Let me remind everyone that Karpeles is an established liar and a convicted computer fraudster, and will obviously say or do anything at this point to clear his own name.
Again, what ultimately convinced me of Karpeles' character is that he paid his IRC support staff to lie to users. The support staff didn't realize they were being paid to lie, but they were certainly lies. They were being paid to tell users, "Yes, all of your coins are safe and secure" while Karpeles was drafting his Mt. Gox crisis report: http://www.scribd.com/doc/209050732/MtGox-Situation-Crisis-S...
Once Mt. Gox was hacked in the aftermath, a log of their trading activity was leaked. In that log, there's evidence of an Mt. Gox trading bot that had been operating for a long time, buying up bitcoins in order to inflate the price.
At this point, I don't think Mt. Gox or Karpeles deserves any further attention, except as a warning that even the largest Bitcoin exchange can fail, which is why you must store your bitcoins in your own secure wallet, not any third party service.
I understand the anger coming from those who lost sizeable amounts of coins due to MtGox's mistakes, but with an undergoing police investigation, wouldn't the rational attitude here be to wait for the fog of war to clear up and the investigation results to be announced?
Karpeles does not have a serious history of fraud. We don't know yet what happened with MtGox. Wait and see.
What gave you that idea? There's no police investigation ongoing in Japan, or anywhere else for that matter. Karpeles is looking at Japanese bankruptcy proceedings, he is not facing criminal charges. He was invited to testify in Texas in light of probable criminal wrongdoing, but he turned down the offer. The only major "investigation" of Karpeles is happening on Reddit and HN.
The police investigation is mentioned twice in the interview, i.e. "The police are investigating the case so I won’t be able to say much."
There are various new articles about the Tokyo Metropolitan Police and Mt.gox "working together", but it sounds like you are right that the police are not investigating Karpeles.
No one has heard anything about a police investigation into embezzlement or fraudulent behavior. Karpeles alludes to the police investigating "physical attacks". Surprise surprise, another excuse.
Governments should reserve judgement until a conviction has been secured, but I do not believe that it is reasonable to demand that private individuals do the same. A presumption of innocence is about limiting the circumstances in which governments can restrict the rights of somebody, but it makes little sense outside of courtrooms.
Consider: Richard Nixon was never convicted. Does that mean I can't/shouldn't call him a criminal piece of shit?
What I'm saying is, we don't have hard evidence pro or against Karpeles, what we have is a lot of speculation, typically made by angry people who lost part of their savings (or all of it in the case of Mr. Sillysaurus) in the MtGox collapse. That is not sufficient material to start a mob lynch.
The current investigation will hopefully surface whether the debacle was the result of genuine mistakes on the part of MtGox, or the result of wrongdoings. I'm personally reserving my judgment until we have more trustable information.
> we don't have hard evidence pro or against Karpeles
There is a lot of hard evidence:
1. 800k+ bitcoin that are gone
2. Public statements by Karpeles that all was ok on numerous occasions
3. Frozen withdrawals for months that hinted at liquidity problems that were denied (which is a crime)
4. A leaked crisis strategy draft, later admitted by Karpeles as a legit internal document, that showed MtGox knew at least a month before d-day that they were in trouble and trading insolvent.
5. The malleability bug excuse used as a cover to liquidity problems
6. Timeline of withdrawal problem suggests earlier knowledge and inaction
What is in doubt is the extent of the coverup, who else was involved and if Karpeles really was behind a plan to ease the liquidity burden by settling his goxbux debt by hyperinflating his remaining bitcoin holding value, and "printing" bitcoin by buying on the market in exchange for GOX USD - which could then be smuggled to another (legit) exchange in return for real USD that could be used to pay back the deflated goxbux.
I lost all of $0 and 0 BTC in the MtGox fiasco, but this has no bearing on the ethics of Karpeles, and it's quite absurd that there is no ongoing criminal investigation. It's appauling. It's an outrage!
Founders, how do you deal with your support teams when you've understood you'd be going bankrupt?
I'm sure there are plenty of honest people who would do the right thing; but I guess there are other founders who remain stubbornly optimistic until they're way beyond the failure point. At least because entrepreneurship requires a serious optimism disorder ;)
The willy report was quickly debunked as being FUD.
