Karpeles: Bitcoin baron brought down with a bump

‘Magic’ -. But his life really changed the day a customer asked if he could pay in bitcoin — a new virtual currency that was just taking its own baby steps.
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Tokyo (AFP)

Once described as a geek who stuffed himself with snacks in front of his computer, Mark Karpeles rose to head a firm that once claimed to handle 80 percent of the world’s bitcoin transactions.

But his lavish Tokyo lifestyle came to an abrupt end when prosecutors charged him with creaming off millions of dollars of customer deposits from his cryptocurrency exchange MtGox.

In many ways, the trajectory of the Frenchman, now 33, mirrors the volatile rise and fall of the bitcoin currency itself.

According to his mother, he had few friends at school, as he was “unable to find a buddy who could talk like he could about IT and quantum physics”.

The “only thing that interested” her “talented” son was computer science, according to his mother, speaking in a 2017 documentary.

Karpeles, whose real first name is Robert, himself admitted to French television that he would spend entire days in front of the computer screen without the slightest bit of physical activity.

Entering the professional world, he quickly found himself at odds with his French company Linux Cyberjoueurs, which found irregularities in its data and pointed the finger at Karpeles.

The firm brought the case to the authorities and in 2010, he received a year’s suspended sentence in absentia in France for “fraudulent access of an automated data processing system” and “fraudulent altering of data”.

But by this time, Karpeles was in Japan, which he had visited several years previously and found the people and culture to his liking.

Once in Japan, he founded his own company, called Tibane — after his cat.

– ‘Magic’ –

But his life really changed the day a customer asked if he could pay in bitcoin — a new virtual currency that was just taking its own baby steps.

The virtual currency appealed to the computer whiz and he began to delve into the technical and IT aspects of the new trend.

By 2011, he had bought his own cryptocurrency exchange MtGox, which stands for “Magic: The Gathering Online eXchange” — referring to a “magic” card-swapping platform beloved by Japanese “otaku” or “geeks”.

This grew rapidly until, at the height of its powers, it claimed to control 80 percent of all global bitcoin transactions.

“He was excited by the money that could be generated on this exchange market,” one of his associates told a television documentary under the cover of anonymity.

And Karpeles enjoyed the trappings — reportedly lodging in an $11,000-per-month luxury pad with a king-sized bed worth tens of thousands of dollars.

He married a Japanese woman and became a father but everything came crashing down in 2014, when MtGox suffered what Karpeles said was a “massive” hack attack and lost around 850,000 bitcoins, worth just under half a billion dollars at that time.

MtGox collapsed and filed for bankruptcy protection. Prosecutors are not pursuing Karpeles for that but for allegedly falsifying data and pilfering around $3 million from customers’ accounts.

He had tried to take the traditional path of bowing deeply and apologising profusely — in Japanese — for the losses.

But this earned him only mockery online and did not deter the authorities.

He was arrested in August 2015 and spent a year in Japanese detention after being re-arrested several times, as is possible under the legal system in Japan.

When he was finally released on bail, he had lost a huge amount of weight and at his first high-profile hearing offered up a clean-cut image.

Since then, Karpeles has been active on social media but has largely avoided commenting on his case in detail as he awaits the court’s verdict, which is expected on Friday.

? 2019 AFP

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Verdict due in MtGox bitcoin embezzlement case

The disappearance left a trail of angry investors, rocked the virtual currency community, and dented confidence in the security of bitcoin. At one point …

TOKYO – The former high-flying head of collapsed bitcoin exchange MtGox will learn his fate Friday as a Tokyo court hands down its verdict on charges of faking digital data and embezzling millions of dollars.

Mark Karpeles, former head of the collapsed bitcoin exchange MtGox, is accused of faking digital data and embezzling millions of dollars

Prosecutors have called for a 10-year jail sentence for French-born Mark Karpeles, 33, who denies the charges.

Karpeles is alleged to have repeatedly manipulated computer data over several years while embezzling a total of 341 million yen ($3 million) of clients’ money deposited at the company.

Prosecutors claim he splashed the embezzled money on a 3D-printing software business unnecessary for MtGox, as well as on personal expenses, including some six million yen ($54,000) for a canopy bed.

He also spent millions of yen on arranging overseas trips for his estranged wife, as well as utility bills and cleaning services at his luxury apartment that he reportedly rented for $11,000 per month, prosecutors allege.

MtGox was shut down in 2014 after 850,000 bitcoins (worth half a billion dollars at that time) disappeared from its virtual vaults, a mystery that remains unsolved.

The disappearance left a trail of angry investors, rocked the virtual currency community, and dented confidence in the security of bitcoin.

At one point, MtGox claimed to be handling around 80 percent of all global bitcoin transactions.

