Mark Karpelès - Misplaced Pages

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Mark Karpelès
Born	Mark Marie Robert Karpelès (1985-06-01) 1 June 1985 (age 39) Chenôve, France
Citizenship	France
Occupation	Entrepreneur
Known for	Former CEO of Mt. Gox

Mark Marie Robert Karpelès (born 1 June 1985) is the former CEO of bitcoin exchange Mt. Gox. Born in France, he moved to Japan in 2009. Under his leadership, Mt. Gox was the world's largest bitcoin exchange, handling over 70% of all bitcoin transactions at its peak, before it filed for bankruptcy in 2014. Karpelès was subsequently arrested and convicted of data manipulation related to his role at Mt. Gox.

Early life and education

Born in Chenôve, France, he is the child of geologist Anne-Robert Karpelès. He was raised in Dijon. From 1995 to 2000, he attended Collège Prieuré de Binson in Châtillon-sur-Marne, near Dormans. He then spent one year at Lycée Claude Bernard in Paris before completing his education in 2003 at Lycée Louis Armand in Paris.

Career

Karpelès began his professional journey as a PHP developer. In 2009, Karpelès founded Tibanne Co. Ltd., a Japan-based bitcoin related technology provider, where he served as CEO. 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.

Mt. Gox

In 2011, Karpelès acquired the Mt. Gox bitcoin exchange site from programmer Jed McCaleb, with its original owner receiving 12% shares of the new company. Under his management, the platform handled the majority of global Bitcoin transactions by 2014. Despite its success, Mt. Gox faced growing operational and security challenges, compounded by the rapid expansion of its user base. Karpelès implemented various security upgrades and sought to stabilize the platform. However, Mt. Gox experienced a major theft in 2014, which resulted in the loss of a significant amount of Bitcoin. Mt. Gox filed subsequently for bankruptcy in Japan on 28 February 2014, and for Chapter 15 bankruptcy in Texas in March 2014. Karpelès was arrested in 2014 for actions related to his role at Mt. Gox and eventually convicted of data manipulation and falsification.

Bankruptcy proceedings

Mt. Gox's bankruptcy proceedings initially planned to repay creditors in Japanese yen at a price of approximately 483 US dollars per bitcoin, resulting in a total repayment of 45.6 billion Japanese yen (around 400 million US dollars). At the market price at the beginning of 2022 (around $35,000 per bitcoin), this would have left Karpelès with a significant amount of wealth. However, Karpelès stated that he did not want the profits he was set to receive from the bankruptcy proceedings. Under Japanese bankruptcy laws, around $1 billion of the money received would go to the company's shareholders, with the largest being Karpelès’ company Tibanne, which owned 88% of Mt. Gox.

In June 2018, the Tokyo District Court approved the petition, lead by Karpelès, to begin civil rehabilitation proceedings. This allowed for more flexible repayment terms, including compensation based on the current value of the lost coins. Creditors were able to start filing new claims under these proceedings in 2018, but a 2021 federal lawsuit in the U.S. by Mt. Gox customers was unable to proceed as a class-action lawsuit, which placed hopes of compensation in jeopardy.

In July 2024, Mt. Gox began repaying its creditors in Bitcoin and Bitcoin Cash under the legal rehabilitation plan. Attorney Nobuaki Kobayashi oversees the process, ensuring that all creditor verifications and agreements are in place before disbursements. Of the 850,000 lost bitcoins, 200,000 bitcoins were recovered, of which 60,000 were later sold by the trustee to secure funds. Given the dramatic increase in Bitcoin's value, the repayment process is substantial. In early July 2024, Mt. Gox moved 47,228 BTC, valued at approximately $2.7 billion, out of its offline wallets as part of the repayment process. Entities like MtGoxBalanceBot have been transparently tracking these movements, providing updates to the community. As of late July 2024, approximately 40% of the Bitcoin owed to Mt. Gox creditors had been distributed, leaving about 60% still to be returned. This ongoing process involves significant movements in the cryptocurrency market, with the total amount owed to creditors estimated to be around $10 billion.

The total sum owed to creditors accounts for roughly 0.7% of the total Bitcoin in circulation. The 850,000 lost bitcoins were worth approximately $450 million at the time of the hack, and the 140,000 bitcoins recovered are worth around $10 billion at a price of $65,000 per bitcoin by end of July 2024. This means that creditors are receiving about 16 times more value in today's market.

Subsequent ventures

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. In November 2019, Private Internet Access was acquired by Kape Technologies for $127.6 million. In 2022, Karpelès announced Ungox, a project aimed at evaluating the risks of cryptocurrency products and exchanges. In 2023, Karpelès was appointed as the minister of technology for Joseon, which operates a blockchain to manage its currency Mun

In 2024, Karpelès announced the launch of EllipX, a new cryptocurrency exchange. The exchange will launch in Poland and comply with European Union regulations. Karpelès stated that this new venture reflects his commitment to rebuilding trust in the crypto space after the collapse of Mt. Gox in 2014. Karpelès serves as the chief technology officer of the company.

Arrests and convictions

In 2010, at the age of 25, Karpelès was found guilty of fraud during a trial in absentia in France related to his actions on a private server, and he received a suspended sentence of one year in jail.

In April 2014, Karpeles was subpoenaed by the United States Department of the Treasury's Financial Crimes Enforcement Network (FinCEN) to appear in Washington, D.C., for testimony on 18 April 2014. Mt. Gox lawyers filed a court response stating that Karpelès did not have legal representation for this matter and therefore declined to appear on the initial date. They requested a new date for his testimony, which was set for May 5, 2014.

On August 1, 2015, Karpelès was arrested by Japanese authorities on suspicion of accessing the Mt. Gox computer system to manipulate account balances. Tokyo prosecutors indicted Karpelès on a series of charges, including embezzlement and aggravated breach of trust, and called for a 10-year prison sentence. He was released on bail in July 2016, with the condition that he remain in Japan. On July 10, 2017, Karpelès pled not guilty to the charges.

On 14 March 2019, the Tokyo District Court found Karpelès guilty of one count of data manipulation related to Mt. Gox's account balances. The Tokyo District Court found Karpelès not guilty of all other charges and handed down a suspended prison sentence for the falsification conviction.

During the 2015 trial of Ross William Ulbricht for operating the Silk Road marketplace, his defense argued that Karpelès, rather than Ulbricht, was the individual behind the pseudonym "Dread Pirate Roberts". Homeland Security Investigations agent Jared Der-Yeghiayan had also suspected Karpelès during the 2012–2013 investigation, though no evidence supported this theory. Karpelès denied any involvement on Twitter, and Ulbricht was ultimately convicted.