Those bots were just the dark pool bots that larger players paid Mt Gox to buy large amounts of Bitcoin on a drip feed system over time so as not to spook the markets.
I don't remember any 'debunking'. What I remember was some half-assed speculation that maybe possibly it could be that the Willy bot was a dark pool (even though it's not clear this explained all the anomalies with that account).
The 'debunking' was an alternate theory that didn't hold up to real scrutiny.
If the idea was a 'dark pool' to obfuscate their trades, not signal the market, spike the price, or avoid front running - then they failed spectacularly on every account.
the bots made up a large proportion of total value, they traded in a predictable pattern and were spotted quickly within days (and then taken advantage of by other traders), had unlimited buy demand which continued through a 2x+ increase in the btc price - defeating the purpose of spreading the order out.
it also doesn't explain why the bots trades continued while the API was down.
and finally, connecting to a dark pool should still show normal trading patterns, which the bot patterns were completely unlike (hence them being spotted).
The sort of bot he's describing would be designed to mask large purchases and prevent them from sucking all liquidity out of the market temporarily or spiking prices.
Let's say I want to buy 500 BTC at $1000 (to make the math easy). I wire Mt Gox half a million bucks, and try to buy up 500 BTC all at once. This moves the market massively because that's a sizable chunk of existing sell orders. To prevent this, I could instead buy a few BTC a minute for the next couple of hours and I wouldn't drastically shock prices or be as notable. Prices would still move upwards (because more demand in the network) but they wouldn't spike. Or Mt Gox could keep a floating reserve, I could pay a free to lock in the price and move the money around internally to Mt Gox, and they replenish that reserve a few BTC at a time (taking on price risk if their reserve is depleted when prices are high, but making profits if they wait to refill that reserve until prices are in a trough).
Note that I have no evidence this is the case, I'm just trying to explain what he claimed was the cause.
Source for the debunking? As far as I know nothing official has been released regarding these allegations and most likely nothing will be confirmed until after the Japanese bankruptcy proceedings.
Thank you for your critique, but Newslines is not a blogspam site. Our writers create news summaries about any topic that are compiled into sortable timelines. The objective is to give real understanding of how topics and people develop over time, as in the example of Mt Gox, where our timeline of events is the definitive record of news about the exchange. If you can find a site that does the same then please let me know as I am genuinely interested.
I understand the site's goals and I'm not saying it's a bad concept. The reason I called it blogspam is because none of it seems to be original content and citations seem to be optional (example[1]). If every post was a link to the primary source with a summary attached it would be much better. As it stands right now it's WordPress with SEO targeted content taken from other sites, the definition of blogspam.
Hi, All our posts should be sourced to the original. I must have missed adding the source to that post. It's there now. Thanks you for pointing that out.
"Q: Why didn’t you hire experienced professionals?
A: We tried, but we didn’t have money and also often they turned us down. A former Financial Services Agency bureaucrat approached us once last year, but he declined our offer at the end."
I'm pretty sure what happened here is a professional was interested in helping out, got a look at the books and ran.
I regretfully can't tell you the context, but suffice it to say the following was once said in Tokyo: "I do not want to be one of the 100 closest gaijin to that office when shit goes down." (The Japanese immigration agency is occasionally - oh wait they still have my renewal form at the office? - zealous in their execution of their statutory duty to remove undesirable foreigners from Japan.)
You don't need to look at the books for that. Imagine you got that offer. Millions going through the accounts that you have to protect, secure in online and offline environment, monitor, ideally have complete control over access logs, think about relevant company certifications that may be required because you deal with money one way or another. And you need to have some practical banking knowledge on top of that. If anything goes as bad as it did, it could be your name in that article instead of the company owner.
With no inside knowledge of the books, how many people would you think need to be on the security side of that company and how much would you request to get paid? I'd definitely go with (10+)x amount a very well paid person gets in other companies.
There have been a few people in /r/asknetsec recently saying they are in charge of a bank's security and needing help with very basic things. I hope for their sakes they move on before everything hits the fan.
For me the underlying question is still: was he initially just incredibly incompetent, or always a scam using incompetence as a cover?
Even in the case of just pure incompetence, there was a failure of ethics/law in how problems were handled, but if it was just incompetence fundamentally, bringing in a good partner early on might have saved it.
