Mark Karpelès

Mark Marie Robert Karpelès[1][2] (born June 1, 1985), also sometimes known by his online alias MagicalTux, is the former CEO of bitcoin exchange Mt. Gox.[3][4] He moved to Japan in 2009.[5][6]

Mark Karpelès
Born
Mark Marie Robert Karpelès

(1985-06-01) June 1, 1985
Chenôve, France
Other namesMagicalTux

Early life and education

Karpelès was born in 1985 in Chenôve, France, the child of Anne-Robert Karpelès, a geologist.[7] He was raised in Dijon.[7][8] Between 1995 and 2000 he was educated at Collège Prieuré de Binson in Châtillon-sur-Marne, near Dormans.[3] He then spent one year at Lycée Claude Bernard in Paris before completing his education in 2003 at Lycée Louis Armand in Paris.[3]

Career

According to Karpelès' LinkedIn page, he worked from 2003 to 2005 at Linux Cyberjoueurs as a software developer and network administrator.[9] Karpelès is a PHP developer.[9]

In 2009, Karpelès founded Tibanne Co. Ltd., a Japan-based bitcoin related technology provider. He is CEO.[10][11] He was a founding member of the Bitcoin Foundation, created in 2012 with a mission to standardize and promote bitcoin, and served on its board until February 2014.[12][13][14]

Karpelès acquired the Mt. Gox Bitcoin exchange site from programmer Jed McCaleb in 2011 which was later incorporated in Tokyo, with its original owner receiving 12% shares of the new company.[15][16][17] Mt. Gox filed for bankruptcy in Japan on February 28, 2014, and for Chapter 15, Title 11, United States Code bankruptcy in the United States (Texas) in March 2014.[1][18][19]

Karpelès was subpoenaed by the United States Department of the Treasury's Financial Crimes Enforcement Network to appear in Washington, D.C. to provide testimony on April 18, 2014. In a court filing by Mt. Gox lawyers, Karpelès responded that he did not have a lawyer for this matter and therefore declined to appear.[20][21] He sought to appear in D.C. to testify on May 5, 2014.[22][23]

According to a joint report by Cyrus Farivar of Ars Technica and Pierre Alonso of Le Monde, Karpelès was found guilty of fraud when he was tried in absentia in France in 2010. He also admitted to having "pirated" a server to French authorities. He was sentenced to a suspended year in jail.[24][25]

The lawyers for Ross William Ulbricht, defending him at his trial for operating the undercover Silk Road marketplace, claimed in 2015 that the pseudonymous "Dread Pirate Roberts" behind Silk Road was not him but Karpelès.[26] The Department of Homeland Security had also suspected as such in 2012-2013.[27][28] Karpelès publicly denied the claim on Twitter[29][30] and Ulbricht was eventually found guilty.[31]

After the collapse of Mt. Gox, Karpelès joined London Trust Media, the company behind Freenode and Private Internet Access, as its CTO in April 2018.[32]

Arrest and prosecution

Karpelès was arrested on August 1, 2015, by Japanese police on suspicion of having accessed the exchange's computer system to falsify data on its outstanding balance;[33][34][35] he was re-arrested and allegedly charged with embezzlement.[36]

Karpelès was released on bail in July 2016, but was required to remain in Japan.

On July 10, 2017, he pled "not guilty" to embezzlement and data manipulation charges.[37]

On March 14, 2019, the Tokyo District Court found Karpelès guilty of falsifying data to inflate Mt. Gox’s holdings by $33.5 million, for which he was sentenced to 30 months in prison, suspended for four years, meaning he will serve no time unless he commits additional offenses over the next four years. The Court acquitted Karpelès on a number of other charges, including embezzlement and aggravated breach of trust, based on its belief that Karpelès had acted without ill intent. Nonetheless, the verdict said Karpelès had inflicted “massive harm to the trust of his users” and there was “no excuse” for him to “abuse his status and authority to perform clever criminal acts.”[38] Karpelès issued a statement saying he was “happy to be judged not guilty” on the more serious charges and was discussing how to proceed with his lawyers regarding his conviction on the falsifying data charge.[39]

