Cryptocurrency 'Villain' Tells His Side of the Story

Mark Karpelès opens up to 'Fortune'
By Neal Colgrass,  Newser Staff
Posted Apr 29, 2018 4:30 PM CDT
Ex-Bitcoin CEO Reveals Jail Nightmare, Says 'Bitcoin Is Doomed'
Mt. Gox CEO Mark Karpeles listens to a reporter's question at a press conference at the Justice Ministry in Tokyo, Tuesday, July 11, 2017.   (AP Photo/Shizuo Kambayashi)

One of the most infamous figures in Bitcoin history has endured death threats, interrogations, and a year in solitary at a Tokyo jail. Now Mark Karpelès is telling his full story for the first time. "I think this really is the worst experience for anyone to have in life," he tells Fortune. "But based on the information I had at the time ... I still think that I've done the best I could." To recap: Karpelès was CEO of Mt. Gox, the world's biggest Bitcoin exchange, when an apparent $473 million hack forced it to declare bankruptcy in 2014. Karpelès says he then found 200,000 missing Bitcoins in an archived file, but critics said he was just dangling his secret stash to appease creditors. Perhaps worse, leaked records indicate that Mt. Gox had fraudulently inflated its numbers to stay afloat.

For that, the Frenchman was arrested by Japanese police in 2015. He denied everything during months of interrogations, he says, and lost 70 pounds in his cell. Now free while on trial for embezzlement and other charges, he was partly vindicated when Russian citizen Alexander Vinnik was arrested for allegedly laundering most of the hacked Mt. Gox Bitcoins. But they remain lost, and the sharp rise in Bitcoin value only complicates matters because Japanese bankruptcy law would give most of it to Karpelès—who wrote on Reddit that he'd pass on what could be worth over a billion dollars, Business Insider reported. "The only thing I'm touching related to cryptocurrency is how to solve this bankruptcy," he tells Fortune. "Bitcoin right now is, I believe, doomed." (A suspected Bitcoin thief broke out of a low-security prison and flew home to Sweden.)

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