Posted in: ExclusiveArchive
April 24, 2014 3:57 PM UTC

Missing Gox Coins Flowing into Maidsafe IPO? Update: Templar77 Comments

Author: Gordon Hall

[dropcap size=small]M[/dropcap]any have proclaimed Mt. Gox dead, myself among them, yet the ghost of Gox has seemingly returned to haunt the already-troubled MaidSafe IPO.
Editor’s Note: David Irvine, of MaidSafe, has responded to the situation:

David Irvine:
Whoever sent this shouldn’t have sent funds from Bitstamp anyway since they don’t control the keys.
I hope this is the case. I know we have refunded a bunch of people who did that. That allows them to try again if they wish anyway. I have seen this kind of story a lot and it is always followed by a reason to regulate pitch. Not that I think cry wolf but bitcointalk is full of way out there accusations at times, which is a shame. It is a great resource if used properly.
I am sure this will all unfold as time moves on. The bitcoin devs would be pouncing I think if it were likely as that would be damaging to us all.

MaidSafe is planning on working with Bitcoin devs to sort this out.  At the very least, what we have here is a bonafide money laundering attempt.

Missing Gox Coins Entering MaidSafe

A few hours prior to press-time, Templar77 of the BitcoinTalk forum conducted a blockchain investigation. He claims that it proves 5 000 BTC flowed from a wallet publically linked to Mt. Gox into the address assigned to the MaidSafe IPO:

Image mashup showing MaidSafe IPO “KHf” address.

The originating “Gox” wallet still holds a further 886 458 BTC.
As the MaidSafe IPO wallet currently holds a total of 6 908 BTC, this potentially means that the missing Goxcoins have funded over 70% of MaidSafe’s vaunted $5 million USD IPO ($3.3 mil from Bitcoin, the rest presumably from Mastercoin sales).
BitcoinTalk screenshot showing templar77’s post.

The Alleged Crime

The presumed offense here is that Karpeles – or the hacker who stole the Mt. Gox coins – is using the MaidSafe IPO as a means to launder their ill-gotten gains. Once Goxcoins magically become SafeCoins, who would be able to trace them?
A degree of plausible deniability exists in the fact the Gox funds have flowed through a number of address before hitting MaidSafe’s IPO address. Indeed, as noted in the comments section by dannoferrin, there is no absolute proof as to the coins’ origin despite approving their “Stolen coins from mtgox” tag…

Address Tags as Evidence

Clarification: reserves the right to allow any address within their database to be linked to an address tag. The tag in question links to the following website – belonging to the person who submitted the tag. The name seems to be a lolcat-style reaction to Mt. Gox’s fiduciary record.
Templar77, speaking to me from Mexico over IRC, informs me that the Drt address was tagged shortly after 2bitidiot’s leak of Mt. Gox documents.

The Clue

Templar77 claims (apart from being a fkng genius) to have discovered the account movement due to 30 minute time intervals suggestive of programmed behaviour. He reasons that a sophisticated operate is deliberately attempting to disguise their trail by obfuscation. Karpeles is known for using bots, including “Willy,” who was seemingly assigned Karpele’s insider trading duties as Gox was de-synchronising from consensus prices.
Templar77 goes on to state that his curiosity was first peaked when he noticed an un-escrowed investment of 900 BTC (roughly $44k USD) into the MaidSafe IPO. He traced these funds as stemming from the administrator of BTC Guild, a prominent Bitcoin mining pool which at one time approached majority hash power.
Correction: This address is in fact used by the BTC Guild pool. To quote a communication received from Michael Marsee / Eleuthria:

The address he traced to is BTC Guild’s mining pool wallet. This is easily verified by looking at BTC Guild’s blocks. Every block mined there is mined to that address.
As such, around 25% of all coins in the last year can be traced back to that address, and it goes even further back than that. I have tried to get to correct this tag for a long time and they have still never corrected it.

Investigating further, Templar77 then discovered 149 BTC from an address he traced back to the tagged Gox wallet. The following image records that transaction:

Templar77’s clue, an account he traced back to Gox sending 149 BTC to the MaidSafe IPO.

The Trail

Here is the transaction identity (TX ID) trail Templar77 followed to trace that back to the tagged Gox address. In his words:

<Templar77> and you reach this address:

Templar77 describes the full sequence of events as follows, with numbers linking to his related posts on BitcoinTalk:

1) This was my first post there.
I posted it cause I saw this.
My first theory was that it was a big bitcoin holder scamming,  making it look like there were many investors.
Then my second post: 2) – I found some coins where coming from the same place but it looked like they [the sender] tried to hide the fact they were coming from the same place.
Then here I found the 900 btc transaction: 3)
Then here I found the Mtgox wallet but didn’t know yet what it was: 4)
Here’s when I found out that it was the Mt. Gox labelled address:  5)

What is MaidSafe?

Maidsafe is a project to produce a decentralised internet which appears technically promising. However, as reported two days ago, the IPO has been tainted by the questionable handling of Mastercoin pre-orders for MaidSafe’s Safecoin operating tokens. Currently, participants may purchase what are essentially vouchers which will be redeemed when the final MSAFE coin yet to be issued.
Quoting Wikipedia’s description of MaidSafe:

MaidSafe is an open-source program that enables a decentralized internet platform, called the SAFE Network. MaidSafe autonomously handles static and dynamic data including communications. Data stored on the network is either encrypted or cryptographically signed by MaidSafe connected applications (clients). In either case the network itself cannot decrypt any of the data. MaidSafe also distributes all data on the network without the need for centralized servers.
The idea was originally conceived by David Irvine who leads a small team building the base layer services. The system source code is open source and hosted on GitHub.

The MaidSafe IPO

Essentially, what went wrong is that David Irvine, the man behind MaidSafe, authorised the sale of the redeemable SafeCoin vouchers for Mastercoin, as well as Bitcoin. This led to a rush of investors / speculators purchasing Mastercoin with which to purchase Safecoin vouchers. Naturally this ran up the price of Mastercoin. Then, as Mastercoin sales exceeded Irvine’s expectations and threatened to buy up the share portion reserved for later Bitcoin buyers, Irvine halted Mastercoin sales. This led to a Wiley Coyote for new Mastercoin bagholders, and a price collapse soon followed which certainly pinched a few wallets and evoked disgruntlement and conspiratorial mutterings among the affected parties.

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