Bankruptcy proceedings

Mt. Gox's bankruptcy proceedings will repay creditors in Japanese yen at a price around 483 US dollars per bitcoin (total of 45.6 billion Japanese yen or 400 million US dollars) and it has been reported that this will leave Karpelès, after creditors are repaid, with the bulk of the wealth left over from the difference. Based on the market price at the beginning of 2018 (around $15,000 per bitcoin), the difference is significant, and would leave Karpelès with bitcoins valued at more than 1.4 billion US dollars.[40][41][42]

In June 2018, The Tokyo District court approved a petition by creditors to begin civil rehabilitation proceedings in lieu of bankruptcy. As these proceedings are more flexible, creditors expected that they would be compensated based on the current value of their lost coins. On August 23, 2018, creditors were able to begin filing new claims under the civil rehabilitation proceedings. Under the current schedule, compensation is expected to be distributed in late 2019.[43]

References
  1. "Declaration of Robert Marie Mark Karpeles" (PDF). US Bankruptcy Court for the Northern District of Texas Dallas Division: 1. Retrieved 13 March 2014. Cite journal requires |journal= (help) The document, signed by "Robert Marie Mark Karpeles", was published by Ars Technica on the Scribd website, and according to Ars Technica is a court document filed in US Bankruptcy Court.
  2. Farivar, Cyrus (2014-03-10). "MtGox files for US bankruptcy protection to put lawsuits on hold". Ars Technica.
  3. "Mark Robert KARPELÈS, 28 ans (TOKYO, CHATILLON SUR MARNE, PARIS)". Copains d'avant – L'Internaute (in French). CCM Benchmark Group. Retrieved 2014-02-27.
  4. King, Leo (2014-02-26). "Mt. Gox CEO Mark Karpeles: 'I am still in Japan'". Forbes. Retrieved 2014-02-27.
  5. Warnock, Eleanor; Mochizuki, Takashi (2014-02-28). "Bitcoin's Mt. Gox: a look at the man in charge". The Wall Street Journal.
  6. Philippe, Berry (2014-02-27). "MtGox: Mark Karpèles, un "supergeek" français au cœur du scandale bitcoin". 20 Minutes (in French). Retrieved 2014-02-27.
  7. Gautronneau, Vincent (2014-01-03). "Le génie côte-d'orien qui fait trembler le net". Le Journal de Saône et Loire (in French).
  8. Mick, Jason (March 5, 2014). "Bitcoin King: Mt. Gox CEO Mark Karpelès' History of Arrests, Firings". DailyTech. Archived from the original on March 9, 2014. Retrieved March 9, 2014.
  9. Karpeles, Mark. "日本 Mark Karpelès". LinkedIn. Archived from the original on 2014-02-27. Retrieved 2014-02-27.
  10. https://www.cnbc.com/id/101486280
  11. David Meyer. "A Bitcoin Exchange Goes for Respectability". Businessweek.com. Retrieved 24 February 2015.
  12. "Mt. Gox resigns from Bitcoin Foundation". Reuters. February 23, 2014. Retrieved 25 February 2014.
  13. "Mt. Gox quits Bitcoin Foundation board". PCWorld. 24 February 2014. Retrieved 24 February 2015.
  14. Jon Matonis (27 September 2012). "Bitcoin Foundation Launches To Drive Bitcoin's Advancement". Forbes. Retrieved 24 February 2015.
  15. Rachel Abrams Matthew Goldstein and Hiroko Tabuchi. "Erosion of Faith Was Death Knell for Mt. Gox". The New York Times. Retrieved 24 February 2015.
  16. Jeffries, Adrianne (April 1, 2013). "Barons of Bitcoin". The Verge. Retrieved 13 March 2014.
  17. https://online.wsj.com/article/BT-CO-20140310-712183.html
  18. "Bitcoin Exchange Mt. Gox Files for U.S. Bankruptcy as Death Spiral Continues". WIRED. Retrieved 24 February 2015.
