Mt. Gox

Mt. Gox63 posts

Mt. Gox was one of the first Bitcoin exchanges, a place where customers could convert their local currencies into the virtual currency. The site was located in Japan and run by Mark Karpeles, a young French programmer. As Bitcoin increased in value the site experienced technical difficulties, hacking and public relations crises, culminating in the exchanges’ bankruptcy in February 2014, and the loss of hundreds of millions of dollars of users’ funds.

28 Feb, 2013
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Partnership with Coinlab

coinlabMt. Gox announces CoinLab as their exclusive partner in the United States and Canada. As of March 29, all US and Canadian customers currently transacting with Mt.Gox will transact through CoinLab, Inc. Mt.Gox will continue to provide back-end exchange clearing services, and transition over handling of customer accounts, deposits, withdrawals, and other functions to CoinLab’s US-based team.

CEO of CoinLab, Peter Vessenes: This move will bring local product delivery, liquidity and customer service to a huge group of Bitcoin fanatics. We’re excited by, and awed at the responsibility we have caring for our over 100,000 new customers and over a half-billion dollars in annualized trade volume.

Karpeles: This should be a huge win for everyone — faster deposit and withdrawal times, easier-to-reach customer service, and better access for United States financial markets, market makers and liquidity providers.

2012
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Sued for unfinished work

Files Suit

Karpeles is sued by a customer who claims he had paid 15,000 euros ($20,700) for a website to be developed that was never built. The Tokyo District Court rules in May 2013 that Karpeles has to return the money.

19 Jun, 2011
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Database hacked; 500,000 coins missing or stolen. Exchange closes.

A hacker transfers 25,000 Bitcoins are  transferred from 478 accounts on the currency’s largest exchange — Mt. Gox.  Mt. Gox admits to a major breach and shuts down.

Karpeles: One account with a lot of coins was compromised and whoever stole it (using a HK based IP to login) first sold all the coins in there, to buy those again just after, and then tried to withdraw the coins. The $1000/day withdraw limit was active for this account and the hacker could only get out with $1000 worth of coins. Apart from this no account was compromised, and nothing was lost. Due to the large impact this had on the Bitcoin market, we will rollback every trade which happened since the big sale, and ensure this account is secure before opening access again.

Within an hour of the hack, 100,000 Bitcoins were sold at incredibly cheap rates on Mt. Gox, plunging the market from around $17.50 USD per Bitcoin to just $0.01 per Bitcoin.  Meanwhile 400,000 other Bitcoins are reported missing (approx $8.75M USD at the time). Around the same time a hacker posted the following comment:

I have hacked into mtgox database. Got a huge number of logins password combos.
Mtgox has fixed the problem now. Too late, cause I’ve already got the data. Will sell the database for the right price

Mar 2011
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Karpeles buys Mt. Gox

Acquisition

Mt-Gox-LogoKarpeles buys Mt. Gox from an unemployed software hacker named Jed McCaleb.  Before the site started trading in Bitcoins, it was an online marketplace where people could buy and sell cards for the Magic: The Gathering trading card game. Mt. Gox  is short for “Magic: The Gathering Online Exchange” McCaleb, nervous about regulatory scrutiny on bitcoin, wanted rid of the exchange and sold it to Karpeles in for no upfront fee, people with knowledge of the deal said. Karpeles told others he had later paid McCaleb a small fee, calling it “a very good deal”.

Jun 2009
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Karpeles moves to Japan

Moves Country

Karpeles arrives in his Japan with his cat Tiban and some hard drives. Karpeles first visited Japan for a month in 2007, and posted a blog entry in Japanese saying he was a ‘geek’.

Karpeles Blog: I do computer-related work (a programmer); my goal is world domination.

Jan 2009
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Arrested on return to France

Arrest

Karpeles is arrested by BEFTI (Brigade Investigation of Fraud in Information Technology) after allegations that he stole his employers’ data.  He describes the BEFTI officers as “barbaric”, commenting that the arrest was “like no other”. After 13 hours in jail and a search of the servers, Palm Pilot, and other home computers, he was released after making a statement.

