Coinreport Weekly: Regulators on Bitcoin, Mtgox Down and Satoshi Back?

Bitcoin Weekly: March 7th, 2014

Here at CoinReport we like to breakdown the week’s bitcoin news and headlines for our readers. This week, ending March 7th 2014 has continued to be eventful for bitcoin.

We saw the monumental collapse of MtGox last week, with the loss of over 744k bitcoins, causing an uproar. A lot of people got “Goxed” leading to protests in Japan and cries from the general media for the regulation of bitcoin.

Regulatory positions, subpoenas and lawsuits

Japan was formally called upon to declare their official position on bitcoin, while US Senator Manchin called for bitcoin to be banned altogether. It seems all is not lost however, as Congressman Jared Polis mirrored this letter calling for dollar bills to be banned. His letter highlighted the anonymous nature of the dollar bill and it’s use in criminal activities, traits bitcoin critics generally pounce on the blacken the name of bitcoin. More lawsuits directed towards MtGox were announced, including a class action by over 400 individuals and US attorney, Preet Bahara, went on to subpoena MtGox and other big bitcoin businesses for their records on how the cyber attack of February 7th was handled internally. The move was not considered unwarranted for those wanting answers. This attack, though quickly resolved by the other leading exchanges ultimately resulted in Empty Gox closing it’s doors permanently.

Yet more bad news for MtGox

But the bad press surrounding MtGox didn’t end there. Following the news that they had filed for bankruptcy, MtGox released yet another official statement, blaming the loss of approximately 850k bitcoins (744k of those belonging to customers), on a software bug. CEO Mark Karpeles claimed the software bug allowed for an increase in incomplete bitcoin transfers which could be exploited by hackers to withdraw bitcoins.

Illegal access through the abuse of a bug in the bitcoin system resulted in an increase in incomplete bitcoin transfer transactions and we discovered that there was a possibility that bitcoins had been illicitly moved through the abuse of this bug.

Whether this actually happened or not still needs to be determined by experts.

Additionally a new malware virus attack is reportedly circulating the internet. Scammers and hackers the world over are making the most of the coverage MtGox has been receiving, by targeting those who lost bitcoins and are eager to get them back.

Bitcoin keeps forging ahead

It wasn’t all bad press for bitcoin however, the bulls of bitcoin came out in support and the big businesses united in a joint statement of support for bitcoin, condemning MtGox, for its “tragic violation of trust”. Enthusiasts the world over rejoiced that the diseased limb that was MtGox had finally been removed, allowing the bitcoin industry to flourish once again.

The bitcoin obituaries of the general media were proven wildly inaccurate and instead we saw the bitcoin price almost immediately rebound, more new ATMs, in Texas and Singapore and businesses pop up globally. Two such businesses included the first physical bitcoin shop in Hong Kong the United Kingdom. There can be no doubt, for those within the bitcoin community watching bitcoin evolve in real time it is still growing from strength to strength.

More positive news for bitcoin came from the United Kingdom, where the decision was made to scrap the 20% VAT (value added tax) on Bitoin trading. Alas, on the other side of the world Japan made the opposite decision and is now looking for ways to tax bitcoin transactions.

Will the real Satoshi please stand up!

Finally, the question in the back of all our minds, “Who is Satoshi Nakamoto” was answered, kind of. Or actually, maybe not. Leah Goodman, of Newsweek, made the claim that she had discovered the true identity of Satoshi Nakamoto, hiding in plain site . She claimed that Dorian Prentice Satoshi Nakamoto was the man responsible for writing the white paper the bitcoin protocol.

For the past 40 years, Satoshi Nakamoto has not used his birth name in his daily life. At the age of 23, after graduating from California State Polytechnic University, he changed his name to Dorian Prentice Satoshi Nakamoto.

Dorian Nakamoto has since publicly and most vehemently denied he anything to do with bitcoin. He also addressed the article written by Goodman, firmly clarifying any misleading quotes mentioned in her article.

I got nothing to do with it. It sounded like I was involved before with Bitcoin and looked like I’m not involved now. That’s not what I meant. I want to clarify that.

Then, in another twist the real Satoshi Nakamoto himself appeared to finally break his 5 year silence. From the same P2P foundation account that the original white paper was release from came the message:

I am not Dorian Nakamoto.

Speculation is rife as to whether or not this was Satoshi speaking, whether his account was hacked or even whether Dorian still is Satoshi and released this to take the heat off himself. At this stage there are still too many questions and not enough answers.

Stick with Coinreport.net for more updates on this story and additional news within the bitcoin universe.

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