Karpeles Archives -
Mark Karpeles, CEO of the now-defunct bitcoin exchange Mt. Gox, has been sentenced by the Tokyo District Court. The court convicted him of record tampering but found him not guilty of embezzlement. He received a suspended jail sentence of two and a half years.
Court Sentences Karpeles
The CEO of the now-defunct Mt. Gox exchange, Mark Karpeles, received a suspended jail sentence of two and a half years Friday after the Tokyo District Court found him guilty on charges of data manipulation, according to local media. Noting that the court suspended the sentence for four years, AFP-Jiji Press wrote:
The court convicted Mark Karpeles, a 33-year-old Frenchman, for falsifying computer data but acquitted him over charges of embezzling millions from client accounts.
Tokyo-based tech reporter for Bloomberg, Yuji Nakamura, translated the verdict in a series of tweets. “We’re calling it that he’s not actually going to prison,” he wrote. “In plain English: he’s guilty of record tampering, but not guilty of embezzlement. He is ‘suspended’ for 4 years, during which time if he does anything bad he’ll be jailed for 2.5 years.”
The 2014 collapse of Karpeles’ Mt. Gox exchange involved the loss of approximately 850,000 bitcoins, 200,000 of which were later found, although victims have yet to see any restitution. Despite the court-appointed bankruptcy trustee selling the recovered coins in preparation for disbursement, the recovery process has been put on hold due to a pending $ 16 billion lawsuit by a former business partner.
Court Found a Total Mess
According to the verdict which Nakamura translated, the Tokyo District Court found that the way Karpeles “ran Mt. Gox was a total mess and that he tampered w/ records to hide the fact it was missing a lot of bitcoin, but he did not do it for personal gain or have ill intent.” The court document also details:
We find the charge of electronic record tampering to be true and that it deserves punishment, but there’s no criminal evidence re embezzlement (dominant or reserve type) or violations of company laws, resulting in a not guilty ruling.
The court acknowledged that “the creation and use of tampered records involved a monetary amount that was extremely large, resulting in severe damage to the trust of the users,” Nakamura described. “There is no excuse for the defendant, who is an engineer with expert knowledge, to abuse his status and authority to perform clever criminal acts. We cannot look lightly upon the criminal responsibility of the defendant,” his translation reads.
After the news of the verdict broke, Karpeles has made only one tweet at the time of this writing. It was in response to Twitter user Emilien Dutang, founder of blockchainpartner.fr, reminding him of his earlier promise. On Feb. 11, Karpeles wrote:
I hereby pledge any net proceeds I receive from Mtgox back to Mtgox creditors. Not that I will [be] receiving anything anyway.
Dutang reminded him Friday, “I hope you’ll keep your words,” to which the former Mt. Gox CEO replied, “Will do.”
What do you think of Karpeles’ sentence? Let us know in the comments section below.
Images courtesy of Shutterstock, Channel News Asia, and Fortune.
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The post Mt Gox CEO Mark Karpeles Found Not Guilty of Embezzlement appeared first on Bitcoin News.
Mark Karpeles, the chief executive of the now defunct bitcoin exchange Mt. Gox, has been denied a motion to stay in a class action lawsuit in the U.S. The Northern District of Illinois lawsuit originally filed by Anthony Motto and Gregory Greene accuses Karpeles of criminal conversion and fraud.
Mark Karpeles Faces Legal Proceedings in the State of Illinois
The former executive of Mt. Gox Mark Karpeles is facing a very busy month as he is expecting to hear the verdict from his embezzlement trial in Japan on March 15. The verdict is not Karpeles’ only legal issue, however, as he’s also being sued for negligence, fraud, and criminal conversion in the state of Illinois. The class allegations against Karpeles involve two former Mt. Gox customers, Gregory Greene and Anthony Motto, who believe the former exchange operator is liable for their losses. The plaintiffs’ lawsuit says the bank that Mt. Gox used, Mizuho Bank, Ltd., continued to accept deposits even though customers were having withdrawal issues. Motto and Greene’s attorneys believe Karpeles continued to allow deposits and conduct business within the state of Illinois through the exchange’s parent company Tibanne.
Last August, Karpeles and his lawyer filed for a motion to dismiss the case in Illinois and explained that Illinois had no jurisdiction over him because he was a French native living in Tokyo. After the dismissal was denied by Judge Gary Feinerman, Karpeles’ legal team then filed for a motion to stay in order to suspend the case until the proceedings in Japan had finished. The filed motion of stay asserts that “likelihood that plaintiffs and others will obtain a full recovery in Mt. Gox’s Japanese legal proceedings is high.”
The motion of stay added:
In light of the status of the Japanese proceedings, this case should be stayed in order to conserve judicial resources and to preclude unnecessary legal expenses.
