Mt. Gox employees talking to press and Tokyo cops

[Nagle]

"Mt. Gox faced questions on handling client cash long before crisis" - Reuters exclusive.

"A bankruptcy administrator and police are seeking to determine how a Tokyo start-up that shot from obscurity to dominate global trade in bitcoin managed to lose more than $27 million in old-fashioned cash held in a bank as well as bitcoins worth close to $450 million at today's prices."
...
"In interviews with Reuters, current and former employees at Mt. Gox described the strains that emerged over the handling of customer money just as the firm was gearing up for expansion and bitcoin was edging out of the shadows as an investment and a means of online settlement.

By early 2012, a small group of Mt. Gox employees, all of whom worked on one-year contracts, began to worry that customer funds had been diverted to cover operating costs that they estimated to be rising. Those costs included rent in a Tokyo high-rise that also housed offices for Hulu and Google, high-tech gadgets such as a robot and a 3-D printer and a souped-up, racing version of the Honda Civic imported from Britain for Karpeles, people who have reviewed expenses said."
...
"Karpeles was the only person at Mt. Gox who had access to the bank accounts, and each withdrawal request was handled manually, slowing the process, three former employees said."

With former employees talking to the press and police, jail for Karpeles looks a lot more likely.

[N12]

Those employees have done us a disservice not blowing the whistle on this long ago. I would have liked to know that deposits were being used to buy 3d printers, roboters and cars.

[Nagle]

Those employees have done us a disservice not blowing the whistle on this long ago. I would have liked to know that deposits were being used to buy 3d printers, robots and cars.

The employees had no one to report it to. It wasn't clear that Mt. Gox had a legal obligation to segregate customer funds. The Japan Financial Services Agency wasn't regulating Mt. Gox.

Now, at a real brokerage, in the US or Japan, dipping into customer funds is a crime, and employees have an obligation to report it.

Once there's a bankruptcy and fraud is suspected, it's all different. Now it's time for employees to cooperate with the cops, so they don't take the fall for the crime. (In the US, the first person to report a multi-person fraud to prosecutors gets off. But only the first person. Sometimes this results in a race to the prosecutor's office.)

[smoothie]

Those employees have done us a disservice not blowing the whistle on this long ago. I would have liked to know that deposits were being used to buy 3d printers, roboters and cars.

Anyone with a conscience would have blew MTGOX up years ago when this was going on behind closed doors. Tsk tsk tsk

[hardpick]

he lost $500 Million  --- a car -and printer  maybe $200 K  ---- need to find the $499.8 Million

[Bit_Happy]

...
With former employees talking to the press and police, jail for Karpeles looks a lot more likely.

Best news I've heard in recent memory.
Please put Mark in jail where he belongs.

[TheButterZone]

http://en.wikipedia.org/wiki/Embezzlement

[silvermario]

he lost $500 Million  --- a car -and printer  maybe $200 K  ---- need to find the $499.8 Million

This is about the situation in 2012, he haven't got $500 mil back then.
This only shows how unprofessional Karpeles dealt with customer funds.

[Bit_Happy]

At least the police are involved.

[Oldminer]

I hope Jim from 'support' is onto this too. Hopefully the Japanese police will be able to make more sense of his useless rants than I ever could 

Go get 'em tiger 

[Imerman2]

"Mt. Gox faced questions on handling client cash long before crisis" - Reuters exclusive.

"A bankruptcy administrator and police are seeking to determine how a Tokyo start-up that shot from obscurity to dominate global trade in bitcoin managed to lose more than $27 million in old-fashioned cash held in a bank as well as bitcoins worth close to $450 million at today's prices."
...
"In interviews with Reuters, current and former employees at Mt. Gox described the strains that emerged over the handling of customer money just as the firm was gearing up for expansion and bitcoin was edging out of the shadows as an investment and a means of online settlement.

By early 2012, a small group of Mt. Gox employees, all of whom worked on one-year contracts, began to worry that customer funds had been diverted to cover operating costs that they estimated to be rising. Those costs included rent in a Tokyo high-rise that also housed offices for Hulu and Google, high-tech gadgets such as a robot and a 3-D printer and a souped-up, racing version of the Honda Civic imported from Britain for Karpeles, people who have reviewed expenses said."
...
"Karpeles was the only person at Mt. Gox who had access to the bank accounts, and each withdrawal request was handled manually, slowing the process, three former employees said."

