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Mt. Gox CEO Charged With Stealing $2.7 Million
An anonymous reader writes: After being arrested six weeks ago in Japan, Mt. Gox CEO Mark Karpeles has now been formally charged with the theft of $2.66 million worth of clients' money. "Tokyo-based MtGox shuttered last year after admitting 850,000 coins — worth around $480 million at the time, or $387 million at current exchange rates — had disappeared from its digital vaults. The exchange, which once said it handled around 80 percent of global Bitcoin transactions, filed for bankruptcy protection soon after the cyber-money went missing, leaving a trail of angry investors calling for answers." Karpeles still denies doing anything illegal. The case is proving difficult for Japanese authorities to unravel, and they're taking it as slowly as they legally can.
they are digital, you can't steal them
...is good comment
Like we've been saying all along..
"...had disappeared from its digital vaults." the very terminology is misleading. It's just data on disk arrays, and if there's encryption it's decryptable by the owner of the disk array.
The term vault shouldn't be used anyway, unless the "vault" computer is literally air-gapped. We have a vault for storing data for legal purposes, it's a literal interal concrete structure within the building with a reinforced steel door, and only a few people have keys that open it. The only wiring going in there is for lights and fire alarm/smoke detectors. No outlets, no data, no phone. It's not a bank vault, but it would require a degree of commitment to get in there.
Do not look into laser with remaining eye.
What happened with all the MTG cards?! They've got to be worth something!
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he could have applied for a gov bailout and used that to pay himself a bonus.
by TheSpoom (715771) Uncaring Linux user here. I have nothing to add to this but please continue. *munches popcorn*
He spent those bitcoins trying to get laid on Ashley Madison.
The freedom loving butt coin investors loathe government involvement; until of course somebody steal from them at which time they go crying for help.
The Japanese government should just wash its hands of the matter and ignore it as being of no concern.
Without a strong governmental entity to oversee and protect them, they are basically worthless in my book. US dollars are backed by the US Military....
Hopefully someone stabs Mr. Fancy Drink in prison and he bleeds to death slowly.
Yes, I'm still rather mad about the small sum of BTC I lost because of that shitbag.
Hard to have any sympathy for the situation. If you sign up for an currency that is designed to be outside of the world governments, don't come crying to the government that dumb ass idea blew up in your face.
> The case is proving difficult for Japanese authorities to unravel, and they're taking it as slowly as they legally can.
You got it backwards. The japanese authorities just want to give him more time to decide and do what is honourable: buy a tatami, a wakizashi and you know the rest...
Bitcoin conflates two unrelated ideas: a new, non-governmental currency and confidential transfer of digital cash. Why can't we have one without the other - use blockchain technology to anonymously transfer real currencies?
it's called a bonus.
Chewbacon
The Bible is like Wikipedia: written by a bunch of people and verifiable by questionable sources.
What I'm wondering is whether this is actually a difficult investigation, or whether it's actually that the Japanese courts are having trouble deciding what to charge Karpeles with. I don't think there's a single government that has decided what Bitcoin actually is - a currency or personal property. If it's a currency, and it turns out that Karpeles was taking money from his business, that's embezzlement. If it's not, it's theft. There could also be fraud charges thrown in if, as some people suggest, the stolen coins never actually existed and were basically a large-scale accounting error. It seems like the courts would have to first define what Bitcoin is in order to actually charge someone for stealing them.
Karpelés may be bumbling and careless, from what we've read about how the systems were run at MtGox, but he doesn't strike me as a thief.
Cloudflare is effectively a man-in-the-middle, and had effectively full access to MtGox's systems at the time because they employed their services to the fullest to mitigate DDoS attacks, and with the U.S government's hostility towards BitCoin just a couple of years ago, and their effort to "own" Internet services and remove "threats", I think Cloudflare were simply forced to cooperate in going after the biggest fish. Rapid-Share, Mega-Upload etc. have also had to give way for U.S based services, and more stories like this will come.
Japan's criminal justice system is terrible, just terrible.
