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Mt. Gox Questioned By Employees For At Least 2 Years Before Crisis
Rambo Tribble (1273454) writes "Reuters reports that Mt. Gox employees began to question the handling of funds at least two years ago. Although only CEO Mark Karpeles had full access to financial records, a group of a half-dozen employees began to suspect client funds were being diverted to cover operating costs, which included Karpeles' toys, such as a 'racing version of the Honda Civic imported from Britain.' Employees confronted Karpeles in early 2012, only to be given vague assurances with a 'pay no attention to the man behind the curtain' ring. Unfortunately, since Mt. Gox was not regulated as a financial institution under Japanese law, it is unclear what recourse might be gained in pursuing this question."
I wouldn't want to be Mark Karpeles at all. He's going to have annoyed a lot of dodgy characters who want their money back. I think he'll be looking over his shoulder for the rest of of his life.
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Now that ex-employees are talking to the press and the cops, we'll find out what was going on.
The Reuters article makes it clear that Karpeles had exclusive personal control over Mt. Gox's cash. That probably means he'll be the one going to jail. I've been writing for months (ever since Mt. Gox suspended US dollar withdrawals last summer) that Mt. Gox was either incompetent, broke, or crooked. Now it looks like all of the above.
Why would Karpeles import a Honda Accord R from the UK to Japan? They're made in Japan.
i wonder if us customers can sue and use these laws.
Remember, though, the IRS considers Bitcoin "property" not "money".
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...? That isn't what a Ponzi scheme is. That is just fraud.
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i wonder if us customers can sue and use these laws.
Remember, though, the IRS considers Bitcoin "property" not "money".
So sue/press charges on Mt. Gox for loss/theft of property? If bitcoins are property, then an exchange would be like a storage place, or maybe a consignment shop. If you put your physical items in any of those places and then one day the owner says "oops, your stuff is gone, sorry"(especially due to the actions/fault of the owner), you would be able to go after them for the loss of your assets. It should be the same case with bitcoins.
The only thing necessary for evil to triumph is for it to be pitted against a slightly greater evil
Never ever work for a company where only the CEO has access to the financial records.
Technically speaking, bitcoins are not financial instruments. Producing a bitcoin is effectively a gamble. So entirely bitcoin system is a gambling institution. And exchanges act as token brokers. In gambling terms, they are the house. I don't think casinos are treated as financial institutions though. And for anyone actually looking to regulate bitcoins, casinos are probably a better model. People can exchange chips among themselves anonymously. But if they want to exchange them at an "established" location, then they have to do it through a cashier acting as a broker. This is what exchanges are.
Except that they have "accounts" where they hold your money and do whatever they want with it in the meantime. It makes them much more like banks. Of course they go to great lengths to dispel that, since it would mean regulation and oversight.
You know things are really screwy when Japanese cars are being imported from Britain to Japan.
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What the hell is a "racing version" of a Honda Civic.
For many, one with underbody LEDs. :-)
If this was happening two years ago it's more likely he spent them when they were worth a fraction of their current value.
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Read the fucking summary: "a group of a half-dozen employees began to suspect client funds were being diverted to cover operating costs, which included Karpeles' toys"
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The European version of the Civic is actually a completely different car to the US version (you wouldn't recognise it as a Civic if you saw one and only know the US version). Even the low end current gen Civics in Europe have very sharp handling and are a lot of fun to drive. A European Civic with a big engine would be pretty awesome.
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You are making an assumption that a sociopath while willing to steal from clients, would not choose to go so far as to damage the company as a whole. That assumption in turn depends on 2 other assumptions
If Assumption 1 wasn't true he might decide to cut his loses, create some story about hackers stealing stuff and close the company while keeping the stuff he already has.
If assumption 2 was't true, he might damage the company past the point where the theft could be hidden. Sociopath only states that an individual feels no social or moral responsibility for his acts, it says nothing about their technical ability in any given field.
These comments are my personal opinions and do not necessarily reflect the opinions of the other voices in my head.
"It is unclear how Japanese law would treat any such diversion of customer funds as Mt. Gox was not regulated as a financial institution. As a private firm in which Karpeles held an 88 percent stake with no declared debt, Mt. Gox was under no obligation to share any details on its finances."
The lack of regulation means that they cannot prosecute the *lack of disclosure* but the article makes it sound like it implies they cannot prosecute the fund diversion itself. Of course you can, it's embezzlement, there are laws on the book against it, and no you don't need to be "regulated" for these laws to apply.
Financial regulation is something that can make such frauds harder to perpetrate, it's not what makes is illegal. Sheesh.
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