The spectacular failure of the exchange caused a dramatic slump in the value of bitcoin but the cryptocurrency rallied to an all-time high of near $20,000 in December 2017 before dropping off sharply.

It is currently trading at around $3,900.

Japan issued new regulations after the MtGox case, but the exchange Coincheck was forced last year to refund customers more than $440 million in virtual currency that disappeared from its holdings.

During the trial, Karpeles apologised to customers for the company’s bankruptcy but denied both data falsification and embezzlement.

“I swear to God that I am innocent,” Karpeles, speaking in Japanese, told the three-judge panel hearing when his trial opened.

Karpeles has said the bitcoins were lost due to an external “hacking attack” and later claimed he had found some 200,000 coins in a “cold wallet” — a storage device not connected to other computers.

“Most people will not believe what I say. The only solution I have is to actually find the real culprits,” he told reporters after the hearing.

The charges against the former CEO are not directly related to how the MtGox losses came about.

– ‘Significant money losses’ –

Satoshi Mihira, chief attorney at Mizuho Chuo law firm, said: “If it was an outside hacker who stole the currency, it’s a problem. But if he stole even part of the money, it would be embezzlement.”

“His defence counsel needs a high level of evidence to win an innocent verdict,” he told AFP.

“If he’s found guilty, it is possible he will get a jail term considering the significant money losses (suffered by customers),” said the lawyer, an expert on cryptocurrency issues.

The odds are stacked against Karpeles as the vast majority of cases that come to trial in Japan end in a conviction.

The Frenchman was first arrested in August 2015 and, in an echo of another high-profile case against former Nissan chief and compatriot Carlos Ghosn, was re-arrested several times on different charges.

Karpeles eventually won bail in July 2016 — nearly a year after his arrest — reportedly paying 10 million yen to secure his freedom pending a trial, which began in July 2017.

During his time on bail, Karpeles has been active on social media — notably voicing doubts about bitcoin and replying to some media questions about conditions in Japanese detention centres.

However, he has largely avoided commenting on his case in detail.

The court is expected to issue a verdict Friday and, if it finds Karpeles guilty, will likely hand down a sentence at the same time.

However, even if he were to lose the case, he has the right to appeal, which would keep him on bail.

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GXChain Market Capitalization Tops $55.25 Million (CRYPTO:GXC)

Tezos (XTZ) traded up 2.4% against the dollar and now trades at $0.46 or 0.00011733 BTC. Apex (CPX) traded down 1.7% against the dollar and now …

GXChain logoGXChain (CURRENCY:GXC) traded 4.1% higher against the US dollar during the 24 hour period ending at 21:00 PM ET on March 5th. One GXChain coin can currently be bought for $0.92 or 0.00023582 BTC on popular exchanges including Gate.io, DragonEX, QBTC and Bit-Z. GXChain has a total market capitalization of $55.25 million and approximately $8.96 million worth of GXChain was traded on exchanges in the last day. During the last seven days, GXChain has traded 39.8% higher against the US dollar.

Here’s how similar cryptocurrencies have performed during the last day:

  • Tezos (XTZ) traded up 2.4% against the dollar and now trades at $0.46 or 0.00011733 BTC.
  • Apex (CPX) traded down 1.7% against the dollar and now trades at $0.0082 or 0.00000209 BTC.
  • Smoke (SMOKE) traded flat against the dollar and now trades at $0.0444 or 0.00001179 BTC.
  • DAPPSTER (DLISK) traded flat against the dollar and now trades at $0.0004 or 0.00000006 BTC.
  • Tezos (Pre-Launch) (XTZ) traded down 16.1% against the dollar and now trades at $3.26 or 0.00049283 BTC.

About GXChain

GXC uses the hashing algorithm. It was first traded on March 4th, 2017. GXChain’s total supply is 99,613,552 coins and its circulating supply is 60,000,000 coins. GXChain’s official Twitter account is @gongxinbao and its Facebook page is accessible here. The official message board for GXChain is forum.gxb.io. The Reddit community for GXChain is /r/gxs and the currency’s Github account can be viewed here. The official website for GXChain is gxs.gxb.io/en.

Buying and Selling GXChain

GXChain can be traded on the following cryptocurrency exchanges: QBTC, DragonEX, OTCBTC, Binance, Huobi, Gate.io, Bit-Z and BigONE. It is usually not possible to buy alternative cryptocurrencies such as GXChain directly using U.S. dollars. Investors seeking to trade GXChain should first buy Bitcoin or Ethereum using an exchange that deals in U.S. dollars such as Changelly, Gemini or Coinbase. Investors can then use their newly-acquired Bitcoin or Ethereum to buy GXChain using one of the exchanges listed above.

Receive News & Ratings for GXChain Daily – Enter your email address below to receive a concise daily summary of the latest news and analysts’ ratings for GXChain and related companies with MarketBeat.com’s FREE daily email newsletter.

