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Suddenly $120 million of Bitcoins is un-lost

Aaron Pressman

Bankrupt virtual currency dealer Mt.Gox finally had some good news for customers who have seen some 750,000 bitcoins lost from their accounts. Turns out some 200,000 of the missing crypto assets were hanging out on a lost hard drive somewhere.

As I discuss in the above video with Breakout host Jeff Macke, the discovery wasn’t so accidental. Tokyo-based Mt.Gox and its founder, Mark Karpeles, are under legal pressure from customers who have sued to get their bitcoins back. The 200,000 found coins, worth about $120 million at today’s prices, allegedly were spotted online by some of those customers in bitcoin logs recently after Mt.Gox said they had supposedly been lost.

Related: What's up with bitcoin?

"On March 7, 2014, MtGox Co., Ltd. confirmed that an old format wallet which was used prior to June 2011 held a balance of approximately 200,000 BTC,” the company said in a short statement on Friday.

Bitcoins exist only in the digital realm, as ones and zeros encoded on a hard drive or other storage device. Lose the drive, lose the currency. Mt.Gox held customer assets on drives that weren’t supposed to be connected to the Internet, or any network for that matter, theoretically keeping them safe from hackers and thieves.

Somehow the “cold storage” was penetrated, Karpleses has said without providing much of an explanation.

Related: Bitcoin regulations from around the world

But the seeming instability and insecurity highlighted by the demise of Mt.Gox doesn’t mark the end of virtual currencies. Mt.Gox, which started as an online trading forum for the nerd card game Magic: The Gathering, was a top player in the Wild West phase of Bitcoin.

Now, the real capitalists are taking over. Heavy hitter venture capitalists like Marc Andreessen have funded upstarts that deal in bitcoin while abiding by U.S. banking and money laundering laws. 

It’s more like the end of the beginning. Andreessen and his ilk hope there’s another long and profitable phase to come. 

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