Hedge Funds

The Bitcoin Bugle: Not Mt. Gox Gets Some Real Money

Someone is profiting handsomely from Mt. Gox’s difficulties, and it’s a hedge fund manager. Indeed, it’s the hedge fund manager to whom Mike Novogratz entrusts his bitcoin betting.

Pantera Capital Management LP, the hedge fund that manages money for Fortress Investment Group LLC executives, invested about $10 million in Bitstamp Ltd. months before the startup emerged as the world’s dominant dollar-Bitcoin exchange, according to three people briefed on the deal.

The infusion late last year ranks among the largest single investments in a Bitcoin venture and is part of a broad Pantera strategy to build a brand in the Bitcoin world, the people said. London-based Bitstamp’s share of dollar-Bitcoin trades multiplied from mid-February to as much as 50 percent after the collapse of Mt. Gox, once the world’s top Bitcoin exchange, according to data from Coinometrics, a Bitcoin research firm…

The investment, led by Pantera founder Dan Morehead, followed an invite-only getaway at Lake Tahoe last year for leading Bitcoin entrepreneurs including the head of Bitstamp, Nejc Kodric…

Pantera disclosed in a December regulatory filing that it had formed a $147 million fund called Pantera Bitcoin Advisors. In an e-mail to Bloomberg News days later, Michael Novogratz, a principal and director at Fortress, called Morehead “our man when it comes to Bitcoin.”

The question of who we can thank for all of this remains open, according to the man who Newsweek says we can thank.

It’s still possible, very marginally, that Newsweek is correct in fingering Dorian S. Nakamoto as the mysterious inventor of bitcoin. But it’s hard to imagine a more thorough and detailed denial than the one the 64-year-old Temple City man issued late Sunday through a Los Angeles lawyer.

The unemployed computer engineer, whose full name is Dorian Satoshi Nakamoto, says he’s not the “Satoshi Nakamoto” who wrote the seminal paper outlining a complex form of electronic cash several years ago….

Dorian Nakamoto says in his statement that he has never “worked on cryptography, peer-to-peer systems, or alternative currencies.” He says he hasn’t been employed steadily for 10 years but has been forced to find work as a laborer, poll taker and substitute teacher while battling severe health problems and living in a working-class neighborhood with his 93-year-old mother. The real Satoshi Nakamoto is thought to own a hoard of bitcoins worth as much as hundreds of millions of dollars.

Fortress-Linked Pantera Said to Invest in Top Bitcoin Exchange [Bloomberg]
Dorian Nakamoto’s denial blows up Newsweek’s bitcoin ‘scoop’ [L.A. Times]

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3 Responses to “The Bitcoin Bugle: Not Mt. Gox Gets Some Real Money”

  1. Shrivel says:


    Thank you for your continued coverage of Bitcoins. The Bitcoin Bugle is my favorite series ever in the realm of journalism.

    Your Penis,

    Hooked Left Shrivel Dick

  2. Filled Wtih Blood says:

    Dear Mr. Dick,

    You are completely right. I checked all the articles on Dealbreaker and in last 6 months there isn't one that covers anything but bitcoin. In fact, there is only one single article on the entire internet that is discussing something else. It's called "If you don't like this article close this shit up and read something about bitcoin".

    That's just terrible.


  3. Zac says:

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