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Dash Among Top-3 Performing Cryptocurrencies After Initial Exchange Listing

Ethereum jump-started the smart contract space and popularized the tokenization of assets and crowdfunding. Dash brought advanced privacy to the …

Dash ranks in the top three best-performing cryptocurrencies following their initial listing on exchanges.

According to U.Today, exchange pricing data pulled from DataLight show the top largest gainers from their initial exchange listing price to be, in order, Bitcoin, Ethereum, and Dash. These three grew past their initial listing price by 1.3 million percent, 68,200%, and 39,500%, respectively. More than regular year-on-year growth over time, these statistics reflect the discrepancy between initial exchange valuations and current rates, singling out those who began trading as under-hyped, rather than over-hyped, projects. An additional factor specifically regarding Bitcoin may be the relative underdevelopment of the cryptocurrency exchange world in 2010 when the first trading pairs appeared.

On the lower-performing end of the spectrum lie many newer projects, which may reflect the shorter time window to achieve higher valuations, or, alternatively, a more realistic initial listing price due to a more mature crypto ecosystem and market. Coins like Bitcoin Cash, Bitcoin SV, and IOTA currently reflect valuation decreases, possibly reflecting an over-abundance of hype at the initial trading launch of the project.

Link found between frequent cryptocurrency trading and problem gambling

While many cryptocurrency traders have found an avenue towards realizing significant gains, as in the above examples, there is a dark side to the trading world as well. According to new research from Rutgers University-New Brunswick’s Center for Gambling Studies, a link was discovered between frequent cryptocurrency trading and gambling issues. Over half of regular gamblers were found to have traded in cryptocurrency over the past year, drawing distinct parallels between speculative crypto trading and other risky behaviors. As such, seeing cryptocurrency as a long-term, multi-year investment, rather than a quick flip, has the potential to avoid unhealthy, potentially destructive behavior patterns similar to problem gambling.

Use cases and innovation, rather than pure speculation, drive sustainable growth

The long-term valuation increases represented by the top performers reflected above draw parallels to innovation and practical use. Bitcoin pioneered the entire cryptocurrency space and solved many issues plaguing centralized money and payment networks today. Ethereum jump-started the smart contract space and popularized the tokenization of assets and crowdfunding. Dash brought advanced privacy to the forefront, pioneered instant transactions and governance, and is set to take protocol-level consumer-grade usability into uncharted territory with the release of the Evolution update.

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A Growing Number of Instagram Users in Sweden are Falling Pray to Cryptocurrency Frauds on the …

The seller suggests transfer of funds by using Cryptocurrency exchange companies and provides a DCW or digital cryptocurrency wallet.

Anew wave of cryptocurrency fraud has hit Instagram in Sweden and young Swedeshave become the victims to dubious advertising on the photo-sharing app.High-end brand products such as Lois Vuitton and Gucci are being advertised onInstagram with a price range from 50 to 300 euros. Individuals lured by theprice range are tricked into paying cryptocurrency.

Ontransfer of the fund, the seller vanishes instantly from Instagram and theluxury products not delivered to the buyer. The number of cases filed with theSwedish police about cryptocurrency related online shopping frauds hasincreased in recent time.

Amore recent scheme was revealed by internal sources in Swedish Law Enforcementand Cryptocurrency brokerage platforms, targets young adults below 25 years ofage. The wordings of the displayed content on the Instagram seems to attractthose with migration background. The luxury products are being advertised onInstagram accounts with huge number of followers, surprisingly all the accountsare also relatively new.

Thecustomers usually contact the seller via direct messages. The fraudster thentricks the individual by saying that the regular bank account transfer cannotbe done by giving excuses such as change of bank accounts, inter-countrytransport and breakdown in operations. The customer is also hurried by thetrickster stating that there is long queue of potential buyers because of thediscounted price of the product. The buyer is thus urged to act quickly withoutgiving much thought to the deal.

Theseller suggests transfer of funds by using Cryptocurrency exchange companiesand provides a DCW or digital cryptocurrency wallet. The cryptocurrency walletis comparable to traditional bank account but it has very limited traceability.

Thestrategic analyst at Swedish Police’s Financial Intelligence Unit, MagnusKarlsson said that buyers should first conduct thorough research on the productas well as seller before undertaking any financial transactions. The anonymityoffered by cryptocurrency wallets and irreversibility of the transactionprovides fertile ground for frauds and criminal activity which users must beaware of. He added that finding the perpetrator of the cryptocurrency fraud isa very difficult process owing to the extraordinary untraceability the platformoffers.

Instagramspokesperson stated that they have blocked several accounts suspected ofindulging in online fraud. The spokesperson further added that their team isalways trying to improve its systems to proactively fight against maliciouscontent by detecting and removing whatever violates the community guidelines.

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