At the limit, I'm not sure those two are distinguishable.
There was a story a while back about a law firm that discovered its escrow account was empty, even though it should have had millions in it. Turns out a legal secretary had gotten caught up in a Nigerian scam. She started out sending a small amount of her own money. They'd tell her they just needed a little more and then she'd get it all back plus a lot more. As she got deeper in trouble, at some point she started "borrowing" from her employer. Incompetence led to pressure that created ethical failure.
My guess (as uninformed as anybody's) is that Karpeles started out merely incompetent and with underdeveloped ethics. As he got in deeper, he just focused on trying to stay out of trouble in the short term. That led to massive snowballing of problems. His very modest helpings of competence and ethical backbone were quickly overrun, demoted in priority to the same level as getting enough niacin in his diet. The best liars I know aren't people who know that they're lying; they're people who focus on saying what you want to hear while ignoring entirely what the truth might be.
For those effected, the two are not distinguishable. If the bank robs you or loses your money, it is still a loss. When it comes to the law, neither is "I don't know" perhaps gives some lenience at sentencing.
When your business involves holding money on deposit for people, you have a very high moral and legal standard to follow. Unfortunately the very legal leverage and fractional reserve lending by financial institutions makes that line very blurry. A single technical misstep and you are now an insolvent ponzi scheme. Being lazy or "over your head" in this area is like laying down in front of a moving truck.
US laws relating to money laundering and finance are very strict, accidents and lapses still lead to convictions. I don't know anything about Japanese law. I'll take a page from the BNP Paribas case and say that because Mt Gox used US dollars it falls under US jurisdiction and must also follow US law, not just Japan's.
There's a critical difference in this case. If the lost bitcoins are now in the possession of some random hackers then Karpeles is incompetent. If they are in fact effectively in the possession of Karpeles then he is a competent thief. It's hard to tell but in the future they may catch him cashing some coins in to buy a yacht or pay the rent or some such at which point it would be distinguishable in a meaningful way. Being in Japan I guess he'd get away with it but in the US they'd be tapping his phones and so on.
Seems likely, any references that support your theory? Many people on /r/bitcoin and such places seemed to think that he outright stole it, but could be pure speculation (I didn't follow the story, don't take my word for it).
This is because embezzlement is rampant in the Bitcoin space, e.g.: Inputs.io, TradeFortress, MyBitcoin, Silk Road 2.0, GBL, I could go on. Embezzlement, as in you get "hacked", oops, we lost everyone's money, everyone move along, nothing to see here.
Anyone who thinks Mark Karpeles isn't guilty of embezzlement at a minimum - MINIMUM - just isn't viewing the situation in light of the massive amounts of operator fraud that have historically taken place, not to mention copious amounts of evidence suggesting Mark Karpeles' talking points have been entirely fabricated from the beginning. Remember, he stole over a _billion_ dollars: 850,000 * 1200. He only relinquished control of 200,000 of those 850,000 after being called out on it by the community. At this point the legal system is the least of Karpeles' worries.
Why would he want to be a laughingstock digital billionaire under police scrutiny in bankruptcy court when he's already a successful business owner with tens of millions? It really doesn't make sense that he up and decided to steal them. If he did it he'll die having spent less of his stolen fortune than he would have spent of his legitimate fortune.
Seems a lot more likely he's an idiot who got in over his head.
Sorry, but your line of thinking takes for granted that criminality doesn't pay. On the contrary. Having a hidden fortune is more valuable than having a pubilc fortune, objectively in that you pay less taxes and forego frivilous lawsuits and subjectively in that you can walk around less paranoid of kidnappings. Second of all, there's no way to stop Karpeles from mixing his coins. People who don't have much experience using Bitcoin are often operating in the PayPal model, where it takes a trusted third party to spend your money and even if not, the other person is known. In the Bitcoin space, there is no trusted third party, and if your coins are mixed and you and the other person are behind Tor, there's effectively no identifiable information involved in the transaction.
