As someone that still has Bitcoin tied up in the Gox civil rehabilitation suit, I feel justice is adequately served here.
Karpeles was clearly in over his head, and made terrible decisions after the hacking, but I don’t believe imprisonment would serve any meaningful purpose, and I do believe he feels genuine remorse for his actions.
> but I don’t believe imprisonment would serve any meaningful purpose
Sure it would! It would serve as a deterrent. Some people shouldn't be handling hundreds of millions of USD.
Karpeles' operation wasn't just unprofessional finance, it was a complete shit-show. The court should have sent the message to others to not attempt something as complicated and risk-laden as operating a financial exchange without even the slightest bit of know-how necessary to do that.
Startup culture can be great, but it's amazingly dangerous when operating certain trades or industries.
> Sure it would! It would serve as a deterrent. Some people shouldn't be handling hundreds of millions of USD.
I don't think Mark ever expected to handle that kind of money. It just sort of happened. One of the things usually needed to prove a crime was committed was that there was the intent to commit it.
> Startup culture can be great, but it's amazingly dangerous when operating certain trades or industries.
Mark's about the furthest thing from a startup bro. Honestly, I got the vibe he started MtGox as a hobby that happened to make money. A lot of it doesn't make sense from a business planning standpoint. Bet you didn't know the parent company of MtGox was named after his cat and served as a hosting company and domain registrar. He's a gentoo nerd that had a pet project win the lottery. There's far more to question about what the exchange had happen before he took it over, but I suppose jed won't talk about that.
To be fair though the year he spent in jail probably added some years to his life. While I doubt it was great for his mental health, it did wonders for getting his weight under control.
> I don't think Mark ever expected to handle that kind of money. It just sort of happened.
That is probably true, and I wouldn't expect anyone to stand in the way of something that they had created and that developed such a momentum. How could one!
What I would expect, however, is (1) that person to recognize this momentum, (2) to recognize that this momentum is way above the person's head, and (3) to rent or hire the know-how necessary to deal with this.
IT Security consultants, legal experts, people with experience in running exchange systems, etc.
> One of the things usually needed to prove a crime was committed was that there was the intent to commit it.
There's no question of that, as the court found that he had tampered with accounts and manipulated records to hide losses.
> Honestly, I got the vibe he started MtGox as a hobby that happened to make money.
Mtgox was started by Jed McCaleb. He essentially gave it away for free to Karpeles when he realized that he was in over his head. It seems he was already losing money running mtgox and just wanted to get rid of it.
You seem to be describing premeditation. Criminal intent just means that you didn’t do it by accident. Did Karpeles ever knowingly misstate Mt. Gox’s bitcoin holdings? That’s intent, even if he never meant to be responsible for so much money.
Tux has really slimmed up for sure. Let's be honest and say Jed's the real Teflon Don MVP unloading the MtGox shitshow on Mark, doing the ripple thing, selling that chainless shitcoin to banks and rinsing and repeating again with Stellar.
as far as i understand Mt Gox wasn't a financial exchange, it was a marketplace for non-financial stuff like for example Magic cards and cryptocurrencies. People putting hundreds of millions of real money into a virtual goods traded at a place not registered with SEC have only themselves to blame.
That clearly depends on the magnitude of whatever Mark has stashed away for the day when the personal heat is off him.
More than 100k BTC was "found" post bankruptcy IIRC, and only when the community started talking about where they were visible on the blockchain.
It is way too tempting to hide cryptocurrency, especially when accounting is a mess at best. We know for a fact that Mark traded on his own exchange and he must have known early on that it was not sustainable.
Remorse may not be the only thing that's important here. It must also be clear that white collar crime is not a business opportunity.
Having lost over 350 Bitcoins myself, I would say this is a fair verdict. Mark Karpeles was in over his head, that is true, but so are most people in startups or companies that end up hurting people or losing their money. If we were to start jailing people who lost other people's money then 95% of all people who take investment would be in jail.
So, if you buy bank shares today and it turns out the bank has been insolvent for 2 years already and management was hiding this from investors, this is totally fine, as long it's not an established bank but a "startup" bank, am I understanding you correctly?
Mark was in way over his head but nobody says he should be jailed for being in way over his head. He should be jailed for defrauding people. He cooked the books and he hid the fact that MtGox was insolvent practically from the moment he bought it.
You may be right, I don't know. I will probably have to wait until some good unbiased sources explain how the whole thing unfolded from start to current day. I've been wrong before, and maybe I am this time too, but right now I give Mark the benefit of the doubt until I am sure
And yes, I did lose money from insolvent banks too in the 2007 - 2008 Financial Crisis, and no one went to jail for that either, even though they hid information from investors and depositors... but that is partly why I was interested in Bitcoin in the first place...
I wasn't talking about big banks or wall street. I was talking about startups who take investors money, and often totally mismanage their companies. They usually don't do it to cheat investors, they are just over optimistic, and not experienced enough.
What I guess you are referring to is when big banks and wall street deliberately cheat and take investors money. And I think that should require people going to jail.
Optimistic and/or naive people are not exempt from being held accountable. Regarding this particular case, Karpeles was handling lots of money and clearly 'cooked the books' for his own advantage. We know that.
Also, from my own personal experience, startup culture is full of lies and deceit, and investors are not always big money firms looking to land its next unicorn exit. Regular people also invest in many startups.
There can't be special rules is all I'm saying. We need to improve 'startup culture' and one of the ways of doing that is by holding people accountable.
I agree with most of this, especially about the deceit and lies, even with a lot of the fast growing startups like Facebook and Google. There are also a huge number of honest startups, but we don't hear much in the news about them as they just keep going along making a couple of million dollars a year for their founders.
It is hard to hold people accountable as the legal system doesn't support this, even here in Europe. I don't know how to improve startup culture myself, except maybe to act with integrity in my own work, and to make sure that I do my homework better when I evaluate a startup
And yes, regular people generally get wiped out when they invest in startups, it happened to me a few times in the past too, but I wanted Unicorn exits too the same as the VC firms :)
There is a world of difference between being an investor of a startup and having your money/property with a company. The former is an owner and the latter is a customer. Also, I find it odd that the top two comments are the same "over his head" and "fair punishment".
Gwern: "we know
the mtgox.com domain had a landing page discussing a forthcoming Magic card trading site (because a 2007 page is in the Internet Archive), but we can't find any evidence that there was any actual trading going on. Did anyone ever actually trade card for card or money for card on Mtgox.com?" McCaleb: "yeah they did"https://www.gwern.net/docs/bitcoin/2014-mccaleb
The decision was made solely by the trustee for all the benefit but yet people call him the Tokyo whale who crashed the market in 2018. (Which is BS considering it was about to explode anyway when the price went up 20x.)