  19. "Mt. Gox files for Chapter 15 in U.S." Market Watch. Retrieved 13 March 2014.
  20. "Mt. Gox founder won't appear in U.S. for questions about bankruptcy case". Reuters. Retrieved 24 February 2015.
  21. "Mt. Gox founder won't attend US bankruptcy hearing". CNET. CBS Interactive. Retrieved 24 February 2015.
  22. John Ribeiro (15 April 2014). "Mt. Gox seeks postponement of CEO's U.S. court deposition". Computerworld. Retrieved 24 February 2015.
  23. "BBC News - MtGox chief refuses to go to Bitcoin bankruptcy hearing". BBC News. Retrieved 24 February 2015.
  24. Farivar, Cyrus (August 1, 2014). "Why the head of Mt. Gox Bitcoin exchange should be in jail". Ars Technica. Retrieved August 1, 2014.
  25. Alonso, Pierre (August 1, 2014). "En France, le passé trouble de l'ancien " baron du bitcoin "" [Old bitcoin baron's old trouble in France]. Le Monde (in French). Retrieved August 1, 2014.
  26. Paul, Kari (2015-01-15). "Defense in Silk Road Trial Says Mt. Gox CEO Was the Real Dread Pirate Roberts". Vice. Retrieved 2019-05-31.
  27. Greenberg, Andy (2015-01-15). "DHS Believed Mt. Gox CEO Might Have Been Silk Road's Secret Mastermind". Wired. ISSN 1059-1028. Retrieved 2019-05-31.
  28. Jeong, Sarah. "Was Mt. Gox CEO The Dread Pirate Roberts? The DHS Once Believed It". Forbes. Retrieved 2019-05-31.
  29. Koebler, Jason (2015-01-16). "Mt. Gox CEO Denies Silk Road Involvement: 'I Am Not Dread Pirate Roberts'". Vice. Retrieved 2019-05-31.
  30. "Mark Karpeles on Twitter: "This is probably going to be disappointing for you, but I am not and have never been Dread Pirate Roberts."". January 15, 2015. Retrieved January 28, 2015.
  31. Mullin, Joe (4 February 2015). "Ulbricht guilty in Silk Road online drug-trafficking trial". Ars Technica. Retrieved 4 February 2015.
  32. Goldman, Joshua (2018-04-23). "Former Mt. Gox bitcoin exchange CEO Karpeles lands new job". CNET. Retrieved 2018-04-29.
  33. "MtGox bitcoin chief Mark Karpeles arrested in Japan". 1 August 2015. Retrieved 1 August 2015.
  34. Jonathan Soble (August 1, 2015). "Mark Karpeles, Chief of Bankrupt Bitcoin Exchange, Is Arrested in Tokyo". The New York Times. Retrieved August 1, 2015.
  35. "Mt. Gox bitcoin firm head arrested". The Japan News by The Yomiuri Shimbun. August 1, 2015. Retrieved August 1, 2015.
  36. "French MtGox CEO in Japan charged with embezzlement amid bitcoin fraud investigation". South China Morning Post. September 11, 2015. Retrieved September 11, 2015.
  37. "Chief of bitcoin exchange Mt. Gox denies embezzlement as trial opens". Reuters. July 11, 2017. Retrieved 2017-11-06.
  38. Furukawa, Yuki. "Former Mt. Gox CEO Mark Karpeles Gets Suspended Jail Term". www.bloomberg.com. Retrieved 15 March 2019.
  39. Pham, Sherisse. "Former Mt. Gox chief Mark Karpeles acquitted of most charges in major bitcoin case". CNN. Retrieved 15 March 2019.
  40. ALEX; Harney, Ra; Stecklow, Steve. "Twice burned - How Mt. Gox's bitcoin customers could lose again". Reuters. Retrieved 2019-05-31.
  41. Narioka, Kosaku (2017-11-09). "Former Bitcoin King Is Bankrupt—And He Could Get Rich Again". Wall Street Journal. ISSN 0099-9660. Retrieved 2019-05-31.
  42. Jeffries, Adrianne (2018-03-22). "Inside the bizarre upside-down bankruptcy of Mt. Gox". The Verge. Retrieved 2019-05-31.
  43. "Q&As for Filing Proofs of Rehabilitation Claim" (PDF).
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