Embezzling Bitcoins is the perfect crime. As has been mentioned already, Karpeles has a history of computer fraud, so embezzling digital money would be right up his alley. He had the means, motive and opportunity to do so. When you consider the rampant embezzlement in a historical context ... it's pretty much case closed. Your argument boils down to "this time it's different". Also, laughing stock digital billionaire? Sorry but there's no such thing as a laughing stock billionaire. I'd take a billion knowing it would make me the "laughing stock" of the world, and so would anyone with a brain.
If the community hadn't called Karpeles out on using transaction malleability as a fictional excuse for losing 850,000 BTC, and we had all believed Karpeles, he would in all likelihood be looking at Japanese bankruptcy court followed by a lifetime of traveling the world with a hidden fortune rivaling Satoshi's.
What is he going to do with a billion that he couldn't already do with $10m? He can't go from bankrupt to owning a $100m mansion or yacht or business without anyone noticing and investigating.
> I'd take a billion knowing it would make me the "laughing stock" of the world, and so would anyone with a brain.
Not if I had $10m. Marginal utility of those last $990m is easily less than the hit to my reputation and the cost of constantly fearing for my freedom and physical safety. Especially when I can't buy anything large and obvious with them.
There isn't an active police investigation, not in Japan at least. In Japan, there are bankruptcy proceedings scheduled, and absolutely no police investigation into embezzlement that anyone knows of.
A court requested Karpeles appear in Texas to face possible charges for criminal wrongdoing, but again, this was only after he had been called out by the wider Bitcoin community for fabricating excuses. FYI: Karpeles turned down the offer.
Fact is embezzling Bitcoin has unquestionably _been_ the perfect crime for everyone who has attempted it. Karpeles made copious amounts of errors on his way to embezzling coins, and there's still people out there like yourself that would allow him to get away with it. Imagine if he had been anonymous. Imagine if he hadn't used the transaction malleability excuse. Imagine if the MtGox private database hadn't been leaked. Imagine if there were no investigative reporters in the wider Bitcoin community! Again, if that were the case, which thankfully it has not been the case, Karpeles would be looking at simple Japanese bankruptcy proceedings followed by a lifetime of world travel with a hidden fortune rivaling Satoshi's.
> A: The police are investigating the case so I won’t be able to say much. But if asked, I’m willing to show any bitcoin entrepreneurs how I did it wrong, so they won’t repeat the same mistake.
Is this part of the interview a lie then? I'm seriously asking, I don't know and you seem to have some information as to this aspect. It seems like a silly thing to lie about in an interview though.
there's still people out there like yourself that would allow him to get away with it
I'm not sure what you are talking about, but you seem to be projecting some argument on to me that I haven't made. I was simply calling out a bit of hyperbole.
Imagine if the MtGox private database hadn't been leaked. Imagine if there were no investigative reporters in the wider Bitcoin community! Again, if that were the case, which thankfully it has not been the case...
Exactly, there's quite a bit of scrutiny and investigation at this point. Hardly what I would call the perfect crime.
Also, aren't these bitcoins traceable to wherever they are eventually used? Is it really that good of a crime when a) you'll forever face public scrutiny (to varying degrees) by people with a vested interest in recovering the money, b) may have an investigation as to your conduct, and c) your stolen money is forever traceable?
That part of the interview alludes to Karpeles claiming he was "physically attacked" causing hundreds of millions of dollars in losses no doubt.
I only meant to imply that many have read this WSJ interview without any historical context.
At this point, there may be scrutiny, but just a few months ago, people all over the place were claiming the US government must've seized MtGox's funds. If you look at @magicaltux's twitter feed, he even tried to fan flames on that government conspiracy theory in the same tweet where he began fabricating the excuse of being "physically attacked".
To anyone who hasn't been following the MtGox fiasco since mid-2013, which is when MtGox first started having "liquidity issues", it may very well seem like Karpeles has been charged with fraud. No, that isn't the case. Karpeles has been screaming "Transaction malleability" (BS), "US government stole it" (BS), and now "Physical attacker stole it". The Bitcoin community actually went along with each of Karpeles excuses, but public opinion has just recently began to spell out FRAUD, loudly and repeatedly. There is still no criminal investigation of Karpeles for fraud, just a lot of loud people screaming it on the Internet, because it is obvious and because it has happened so many times before in the Bitcoin space.