Motion of Stay Denied — Class Allegations Hearing Continues May 1st
Karpeles believes that the Japanese proceedings should take precedence against the class allegations based in Illinois. Following the motion of stay, judge Feinerman ruled in favor of the plaintiffs and denied Karpeles’ filing. Now the former exchange operator must deal with the hearing on May 1, but will meet his March 15 verdict first. Furthermore, the Mt. Gox trustee Nobuaki Kobayashi will also be making a decision shortly in regard to the claims filed for civil rehabilitation.
In the legal proceedings Karpeles faces in Illinois, the defense counsel detailed that the claim that Karpeles knew exactly what Mizuho Bank was doing was unwarranted. Further, the defense said the idea that Karpeles conducted business in the state of Illinois is an incorrect assumption. “The alleged wrongful conduct took place in Japan, not in Illinois,” the defense noted. Karpeles’ upcoming verdict in Japan is in a country with a 99 percent conviction rate, but even if he is not convicted, his legal troubles are far from over.
What do you think about Mark Karpeles being sued in Illinois and the class allegations against him? Let us know what you think about this subject in the comments section below.
Image credits: Shutterstock, Pixabay, Mizuho Bank logo, and Mt. Gox.
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The post Mark Karpeles Still Faces Class Allegations in the U.S. After Japan Verdict appeared first on Bitcoin News.
The infamous former CEO of the now defunct bitcoin exchange Mt Gox, Mark Karpeles, is trying to start over with a clean slate in life. Karpeles has revealed to the media that he’s started a new C-level position as the Chief Technology Officer (CTO) for a firm called London Trust Media. The technology company invests in virtual private network companies and cryptocurrencies.
The Notorious Mark Karpeles Lands a C-Level Position With a Firm That Dabbles in Cryptocurrency Investments and Runs the Largest VPN Service Worldwide
Mark Karpeles is starting a new job, and he will be working with a company that’s into technology like virtual private networks (VPN) and cryptocurrencies. Karpeles has accepted a CTO position at a firm called London Trust Media (LTM), a company that owns VPN providers such as Private Internet Access, but has also injected funds into digital currency investments such as Purse.io, Zcash, Blockexplorer, and more. The former Mt Gox founder will now work remotely for the Denver-based firm who oversees the world’s largest VPN company alongside its recent cryptocurrency investments.
It seems Karpeles also lives a paranoid life, where he switches apartments in Japan every few months in fear of his safety. Karpeles also is afraid to set his bag down when being interviewed by the press in Tokyo’s Shinjuku district. Karpeles is still on trial for embezzlement charges and in Japan, there is a 99 percent conviction rate. The case could still see an outcome where the former cryptocurrency exchange operator finds himself in prison.
“After I came out, I felt like in a kind of dream, like I didn’t feel things were real — Even today I’m not sure yet,” Karpeles explains this week in Tokyo.
A Second Chance in This Fight’s Critical Hour
Karpeles also believes the administrators behind the Russian bitcoin exchange BTC-e and the accused Alexander Vinnik were behind a string of attacks that hit Mt Gox back in 2011. Alexander Vinnik had been arrested in Greece for being a suspect in a massive money laundering law enforcement sting, and allegedly Vinnik and BTC-e had connections with the missing Mt Gox funds. “What he did, Mt Gox is a victim of this, which means that all creditors are victims of this, and I am too a victim of this,” explains Karpeles in his recent interview. However, Vinnik has denied allegations of being tied to BTC-e, and the Russian has not yet been charged with any connections to the Mt Gox investigation.
Karpeles’ new C-level position for a firm that dabbles in cryptocurrency investments also follows his recent statements on a Reddit Ask-Me-Anything (AMA) about not wanting to receive the possible billion-dollar bankruptcy settlement that he could inherit. Moreover, even though Karpeles accepted a job as the CTO at London Trust Media he recently explained he wants very little to do with the cryptocurrency industry.
“The only thing I’m touching related to cryptocurrency is how to solve this bankruptcy — Nothing more,” Karpeles states.
Bitcoin right now is, I believe, doomed.
The company London Trust Media is pleased to welcome the former Mt Gox CEO onboard as the firm’s new CTO. Andrew Lee, the co-founder, and chairman of London Trust Media explains he looks forward to helping Karpeles move forward. “I am more than willing to give a second chance to Mark in this fight’s critical hour,” Lee notes.
What do you think about Mark Karpeles working for London Trust Media and still being associated with the cryptocurrency industry? Let us know your thoughts on this story in the comments below.
Images via Pixabay, London Trust Media, AP, and Getty.
