Three years ago, Mt. Gox’s Chief Executive Officer, Mark Karpeles, became one of the most hated names in the Bitcoin and cryptocurrency world. Today, he may become one of the richest.
Based out of Tokyo, Mt. Gox once was the largest Bitcoin exchange, at one point handling 80% of all Bitcoin trades worldwide. In 2014, however, the platform declared bankruptcy, claiming it had lost around 850,000 Bitcoins to hackers. Since the alleged hack, Mt. Gox and Japanese authorities managed to recover 202,000 of the missing Bitcoins.
Japanese bankruptcy codes required registering the Bitcoins according to their market values at the time the proceedings began, which was around $500 per one Bitcoin. Today, the price of one Bitcoin has hit a record of over $8,000. This means that Karpeles, who owns 88% of Mt. Gox through his holding company, Tibanne, is looking to receive over one billion dollars in surplus once the platform’s creditors are payed off (at Bitcoin’s 2014 price of $500) and the capital gains are granted to Mt. Gox.
Karpeles is currently facing numerous charges in Japan, including data manipulation and embezzlement. These charges stem from a transfer Karpeles made from Mt. Gox user funds to his personal account and for increasing the value of his account on the exchange. Karpeles pleaded not guilty to the charges claiming that the increase was due to a legal, administrative exchange of the currency and that the remittance was a valid transfer of company revenue.
Unsurprisingly, Mt. Gox creditors are unhappy with the news of Karpeles’s serendipity and are publicly expressing their dismay. However, Karpeles is apparently attempting to make amends by expressing possible plans to revive Mt. Gox in order to remedy the 2014 disaster, which many believe was due to his poor managerial skills. Karpeles promises that he would have no role in the revived exchange.
Although Mt. Gox users were directly injured by the exchange’s fall from grace, Karpeles severely damaged the already tainted reputation of Bitcoin and crypto currency. The hack, loss of funds, and criminal charges, from what was once the largest Bitcoin exchange, did not help foster confidence in the legitimacy of the already tainted view of Bitcoin and cryptocurrencies.
Bitcoins and the like are finally emerging from unwanted association with illegal and black market activity and facing extensive regulatory obstacles. So even though the likelihood of Karpeles reviving Mt. Gox is quite low, and even if he will have “no role nor benefit at all, except for the fact people may hate [him] a little less,” maybe it is best Karpeles steer clear of any plans for a Mt. Gox comeback, for the sake of the Bitcoin community.
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