The truth is, Bitcoins aren't traceable if you know what you're doing over Tor. Anonymous spending is very much possible. Running a Bitcoin exchange with a proprietary database and large shared wallet with thousands upon thousands of BTC in it, is actually the perfect vehicle for coin mixing and I would be shocked if Karpeles didn't mix in personal BTC withdrawals over his years of running MtGox. It's really simple, transfer BTC into an exchange account with fake or no identifiable info attached to the account, wait a bit, and withdraw fresh coins. With judicious use of Tor, you have fresh new coins, and the original coins are tumbled around a gigantic shared wallet. There's just no practical way of linking BTC addresses to your identity if you know what you're doing.
The Bitcoin community actually went along with each of Karpeles excuses
I haven't been following the bitcoin community reaction, but from what I remember reading here, most people seemed VERY critical of his explanations of what happened.
The truth is, Bitcoins aren't traceable if you know what you're doing over Tor
Do you mind explaining this a bit? My understanding is that there's a trail of all transactions (transfers, I guess) of a bitcoin, so there's some tracking of the history of the funds. If it's a matter of mixing small amounts into larger shared wallets, it seems like what's needed (if it doesn't already exist) is a curated list of known bad bitcoins. If there was a public service to check whether the source bitcoin is blacklisted (or what percentage it's blacklisted, if mixed into a larger wallet), then sites accepting bitcoin trasnfers could make decisions on whether to accept it or not. This obviously would only work if a) people were willing to accept this list as bad, b) doing the legwork of tracking the history of a coin back isn't too computationally expensive, c) it was adopted soon, before the coins got too mixed in and how "bad" they are is diluted. It's then in your best interest to reject bad coins because it taints your wallet.
But maybe I've got a few assumptions in there that are completely bunk. I'm mostly an outsider to this.
In any case, the fact that bitcoin has a trail built in seems like it offers numerous ways to reduce the attractiveness of stealing them by making them harder to convert into goods and currency.
No logical person would give up $3-5M+ per month in growing legit income for $400M+ in dirty money with a risk of lifetime of jail. Not when they controlled 60%+ of all btc trades at the time and the VC/private equity rush at the time would have easily cashed him out legitimately for a value higher than the total value of deposits.
The whole entire point of money laundering is to get to the legit income, it would be unheard of to go the other way especially when you own 100% of the company, are high profile and your future spending will be extremely scrutinized.
Simplest explanation is best: Karpeles was incompetent and distracted, didn't trust others, wrote horrible code nowhere near suitable for a bitcoin exchange and when he noticed a year later that he had been robbed attempted to cover it up.
A generous estimate would put accumulating 850,000 BTC in profits through exchange fees at 85,000,000 BTC in volume. That assumes a 1% fee on all trades, which is already unsustainable in the current exchange market. It also assumes 0 operating expenses, but hey we're being generous in this calculation.
To do 85,000,000 in BTC on MtGox would mean averaging over 230,000 BTC of daily trading volume for 365 days. For context, most Bitcoin exchanges these days are doing 20% of that on a record day. So if we're super duper generous in our calculations, we'd assume it would take Karpeles 5 years to accumulate the amount he stole in a legal way. This further assumes two equally incredibly unlikely things:
1. MtGox stays ahead of the competition
2. MtGox maintains a 1% trading fee
Remember that in April of 2013, which is when MtGox had its second huge trading engine crash, there was already significant demand amongst traders to move away from MtGox, which is precisely how MtGox started rapidly losing marketshare.
The TLDR is, Karpeles wouldn't have made nearly as much money by engaging in legal business. He would've found it much more tempting to close MtGox before having to deal with burdensome regulations coming out of America, a trend which started in 2013. And even if he had tried to deal with regulators, MtGox most likely wouldn't have been able to maintain its number 1 position for much longer.
So the fact of the matter is he was looking at spending the next 10-20 years pursuing a business he wasn't prepared to run, or he could've just taken the money and walked away, declaring bankruptcy.
> Simplest explanation is best: Karpeles was incompetent and distracted, didn't trust others, wrote horrible code nowhere near suitable for a bitcoin exchange and when he noticed a year later that he had been robbed attempted to cover it up.
I find it absolutely, positively _unbelievable_ that 850,000 BTC were stolen out of a hot wallet. If it had been due to terrible coding practices, he would've gone to that as his first alibi rather than claiming 850,000 BTC were lost due to"transaction malleability". If the code was the likely culprit, he could and would have proved it.
