Introduction And The Mt. Gox Trial:

Around the time of this article, if you typed in Mark Karpelès into the search engine monopoly giant Google (there are other options out there), you’d likely run across a full front page of Mr. Karpelès’ court trial in regards to the infamous Mt. Gox. One of the first things you’re likely to learn about the man is that he was the CEO of the early Japanese Bitcoin exchange, which fell victim to multiple, large scale, Bitcoin thefts. Karpelès is a self proclaimed ‘IT generalist’ on his Twitter account, and lives in the bustling city of Tokyo, Japan.

His Twitter account is very active, with a variety of tweets and retweets, including this one from July 31st, 2017:

Note that #btce announce FBI seized servers w/ database and wallets means servers were likely in the US. FBI usually acts within the borders

His official blog is also active with Bitcoin news, and information covering the still ongoing Mt. Gox investigations. He also has a link for “Ask Me Anything” for those who may want to ask him a question.

For those not in the know, who may be wondering what all this talk of court trials and Japanese Bitcoin exchanges is all about. Well, back in 2014, Mt. Gox declared bankruptcy, after the theft or disappearance of 850,000 bitcoins valued at $450 million dollars, according to an article by cyberscoop, as well as $27 million dollars in cash. Some of the coins had been found, while others remained a mystery for around three years.  It was the largest Bitcoin exchange in the world at the time, but poorly regulated, back when Bitcoin’s market cap was only around $7 million (as opposed to today with a market cap of around $76,378,369,883, and several well regulated exchanges). Japan was actually the first country to regulate Bitcoin as a legal payment option in response to the incident, according to an article by CoinDesk.

Karpelès, with the online alias of MagicalTux, was the CEO of Mt. Gox. On the 1st of  August, 2015, he was arrested by the Japanese police on the suspicion that he may have accessed the exchange’s computer system, falsifying data concerning it’s outstanding balance. He was later allegedly charged with embezzlement, and re-arrested. In July 2016, he was released on bail, but was required to stay in Japan.

The investigations are still ongoing, and others have since been put into the spotlight.

The cyberscoop article above gives the following information & quotes from Karpelès:

Karpeles added that “many popular rumors about MtGox about the stolen Bitcoins not actually existing or being stolen by me are absolutely false” and, as previously claimed, the bitcoins “were stolen through hacking.”

Karpelès has pleaded not guilty to embezzlement and data manipulation in a recent trial (July 11th, 2017) at the Tokyo District Court, where he was indicted of redirecting $3 million of customer’s funds into his own account, late in 2013, as well as supposedly fabricating his own account balance within the exchange. According to the article above by CoinDesk, the vehicle which was suspected of fraudulent trading activity during 2013 (during a rapid rise in prices globally), was the “Willy bot”. A tweet from Kolin Burges, a Mt Gox creditor, president at the trial, and a software developer based in London said:

Karpeles admits operating Willy bot…but says it was for good of company so not illegal.

Karpelès maintains the position that the lost bitcoins were stolen by hackers, which certainly wouldn’t be the last time a bitcoin exchange has fallen victim to cyber attacks. In fact, the company initially claimed a bug in the software was responsible for allowing hackers to grab the Bitcoins. However, according to an article by TheJapanTimes, he claimed later after the incident  that he found 200,000 of the lost coins in a “cold wallet” – which is strange to say the least, because this is a digital storage device, like a thumb drive or memory stick… not connected to computers.

Is Mt. Gox’s CEO capable of such massive fraud? According to the article by TheJapanTimes above, he had reportedly spent money lavishly (including on prostitutes), and lived in an $11,000 per month penthouse (but with the quality of much of the “news” today, this would need to be looked into further). However, as mothers often do, his mom came to his defense on a couple of different occasions. In the same article, she is reported as having said, back around 2015, that her son was a “genius”, learning computer languages at the age of three, and that he started making simple programs by the age of five. In an article by CoinDesk, his mother said that he lacks people skills but was never dishonest. She continues to note that he was a genius child growing up, but a terrible student, and often let people take advantage of him.  According to TheJapanTimes, in a 2006 blog post by Karpelès, he said that computer crime was “totally contrary to my ethical principles.” However, their article continues to say that four years later, he was sentenced to a year in prison by a Paris court for hacking.

It would seem we’ll have to wait to see if the courts rule in favor of or against Karpelès. TheJapanTimes (who has an entire page of news stories featuring him here) revealed that his lawyer Kiichi Iino said that Karpelès was keeping calm as the trail was getting underway.

Whether he’s innocent or guilty, let’s move on with some of the other aspects of his life.

Childhood & Education:

Mark Marie Robert Karpelès was born in Chenôve, France, on the 1st of June, 1985, making him currently 32 years of age. Apparently born into a fatherless home, to his mother Anne-Robert Karpelès, and raised in Dijon. He went to the Collège Prieuré de Binson in Châtillon-sur-Marne, which is near Dormans, between 1995 and 2000. He finished his education in 2003 at Lycée Louis Armand in Paris, but not before spending a year at Lycée Claude Bernard, also in Paris.

Professional Life:

According to TheJapanTimes, Karpelès first came to Japan to work for a web development company close to 2009, only later getting involved with the Bitcoin exchange.

Karpeles has also worked jobs in, and began startups centered around technology and software. You can read more about that here.

Conclusion:

At the moment, no one knows what the fate of Mark Karpeles will be. And, it would appear to be difficult to choose what to believe on his innocence or guilt concerning Mt. Gox. Keep up to date with hearings, and let us know what you think below in the comments.

Thanks for reading this week’s article,
Have a wonderful weekend,
The DinarDirham team.

*More Links To Check:
News Stories On Mark Karpeles Curated By CryptoCoinsNews

A Look Into Mt Gox

In depth article by RollingStone on Karpeles’ hard and troubled childhood and young adult life – warning: inappropriate advertisements.


Resources:

https://twitter.com/MagicalTux?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Eauthor
http://blog.magicaltux.net/
https://www.cyberscoop.com/bitcoin-mt-gox-chainalysis-elliptic/
https://coinmarketcap.com/
https://en.wikipedia.org/wiki/Mark_Karpel%C3%A8s
https://www.coindesk.com/mt-gox-ceo-mark-karpeles-pleads-not-guilty-embezzlement/
https://www.japantimes.co.jp/news/2017/07/10/national/crime-legal/mt-gox-ceo-mark-karpeles-braces-bitcoin-trial-japan/#.WaeeXnYjHIU
https://www.coindesk.com/mother-mark-karpeles-lacks-people-skills-never-dishonest/
https://www.japantimes.co.jp/tag/mark-karpeles/