Now might be the time to sue Mt. Gox.

Bitcoin Streetsign

Mt. Gox, the failed Bitcoin exchange, announced that it had found about 200,000 BTC in an old wallet that had not been used since June 2011. This information was revealed in a legal filing in Japan.

That is like finding $118 Million in your old wallet that got lost in the cushions of your sofa. With the newly discovered 200,000 BTC, they now have 202,000 BTC, so they are now missing only 650,000 BTC.

Unfortunately for those who lost their coins, they are not considered debtors of Mt. Gox. Anyone who hopes to recover some of those rediscovered Bitcoins needs to be boarding the lawsuit trains that will be leaving the station very soon.

Lance Cottrell is the Founder and Chief Scientist of Anonymizer. Follow me on Facebook and Google+.

The Privacy Blog Podcast - Ep. 17: RSA Conference Wrap-up, @N, Bitcoin Fiasco, Apple Security and More

Standard Profile Picture In episode 17 of The Privacy Blog Podcast for February, 2014 I talk about:

  • The just completed RSA Security conference
  • How an email can expose your location
  • A guy who suffered extortion because his username was so valuable.
  • What happened in the latest Bitcoin fiasco
  • Exactly how secure Apple’s iMessage protocol is
  • And finally how insurance companies may drive changes in cyber security

Mt. Gox bitcoin exchange appears to have failed, coins are missing.

Bitcoin Pile The Mt. Gox Bitcoin Exchange Has Disappeared — Is Bankruptcy Next? | Re/code

Here is another example of he problem with storing your cash in an untrustworthy entity. Many Bitcoin services are based on having some third party store your coins for you.This has now lead to major thefts or losses of coins on a number of occasions. There is no insurance or mechanism for restitution to the people who have lost their coins. Reports suggest that 740,000 Bitcoin have gone missing. The precipitous loss of value on exchanges has also cause a further hit to the value of everyone’s coins .

I strongly encourage Bitcoin users to follow one of the following strategies to protect themselves.

1) Only purchase Bitcoins immediately prior to use, and convert your coins back to a conventional currency in an insured bank account as quickly as possible after receiving them. This minimized your exposure to loss, theft, or market volatility.

2) Keep your Bitcoins securely stored in your own, ideally offline, wallet. Only allow third parties to have the minimum possible amount of coins for as short a time as possible.

Lance Cottrell is the Founder and Chief Scientist of Anonymizer. Follow me on Facebook and Google+.