With former employees talking to the press and police, jail for Karpeles looks a lot more likely.

Am I the only one that thinks an exchange that owned 100,000 Bitcoins, and handled a large portion of all Bitcoin trading could afford these things.  This article is laughable.  All their "facts" are vague with no sources and aren't anything out of the ordinary for a company with over $500 million in assets.  Employess didn't like the boss who was probably much younger than them leading them to challenge his authority, they have a meeting to ask for more power, boss doesn't want to appear weak and lose control of the business.  After trouble in business, same disgruntled workers who wanted more power now throwing the boss under the bus.  That's not news, for the media it creates controversy, but there was no substance.

The only way Karpeles goes to jail is if he wasn't properly maintaining his corporate veil, meaning he didn't maintain separation of his company as a separate entity.  The article said nothing important.

[mgroenouwe]

I think that if MK owned 100,000 BTC he could afford to pay all the expenses he made. Even a private car. Why not?
Maybe it's wrong to use our money to buy it, but two years ago he couldn't buy it with Bitcoins...

Furthermore, when almost all BTC are recovered MK can use his own BTC to cover all of the fiat money missing.

To ensure that the price of BTC isn't going down to much at once, he could sell his BTC dozens at a time instead of all at once. Some script that sell's like 10 BTC every hour or so. With that kind of BTC no one will even notice that. It will take only a few months to cover all the money missing and quicker when the price goes up.

[janos666]

A Honda Civic?
Really???
It that what it took to break all the hell loose around Bitcoin? A Honda Civic?

Every time I read something new about Mt.Gox I say "it can't get any more ridiculous than this" and it always does.

Breaking news: The CEO of a thousands of $ million worth company dared to buy an expensive version of a Honda Civic.
LOL! Just LOL...

I am not a CEO of $million+ company and yet I wouldn't be happy with a Honda Civic, even if it's a "racing version".
And I need a decent car for my work. I couldn't imagine how you can be a company CEO without a decent car.

It wasn't even a Ferrari or a Lamborghini. And even then, that would be practically nothing compared to the missing funds.
How could somebody say these things without laughing?

[clownius]

you havre to understand the level of hate for anything MTGox here.   If he spent money on anything more expensive than 2 minute noodles someone here will have a shitfit.

[dserrano5]

If he spent money on anything more expensive than 2 minute noodles someone here will have a shitfit.

OTOH the same happens if he spent money on anything cheaper than a mansion as we're seeing in this very thread.

[RodeoX]

Grr. I wish they would provide some info on who they talked to. Otherwise it's just another anonymous claim. Oh well, now that the courts are involved I think we are going to find out a lot. Judges are not going to entertain statements that "a guy on the Internet" made. There will be subpoenas for witnesses and jail time for lairs. There will be accountants and fact checkers and no place for the truth to hide. Then we will likely know what happened.

[Nagle]

Breaking news: The CEO of a thousands of $ million worth company dared to buy an expensive version of a Honda Civic.
LOL! Just LOL...

The original Reuters article says Mt. Gox was only generating about $1500 a month in income at that point.

Remember all those deals under which big traders didn't pay fees? 

[itsunderstood]

Lawyers won't do shit.  Their cadre is completely an enemy of humanity.

http://www.cbsnews.com/news/is-the-us-stock-market-rigged/

[...]

Michael Lewis: One hedge fund manager said, "I was running a hedge fund that was $9 billion and that we figured that the, just our inability to, to make the trades the market said we should be able to make was costing us $300 million a year." That was $300 million a year in someone else's pocket.

Steve Kroft: Is this illegal?

Michael Lewis: No. That's the thing that's so shocking about all this. It should...

Steve Kroft: Well you used the word front running. Front running's illegal.

Michael Lewis: This form of front running is legal. It's legalized front running. It's crazy that it's legal for some people to get advance news on prices and what investors are doing. It's just nuts. Shouldn't happen.

Read that again before you feel hopeful about anything lawyers do:  "It's crazy that it's legal for some people"

...Indeed.

[Bit_Happy]

Any photos of Mark being taken to jail?
What can we do to speed this up?

[clownius]

Any photos of Mark being taken to jail?
What can we do to speed this up?

Provide some evidence hes done something illegal to the police would be a damned good start.  until someone does i doubt hes getting arrested.