"We learned that Mark only had one bank account, shared with Mt.Gox's customers"

[americanpegasus]

 


  
 
  
Ashley Barr is doing an AMA over on Reddit, and I hope won't mind me quoting this portion because it might be the most insane thing I have ever read in the history of bitcoin.  This is an answer to the top-voted question, basically asking "What the hell happened over there?"  
  

"A lot of ridiculousness, and a lot of nothing. I hired the initial employees, Mark hired some devs (his friends) and not a whole lot was accomplished during my time there. Everything was walled-gardened (I think I made up a word) by Mark. I recall the dev's (and Mark) playing Oblivion, super meat boy and other games while shit was hitting the fan. I don't blame the dev's, they had no access, not even a pre-production server to help Mark with the exchange. In the truest sense of the work, Mark was a maverick, making live updates to the exchange (some went well, others didn't). All in all, I felt Mt.Gox was an RPG to Mark, as he didn't quite grasp the reality that the money being in deposited into his bank account meant more to other people than just numbers on his screen.

I gave two statements, the first was more general. I told them the story of why I was dismissed. Basically, after Mark asked me to be CEO, I tried my best at due-diligence. I asked Mark to show me the financials of the company. He wouldn't, or feigned that he would do it later, all while pressuring me to take the role. Mt.Gox's trading history was public (the fee-structure wasn't, however), so me and a couple of employees calculated on an average what Mt.Gox's profits would have been. We then looked at the expenses (eye-witness expenses only [AKA, we collaborated and make a list of things we had seen were purchased for the company] so it's not accurate, but surely less than what was actually spent), and used the trading data to calculate some averages around Mt.Gox's profits. The expenditures far exceeded every model we had for income. I confronted Mark about it, told him I couldn't take the role if he couldn't explain this gross incompetence in spending (he was also asking employees other than myself to find investors...something impossible without knowing the financial status of the company). Around the same time, we learned that Mark only had one bank account, shared with Mt.Gox's customer deposits. That was the nail in the coffin."

 
https://www.reddit.com/r/Bitcoin/comments/3fe92x/im_ashley_barr_aka_adam_turner_the_first_mtgox/
  
 
  
To all those this happened to, I am so sorry... what an awful way to lose such a massive amount of money.  Legal justice won't replace your savings, but it's a small measure of comfort.

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[Benjig]

Well this case was used to be interesting for all the bitcoin community, now its just going ridiculous.

[Lauda]

As I was recently saying, this guy needs to go to prison. He was doing suspicious things, and if the story is correct then it confirms it.  It doesn't really matter how Mark lost the coins, he's still to blame. He had the responsibility to hold everyone's money.

However, this story is getting very ridiculous.

I finally gathered a small group of employees to pressure Mark into answering how we spent more money than we've made, his answer was simply:
"My grandmother lives in a castle in switzerland"

What's worse is that he kept over 420K BTC in web connected computer. Mt.Gox had so much potential, but it ended up being only a huge problem.
I'm glad that we're soon going to finish the final chapter of Mark and Mt.Gox.

[phonebased]

It is the weakness of the centralized exchanges! We got a hard lesson from the collapse. They can do everything they like for their own profit, like manipulating the price, identify leaking, getting hacked etc.  

[Lethn]

If people still have the balls to blame Bitcoin itself over this when it was clearly Mark Karpeles' sheer incompetence I really don't know what to think of the human species anymore.

[WhatTheGox]

Mark probably still blames bitcoin as his lawyers tell him its the right thing to do.  Hopefully we see some justice in all this beyond just a part of the 200k coins coming back to us.

[LiteCoinGuy]

--------- Security ---------

"Yes. We had multiple meetings about this... [Marks] response was laughable.

Mark said that if he died there would be hints that one of his best friends could follow to find and unlock the cold-wallets. When I asked said friend, he said he had no idea what Mark was talking about."


 

[Mickeyb]

Good God, how much incompetence. A school boy would design and secure the funds of Mt. Gox better than what Mark did. Both, hot wallets and bank accounts (or a single bank account). This is really getting ridiculous!

[Snorek]

It is the weakness of the centralized exchanges! We got a hard lesson from the collapse. They can do everything they like for their own profit, like manipulating the price, identify leaking, getting hacked etc.  

And if case you did not notice every other bitcoin service beside blockchain&bitcoin itself is not decentralized. Every bitcoin exchange so far, every bitcoin payment processors, online wallets, casinos.
Everything is susceptible to identity leaking, hacking etc. This means we are doomed?

[Professor Plums]

I'm sure he will go to prison for something whether it be fraud theft or just gross negligence/incompetence. Would be interesting to find out what actually happened to the bitcoins. Does Mark still have them somewhere?

[marcus_of_augustus]

I'm sure he will go to prison for something whether it be fraud theft or just gross negligence/incompetence. Would be interesting to find out what actually happened to the bitcoins. Does Mark still have them somewhere?

... seems the prime suspect is now an old lady in a castle in switzerland.

[gentlemand]

Emblematic of the whole early BTC scene pretty much and how far it still has to go. There are still no shortage of businesses, investment 'opportunities' and advice that are still sub high school gym level.

[NorrisK]

Wow, this is a very interesting story. Follwing that reddit page from now on, nice to see some insiders presenting facts!

[gentlemand]

Wow, this is a very interesting story. Follwing that reddit page from now on, nice to see some insiders presenting facts!

Why on Earth didn't they post some alarm bells at the time? There's no shortage of anonymous options to do so.

[jonald_fyookball]

maybe he thought mingling of funds would give him some plausible deniability.  "I wasn't embezzling.  Those were my funds in that account".   What a dope. 

[marcus_of_augustus]

Wow, this is a very interesting story. Follwing that reddit page from now on, nice to see some insiders presenting facts!

What part of your life history makes you think some guy on an Internet forum is "presenting facts"?

[Alley]

He was simply in way over his head and had no clue his exchange would grow as it did.  He had no idea how to run a business.  Probably has a low IQ.

[5dollarbill]

i don't know if I should laugh or cry. absolutely amazing how he disregarded security and separating his personal stuff from depositants money...

[Cryptopher]

Running an exchange of Gox's stature is certainly not trivial, even in the world of Bitcoin where there is potential for lots of manipulation within the price, ultimately you are running a business that needs a solid model.

There are so many costs involved in running such an operation, alarm bells should have been ringing when we saw MK taking an interview on a Swiss ball.

I've only read a bit of the AMA on Reddit, however it's uncomfortable reading getting an insight into how the exchange was being managed, how the operation lacked the seriousness that was required for an operation of such magnitude. Seems to me that it all grew too fast.

Feel real bad for those who have lost and felt the strain as a result of what happened at Gox, despite the risks that come with trading at ANY crypto exchange.

[kilter71]

Only an idiot, or someone who intentionally stuck their head in the sand, couldn't see there was an issue at Gox years before it went belly up.  Why people put money there I have no idea.  Maybe it wasn't obvious what the  problem was (we have more details now) but there was something off and it was only a matter of time.  I got the feeling there were a lot of naive younger people who had money/btc there.