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Despite Mt. Gox fiasco, Karpeles still has Bitcoin plans

Tim Hornyak | Nov. 12, 2014
On hindsight, Bitcoin needs physical security measures that are used to protect gold, and could benefit from a kind of central bank established by merchant accepting Bitcoin, says Karpeles.

Mark Karpeles' t-shirt couldn't be more ironic.

"I don't always test my code," it reads, "but when I do, I do it in production."

The former head of Mt. Gox, once the world's biggest Bitcoin exchange, saw his company collapse because its code was exploited by hackers.

A source close to the firm said in March that Mt. Gox's code was "a spaghetti mess," possibly containing vulnerabilities that allowed hackers to pilfer millions of dollars worth of the digital currency. Japanese police are probing that possibility.

Karpeles has kept a low profile since Mt. Gox filed for bankruptcy on Feb. 28 and disclosed that roughly 750,000 customer bitcoins and 100,000 of its own had vanished, apparently stolen by hackers. That amounted to roughly US$474 million based on the valuation of the volatile cryptocurrency at the time of the filing.

But as Mt. Gox undergoes liquidation under the supervision of the Tokyo District Court, Karpeles has recently emerged from the shadows, posting messages on Twitter and answering emails from media. He agreed to talk to IDG News Service on the condition that he would not discuss other than in general terms what happened at the company, the police investigation into it and other litigation involving him. The latest lawsuit was filed last month in Tokyo by three Mt. Gox clients who are each seeking about ¥10 million ($87,000) over lost bitcoins, according to his lawyer.

Karpeles is still leading Mt. Gox's parent company Tibanne, a small IT development firm located in Tokyo's youth mecca of Shibuya. Its office building is no longer the site of protests by Mt. Gox clients who lost their bitcoin and the security guard hired by the landlord is long gone.

Tibanne now has 13 employees and still does Web and server hosting as well as Web and mobile application development. Tibanne's graphics editing software subsidiary Shade3D, meanwhile, has about 10 staff.

"I've been trying to keep Tibanne and Shade3D running well so we can maybe assist with the Mt. Gox bankruptcy," Karpeles said.

He added that contrary to rumor, he hasn't left Japan since February and has had to stay in the country as part of the bankruptcy process. He spends his down time taking care of his aging cat Tibanne (the inspiration for the name of his company) and pursuing his passion for baking apple pies.

Indeed, he's more comfortable discussing where to find the best croissants in Tokyo than what happened at Mt. Gox. In the debacle, he and his staff received death threats. Their landlord, upset with the protesters and journalists outside the office, nearly evicted them. His plans to open a Bitcoin cafe on the property were shelved.


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