For me the best explanation is this one:
1. The leak was found months/years ago.
2. Declearing the situation begins the down fall of the business. Karpeles being a young enterpreneur who “Giving up is not a part of how I usually do things", thinks he can revert the situation. "I made millions, I could do it again, and the lose can be covered". He is in fact too young to judge situation by past experience; youngsters like him needs a mentor (many young enterpreneurs did get one)
3. Facing lack of liquidity, and unable to solve the leak without the risk of revealing code and cold fact to outside experts, he decideds South American can help him. Expansion towards South American both boost confidence and the new money postpone the revelation.
Mark is too young to be a good businessman and too smart to acknowledge it. There is a big ego acting, since being the CEO of the world 's leading bitcoin exchange has defined him so far. He was ambitious to start with: "my goal is world domination"(source:
http://online.wsj.com/news/articles/SB10001424052702304071004579407022025451070 even jokingly, a youngster's ambition is hard to hide)
I reason that the kind of
misjudement (or hubris?) demonstrated in this paragraph can only be from a big ego:
The reality is that MtGox can go bankrupt at any moment, and certainly deserves to as a company. However, with Bitcoin/crypto just recently gaining acceptance in the public eye, the likely damage in public perception to this class of technology could put it back 5~10 years, and cause governments to react swiftly and harshly.
At the risk of appearing hyperbolic, this could be the end of Bitcoin, at least for most of the public. We believe in the value of Bitcoin, its potential to change the world, and its principles of transparency. Most importantly we care about the customers of MtGox and other bitcoin-based businesses who will be affected. The likely consequences will be larger than this localized financial damage, and we believe that the benefits of keeping MtGox stable and running outweigh the risks.
Knowing the leak, MtGox would weight the 'stable and running' over the risk of exposing the problem, just like Chinese government. If it is ture now, it was since the leak was found, because MtGox had more market share then.
You may wonder how he gets to sleep everyday with this. This guilty feeling, the impulse to face the fact, doesn't apply to self-proclaimed genuines in their heights. When I run my first business (22 years old) my intelligence was superior in the small circle we had, and I decide that pedestrian concerns doesn't apply to me. I was in a similiar situation burning my own money and I decide if I could make them in the first place I can do it again as easily, and sleep as soundly as usual. I too naïvely seek business expansion when it was failing. Man wasn't born with personal integrity, some has to suffer to build it. I did. Multiply this sensation many times for a smarter guy like him, I know Mark K. can manage to sleep well and live happily with his cat (except that he is leaking
others' money) and to hide the fact away, thinking he is doing mankind a favor. In fact, he perhaps still have rather high "self-esteem", knowing that he is impacting the world by being able to weight different outcome of MtGox - and people pay atttention to his newly gained weight. You can hardly blame him for pure evil, because he lack grown integrity, for judging by age his is in the midst of building one. The mistake is that the world allowed too much stake on a young man like him.
It would be a mistake if you think his nonchalant attitude (showing cat etc) means the business is okay or he has a solution.
Next time when you seek to do business with a company, put more stake if the guy/woman is married (marrage teaches a lot), even more if he had bankrupted and maintained good relationship with former employees and clients. Tripple so if he endeavours difficulty
and didn't turn to blame someone the moment when things go wrong.
Now, technically, I've been a tech engineer and I know it is possible that a bug in a complex system takes more than half a year to find or solve - especially if firefighting constantly takes away your focus, and especially the system was running all the time, and especially it is a single point of failure, and MtGox has all 3 characters. Such thing happened in other complex systems before.
(Edit after reader assumed that I am defending Mark) this is not saying MtGox is forgivable, but to emphasize that Karpeles made a bad judgement to choose to hide it over exposing it to the experts. To blame it on lack of a grown personality integrity is better than to blame on lame tech. Mind it, if another CEO consider the essential of this event being bad programming skill, don't use his bitcoin services, because he too lack the personal integrity. Errare humanum esta, the way you treat it tells your integrity.
