> As explained by Mt. Gox, this was due to a hacker breaking into the exchange and stealing a large amount of funds. The drop to $0.01 was caused by the hacker selling a bunch of those coins on the exchange, eating through all the orders on the book.
Wait, you don't need to do anything to MtGox's coins to sell BTC on MtGox if you've hacked them - their coins, as far as the exchange goes, are just records in a MySQL table. So for MtGox's explanation to be true, the hacker would have needed just wallet-access on MtGox, then turned around and sent MtGox's coins right back to MtGox, hoping to cash out via MtGox before MG noticed and undid the orders?
Yeah, their explanation didn't make a lot of sense. Mt. Gox was notoriously opaque, and what little they did say publicly was often flawed in ways similar to what you describe.
That said, it's not impossible that, say, a rather young hacker got into Mt. Gox, and naively sold stolen coins during the incident. Most people are not familiar with how exchanges work, and so they may not have known that a large sell order would evaporate the order book. It's important to remember that most people who are adapt at technology do not necessarily have financial acumen as well. It's a tangential skill set.
But yeah, we can speculate in all sorts of ways. Maybe the 2011 hack was fake; a way for Karpeles to pilfer the coffers. Again, hopefully something more concrete will come out of the trials.
Wait, you don't need to do anything to MtGox's coins to sell BTC on MtGox if you've hacked them - their coins, as far as the exchange goes, are just records in a MySQL table. So for MtGox's explanation to be true, the hacker would have needed just wallet-access on MtGox, then turned around and sent MtGox's coins right back to MtGox, hoping to cash out via MtGox before MG noticed and undid the orders?