15 Jul, 2007
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Visits Japan, learns Japanese

Karpeles visits Japan for a month, during which time he claims to learn Japanese fluently:

Many of you knew, some didn’t know, I went to Japan from July 15th to August 15th. During one full month, I had to speak Japanese, and live in the Japanese way. I could stay in a guest house in Omiya, Saitama, and also spent one week in Osaka (during which I could go to Kyoto). Thanks to that, I gained a few levels in Japanese Mastering, allowing me to speak Japanese (almost) fluently, speak with Japanese women which resulted in strange results, such as me, being a geekmaster, having a Japanese girlfriend.

Oct 2005
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Moves to Israel

Moves Country

Karlpeles  moves to Israel, hoping to get closer to his Catholic faith while working for internet company Fotovista.  In a blog post he argues that Hebrew is as important to Christians as it is to religious Jews.  He only worked at this job for a few months before he once again began to feel depressed and “empty” according to one blog. In addition to his work at Fotovista he works on his own site, Ookoo.org. However, due to power outages and service disruptions he loses most of his customers and returns to France.

Mar 2005
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Visits Japan

Karpeles visits Japan for the first time:

Having always dreamed of going to Japan, I gladly accepted.  What follows is a race [with customs] to obtain a passport in less than 3 days, prepare a departure to Japan, fund my plane. Finally, I’m flying to Japan. Over there everything [is going great], I took a few thousand photos , and a whole lot of adventure, full of discovery and extremely exciting things

Oct 2003
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Joins Linux Cyberjoueurs

Hired by Linux Cyberjoueurs, Owned by Stephane Portha, the company develops Flash games and Graal online, an MMO RPG. Through the following year Portha complains that Karpeles is spending too much time on internet chats instead of coding.

Mr. Karpeles,

I find myself obliged to notify you of a reprimand for your misconduct.

You have been notified on numerous occasions that the use of the [workplace’s] Internet and your computer are reserved for your professional work, but that occasional private use is tolerated provided that it does not impede the good conduct of the affairs of the company. (See your contract of employment)

In the office Friday, March 12, 2004 I observed that you not only did not do your [coding] work, but that you were [instead] using Internet chat software.

Also, I found it particularly troubling that you would lie [to me] when i asked you about what you were working on and that you [did not stop] your use of this software to chat after several requests for explanation [of your behavior].

If this happens again, we will be compelled to take serious disciplinary action, rather than a simple reprimand.

Please accept my sentiments on this matter, sir.

Signed,
Stephane Portha

1993
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Convicted of computer fraud

Arrest
Note: Exact year is unknown.

According to Reuters, blog posts Karpeles wrote in 2006 say he was arrested twice in France before he was 21 for computer fraud-related charges. One resulted in a 3-month suspended sentence. French authorities in Tokyo said they have seen confirmation of one prior conviction, but do not have details.

Indeed, during my misspent youth, I made a huge, huge mistake. Enough silliness that I found myself locked into custody and brought temporarily placed in the “mousetrap” (souricière: possibly “n.f. (pol.): ‘Baited trap’ laid by the forces of law-and-order.”). This was followed by an investigation of more than a year, which eventually ended in a trial.

I will not give too much detail about what I did wrong, just say it concerns payment systems on the Internet. I spent two years taking risks becoming larger, perhaps because it was an exciting side … whatever, I ended up getting arrested (in rather bizarre circumstances, noting that when I was arrested, I was just in a police station to file a complaint for something else).

Karpeles then notes he had to undergo psychiatric review, and that it was the psychiatrist who gave him an interest in Japan.

Then I had the right to visits to a shrink. And it turned out, after much discussion, this psych was also interested in Japan (except that a psychologist there earns a rather good living, and they can go regularly) … And I had a agreement with the therapist. The agreement was rather simple. I had to do historical research in the history of Japan and write a report. Obviously it was not so complicated for me, but I could still see and more interesting things about some of the history of Japan.

In the end he stated in his report (which I have a copy) that I was not responsible for my actions, and that the abuse of cannabis was bad for my mental health. I was rather shocked (I never, oh, ever smoked substances “illegal”, I swear on it), then after thinking a lot, I finally concluded that it was can not be so bad as that. In the end, the trial was not concluded too bad for me (3 months suspended sentence disappearing after 5 years, and nothing in the criminal record).

1 Jun, 1985
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Mark Karpeles born in France

Birth

Mark Marie Robert Karpelès is born in Chenove, in the Burgundy region of France. His mother is Anne Karpelès, a geologist turned realtor.

He writes his first computer program aged 10, the same year he is sent to Collège Prieuré de Binson, a Catholic boarding school two hours north of Dijon.

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