Categories: News

Ex-CEO of Mt. Gox found “not guilty”

Mark Karpeles, the ex-CEO of the bankrupt Mt. Gox bitcoin exchange, was found “not guilty” by jury in Japan on charges of embezzlement and violating company law. This is a weight lifted off the back of a pioneer in the Bitcoin space. Mt. Gox was the first major bitcoin exchange in the world and processed the majority of all bitcoin exchanges for several years. While a vulnerability allowed an attacker to siphon bitcoin directly out of the exchange’s pool of funds, it is unknown whether Karpeles or other staff members had any knowledge of such theft. Due to the lack of auditing structure and vigilance, as well as the previous thefts at Mt. Gox, it is not far-fetched to believe the “sinister” actions of Mark Karpeles were no more than negligent financial monitoring infrastructure and poor operational security procedures.

Though he has been found guilty of “tampering with records” by Tokyo District Court, his lawyers are deciding how to go about responding to it. He is also under a lawsuit by Gregory Greene and Anthony Motto, two users who had their money lost at the exchange. The lawsuit was reinforced by the Illinois District Court after rejecting a request from Karpeles to dismiss the lawsuit. It is possible that such a lawsuit will be viable, and Mark Karpeles may still be personally liable for some of the losses at MTGOX. The proceedings will continue in Illinois as the plaintiffs move forward in the case.

This serves as a reminder to everyone that though leaving your cryptocurrency on an online exchange may sound convenient and secure, but unless you alone are in control of your own private keys, your funds are vulnerable. These cases are setting precedents for future exchange hacks and the responsibilities of the company and executives at cryptocurrency exchanges. Maintain as much trustlessness as possible to maintain as much security as possible.

David DeSantis

I have been a cryptocurrency advocate since I started my first bitcoin miner in 2014. Learning about the theory, code, and revolution consumed most of my free time for months. I have been hooked since. When I’m not being a CFI, I am a developer, trader, researcher, advisor, consultant.

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David DeSantis
Tags: Crypto ExchangeMt. Gox

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