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The post Mt Gox CEO Mark Karpeles Lands New Job — CTO for Cryptocurrency Firm appeared first on Bitcoin News.
Mt. Gox Mark Karpeles’ release on bail has produced a new radio program examining the historic hack and heist, but is also raising questions about sister exchanges such as BTC-e and their role in laundering stolen bitcoin. If all that wasn’t enough, a Gox trustee decided to dump over 400 million USD in bitcoin core and bitcoin cash in an effort to make Gox creditors whole.
Mt. Gox Money Laundered Through Always Efficient LLP, Claims FBI
Mt. Gox’s Mark Karpeles, released on bail in Japan, recently told England’s state-run media BBC Radio 4 File on Four how hard reality hit him back in 2014: “It felt like… when you fall from a building and you see the ground getting closer, and you feel like you are about to die. Mt Gox went from interesting project to being, I would say, a daily nightmare of dealing with banks, governments, people I never knew existed.” At that time, something like 7 out of every 10 bitcoin transactions were handled by the exchange. “I am very sorry that when I was in charge things happened the way they did.”
Mr. Karpeles is charged with data manipulation and millions in embezzlement, though he describes the latter as perfectly legal loans (none of the charges have to do directly with stolen Gox bitcoin). When dust settled, 650,000 bitcoin vanished, billions in value gone. BBC Radio 4 claims to have found out which regional company was used in laundering that loot, Always Efficient LLP.
The US Federal Bureau of Investigation (FBI) claims London’s Always Efficient LLP was behind the infamous exchange, BTC-e. US authorities effectively shut down the Russian exchange’s site, charging an alleged principal, Alexander Vinnik, with multiple counts of international money laundering, including that derived from Gox. Mr. Vinnik was later arrested in Greece, and is awaiting extradition to the United States or Russia (for lesser charges). For its part, the exchange denies Mr. Vinnik’s involvement. Investigators are claiming nearly half of Gox’s stolen bitcoin were pushed through BTC-e.
In a statement to the BBC, Mr. Vinnick explained “BTC-e is just a web platform for buying and selling Bitcoin – not an exchange. As such it cannot be held responsible for the source of money used to buy Bitcoin, no more than a [currency exchange bureau] can be held responsible for exchanging a stolen $ 100 note into pounds sterling.” He also denied any connection to Always.
The BBC 4 episode, The Missing Bitcoin Billions, concludes on Sunday 11 March, 20:00 GMT, and includes infuriating details of Gox’s ongoings at the time. Mr. Glucksman, a former Gox employee, is quoted at length about Mr. Karpeles’ quirks, among them “an interesting passion for quiche. Quiche as in mushroom and onion quiche, or something … in the building that we moved to, Mark had also purchased space at the bottom of the building that was going to be the bitcoin cafe. And initially the concept was for that to be a showpiece for bitcoin where you’d come in, you’d buy your coffee with bitcoin. But then he actually hired a chef who was a specialist in making quiches. He invested quite a large amount of money in an oven that was specifically built to cook quiche. It’s quite a big distraction from the whole story of Mt Gox.”
Market-Shaking Whale Dump by Mt. Gox Trustee
“I made efforts to sell BTC and BCC at as high a price as possible in light of the market price of BTC and BCC at the timing of sale. I plan to consult with the court and determine further sale of BTC and BCC,” Nobuaki Kobayashi, a trustee in the Gox case charged with paying back losses, explaining why 400 million USD in bitcoin core and bitcoin cash suddenly dumped onto markets. It’s an effort to make Gox creditors whole, part of ongoing bankruptcy procedures which include nearly 2 billion USD worth of bitcoin core and bitcoin cash yet to be sold off.
The sale carried over the last few months, resulting in JPY 42,988,044,343 (slightly over 400 million USD), after having sold 35,841.00701 in BTC and 34,008.00701 in bitcoin cash. Some analysts have openly wondered if parts of market prices crashing by half, say back on 5 February, had to do with the trustee’s sale of 18,000 bitcoin that same day.
The bitcoin were sold over a three month period, beginning in December of last year. “The matters such as the possibility of carrying out a distribution and the timing and method thereof have not yet been determined,” Mr. Kobayashi detailed. Claims and claims against claims will probably push back justice in this case for even more years to come.
Do you think Gox creditors will see their money any time soon? Let us know in the comments below.
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The post Mt. Gox Soap Opera Continues: Karpeles Released on Bail, Shadow Companies, and Whale Dumps appeared first on Bitcoin News.
Mt Gox chief executive Mark Karpeles – whom some internet forum commenters have angrily criticized after the exchange blamed a flaw in Bitcoin software for a potentially serious security issue – has been in contact with Forbes with a response to the criticisms.
Forbes Real Time