While you're right that embezzlement is rampant, it's possible the embezzlement was by an employee rather than Karpelès himself. It doesn't sound like they had very strict change control policies.
A private key is 256 bits, right? A determined insider given the chance to visually see the key once per day could probably take the whole thing out in his brain in a few weeks.
The theory I've heard along those lines is that he lost the Bitcoins years ago due to incompetence and was trying to make back the losses so that he wouldn't have to own up to it. You can imagine how that strategy might have spiraled out of control as the price of Bitcoins increased.
It's mostly speculation. But nearly everything we know at this point is speculation, other than that Karpeles has a history of both technical and ethical shortcomings, which basically means that anything is possible.
Without any specific evidence, the null hypothesis ought be "did small mistakes that kept on compounding on themselves." It's quite normal human behavior.
If there were an oracle that could answer, I'd comfortably bet even odds that he started out with some rather small mistake, and then thought "well, I just need to keep things afloat a while to cover for it, and then we will all be good." Oh, I'll borrow a little money from my spouse. Oh, I'll just take some money from my neighbor without him knowing, but I'll get it back and return it to him later.
Lots of gambling addicts flame out this way, and my gut tells me that the Bitcoin community has more than its fair share of gambling-addictive personalities.
This comes up a lot in the skeptic community: we know X is not actually psychic/finding ghosts/healing people, but are they an outright, knowing fraud, or do they believe it themselves?
Any decent amount of incompetence is likely to be viewed as a 'scam' by others. When you invert trust, in any portion of the business, you get what is generally viewed as 'privacy'. Bitcoin is essentially trusted privacy. Connect that notion of 'trusted privacy' to a business/controlling entity dealing with people's money, and you get fear. A 'scam' or fraud is defined as wrongful or criminal deception intended to result in financial or personal gain. Good reasons to fear.
A violation of trust when dealing with people's money is a perfect way to describe what happened at Mt. Gox, but it doesn't necessarily mean it was scam. That is only possible because Bitcoin.
my assessment based on the statements of others that knew him better was that he got bored with MtGox very quickly and was distracted with side projects, such as the bitcoin foundation, bitcoin ATM's and the bitcoin cafe he was building downstairs from MtGox (apparent sunk cost of $2M+).
the tech guy that Roger Ver bought in when Gox was at crisis point talked about how despite the state of emergency Karpeles would leave the office mid-work-day to go and pick some silly color scheme for the new bitcoin cafe.
This is days/hours before Gox was going under.
The other part was inability to delegate and lack of trust in the code that wasn't his own. Despite his lack of interest in Gox, he still was the central (and choke point) in all site updates (which he merged manually, no source control) which explained the lack of development.
In getting MtGox into trouble I don't think he was intentionally fraudulent, just a bad case of dev project ADD. In terms of the lying and cover up, he definitely was - but seems like the type of person who doesn't realize how serious that is.
In terms of culpability, the DOJ indictment with his name on it (which i'm 95% certain exists) won't distinguish between incompetence/ignorance and willful fraud.
I think there's definitely some sort of reality distortion field in Mark's head - that or the interview's been heavily edited.
Thankfully I never had any money in MtGox, but comments like "I learned a lot, but I lost a lot" and "I always worried about ‘What if all the bitcoins were gone?’" really make me think he never did and still doesn't understand that he was responsible for half a billion dollars of other people's money.
I just don't comprehend his attitude. He's posting pictures of kittens on twitter. It's just... odd.
Did anyone look at the site for that other company he was talking about?
On its about page, it says:
"""
Tibanne Co. Ltd. is a Tokyo, Japan-based corporation founded in 2009 by Mark Karpeles, a young technopreneur with more than 15 years experience in software development, network administration and business development. Mark is well-versed in multiple programming languages, has a strong background in network security, and is well-known in the tech community.
Tibanne specializes in web hosting, application development and system management. We are currently engaged in the research and development of new and existing services to produce innovative solutions for our clients.
Our team is comprised of talented Japanese and international staff hailing from many countries, disciplines and specializations.
