mt. Gox, despite persistent delays for other customers...By Monday, I expect that either [the two key Bitcoin Foudation members] resign gracefully from the board of the Bitcoin Foundation...Otherwise, by Monday at 3pm ET / 12pm PT, I will post my full expose of the unprofessionalism and negligence of the Bitcoin Foundation. ...I hope to eat my article, keep the documents that I have to myself (and likely prosecutors as I am likely to be subpoenaed)Over Sunday, TBI tried to put the genie back in the bottle:
I'm not going to bury the lead; I am not publishing the article tomorrow that I said I was going to on Friday.
In fact, I never intended to (not yet anyway), and I certainly never intended to loop in the main-stream media so that they could pile on to our fledgling community. I simply hoped that a deadline would pressure Jon and Peter to resign quickly (and appropriately).
While my accusations on Friday were 100% truthful, I now see that I have overplayed my hand. Rather than go all-in with a losing hand, I'm mucking my cards. I never anticipated this degree of backlash from within the community. As such, any further efforts to publicly push for resignations are not well-focused, and I plan to turn down the rhetoric.
On the other hand, I'll reiterate that while my hyperbolic tone was poor and regrettable, I continue to believe that the Bitcoin Foundation in its current incarnation is significantly damaged...
Bottom line, there is a lot going on around Bitcoin, some of it, from a libertarian perspective is no problem, some of it is edgy and some of it may be criminal in any society, libertarian or otherwise. But, no doubt, prosecutors will view things in a much harsher manner than I do. And sadly, worst case scenario, unless very extraordinary measures were taken by a Bitcoin user, any Bitcoin user,conducting any illegal activity, could be snared as the government follows up on the multitude of leads it now has. A small fry might not be worth going after, but that blockchain makes it very easy to track transactions. If the operators can be identified and tracked behind transactions to illegal dealings, then it will be very easy for the government to cast a very large net and nab many who thought they were operating anonymously.