"""
What the fuck? What is wrong with this guy... I gotta admire his shameless self-promotion. I'd be hiding under a rock if I were him, not banking on my ruined reputation for my other company.
What's wrong with a? In another two and a half years I'll have 15 years of programming experience and still be well below the average age on this site.
> We tried, but we didn’t have money and also often they turned us down. A former Financial Services Agency bureaucrat approached us once last year, but he declined our offer at the end.
This is disturbing. For an organisation that promoted itself as a focal point for Bitcoin trading, claiming to be the largest, what does this mean for the other exchanges and services out there? Are they all running on just hopes and dreams?
Overall this article is quite light and it would have been nice to see more questions asked. It seemed rather softball. Like where were the questions about his falsifying of his employment history? How did he go from running a gaming service (not Magic, but Ragnarok Online) to running a currency exchange?
These questions should be asked and they should be asked in a hardball sort of fashion.
It's possible he just didn't want to pay the guy enough, but . . . yeah. A brick-and-mortar bank hires a lot of appsec folks to review their code, for lots of money, and they at least have the legal system to fall back on. That's after they pay market rates for labor to write the code in the first place.
If I was in charge of MtGox security I would probably get an ulcer. One mistake and it's over, forever.
I'm not sure I follow you. The money that they lost (scare quotes or not) was not theirs, it was their users'. It's not like they could use it to hire someone.
To lose someone else's money means you actually lost it.
To 'lose' someone else's money means you lost it into your own account.
The previous poster was suggesting that the money hadn't been necessarily been lost to thieves but that Karpelès, himself, had stolen at least a good portion of it and then used some of it for bribes.
I would love to hear Karpeles explain or deny the "Willy" bot theory, because for me it's still a bit of mystery whether it was an attack or a built-in attempt to dig his company out of a hole.
I still can't wrap my head around how someone decides to do a startup around bitcoin and doesn't make security their first priority from the beginning.
Well there was a complication during his birth that caused extended oxygen deprivation, and he'll never be quite right his entire life. Then people gave him millions worth of their savings. That's what went wrong.
I actually happen to think doing interviews with him, struggling to explain the unexplainable is quite pointless. It's cruel entertainment. It's like asking a baby why are those pants pooped.
Oh come on, I have one post that's been substantially negatively modded and the little nerd detectives are coming out of their basements to shower me with their investigation insights.
Yes, Sherlock, I have a few accounts, but I do it because the site is so coded that it's easier to make new accounts than to remember my passwords. So sue me.
Why aren't you creating throwaway accounts. Are you here for the achievement badges? Building a legacy? To leave your children one day or something.
I happen to think points are earned so they can be wasted from time to time. It keeps life in balance.
The purpose of me posting is so I can say what I want to say, I don't care about the scores. Most often they're positive, from time to time they're negative. So be it.
And if I wanted to create throwaway accounts, I wouldn't do so with the same name and easily identifiable suffix, so you can then nag me about it, genius.
Those previous accounts all have a positive score, by the way. But since for the first time ever, I was coerced into a rant, I guess this one's a first. I've never went off topic on NewsHackers. You made me do it, so congratulations.
http://newslines.org/mt-gox/joins-linux-cyberjoueurs/
http://newslines.org/mt-gox/convicted-of-computer-fraud/
Again, what ultimately convinced me of Karpeles' character is that he paid his IRC support staff to lie to users. The support staff didn't realize they were being paid to lie, but they were certainly lies. They were being paid to tell users, "Yes, all of your coins are safe and secure" while Karpeles was drafting his Mt. Gox crisis report: http://www.scribd.com/doc/209050732/MtGox-Situation-Crisis-S...
Once Mt. Gox was hacked in the aftermath, a log of their trading activity was leaked. In that log, there's evidence of an Mt. Gox trading bot that had been operating for a long time, buying up bitcoins in order to inflate the price.
http://willyreport.wordpress.com/2014/05/25/the-willy-report...
https://news.ycombinator.com/item?id=7796748
At this point, I don't think Mt. Gox or Karpeles deserves any further attention, except as a warning that even the largest Bitcoin exchange can fail, which is why you must store your bitcoins in your own secure wallet, not any third party service.
EDIT: Also, Mt. Gox lost at most 386 bitcoins to malleability: https://news.ycombinator.com/item?id=7482451