Crime is very low to start with so police are mostly helpful cop on the corner type or worst case dealing with drunks, gropers, or teen prostitution (but they usually don't bother with that one). There are a very few 'elites' who handle the nasty stuff, and they have an extremely high conviction rate because once they finger you you're going to jail whether you did it or not. Prosecution, defense, and judge all go with that (the detective said so!), so the only thing up for debate, really, is the sentence. There's a grand jury for a few things but they're mostly go along go along too.
And they know nothing at all about technology. There was a thing two (?) years ago where some mother's apartment dwelling otaku freak was cancelling Kurko's Basketball (a popular manga/anime) events left and right for over a year and they couldn't do a damn thing about it. Eventually the freak got so cocky he got careless and did things like using messenger cats. My memory's a little hazy, but it went on seemingly forever and the cops were completely helpless. And they're terrible with corporate crime like this (the handling of the Olympus affair was a disgrace) since usually it's all a matter of what Japanese politicians you have in your pocket - but apparently Mt. Gox didn't have any. Whoops.
I think Karpeles did it, or at least someone close to him at Mt. Gox did it, because it's just entirely too fishy, but I don't think this will prove it.
embezzlement:
The fraudulent appropriation to his own use or benefit of property or money in trusted to him by another
-Black's Law Dictionary
One can embezzle any type of property, including horses, currency, and chocolate. The distinguishing feature of embezzlement is that the culprit as been entrusted with the property. Theft would be if he took the thing from you without your permission. Embezzlement is when you hand him the thing, expecting him to hold it for you, but he uses it for himself.
Embezzlement applies to Mt Gox because people sent their stuff to Mt Gox willingly.
It's paradise. For crooks.
A violent revolution is needed there.
I recall that Japan has a >99% conviction rate, which is pretty unhealthy for a democracy and is comparable to many totalitarian regimes. This probably means that for Karpeles his conviction will be a formality and it's just a question of how many years he's going to get.
For all intensive porpoises your a bunch of rediculous loosers
A violent revolution is needed there.
Well, get started then. If you need any advice, there's a helpful article on it in the latest issue of your favourite magazine!
A rhetorical one, but one you should find out the answer to none the less: What was the repayment rate of the bailout loans?
See it turns out the money wasn't a gift. The government didn't say "here's free money," rather they made loans, acting as the lender of last resort (which is something governments do to stabilize financial systems) but as with any loan, repayment was expected when possible. So go have a look and see what the repayment rate was, I'm not going to ask you to take my word for it, and let us know.
Also, can you point out what law the companies that got bailed out broke?
I recall that Japan has a >99% conviction rate, which is pretty unhealthy for a democracy and is comparable to many totalitarian regimes. This probably means that for Karpeles his conviction will be a formality and it's just a question of how many years he's going to get.
Well, you have to ask *why* the conviction rate is so high before rushing to any judgement. I'm not an expert, but Plea bargaining is not allowed under Japanese law. So they can't use lower level criminals to help obtain evidence for higher level ones. There's no incentive for the low level criminal to cooperate, his sentence is the same no matter what. So they don't cooperate. Weak cases that rely on this sort of criminal cooperation just don't go forward due to lack of evidence.
Even those who arrange and design shrubberies are under considerable economic stress at this period in history.
So first you whine about guberment regulations, and how the free market will solve all the problems, now you go crying that somebody ripped you off and there's nothing you can do about it.
I hope the guy goes free because it will be a good lesson in the unregulated markets.
Japan's criminal justice system is terrible, just terrible.
Crime is very low to start with
Okay, one of us doesn't understand the point of the justice system. If crime is so low the cops rarely deal with serious crime I'd say that it's working EXACTLY as intended and that you have a silly idea of the purpose of any given criminal justice system.
I realize as an American you think the goal is for the cops to put everyone in jail, but that in fact is not the case. The justice system is intended to make crime unappealing so that it is rare. Meaning that they are probably better cops than you're use to.
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The free market has taken care of it!
You mean people used a currency designed to make law enforcement difficult gave their money to someone and it got stolen? I for one am SHOCKED. Just SHOCKED.
And they know nothing at all about technology. There was a thing two (?) years ago where some mother's apartment dwelling otaku freak was cancelling Kurko's Basketball (a popular manga/anime) events left and right for over a year and they couldn't do a damn thing about it. Eventually the freak got so cocky he got careless and did things like using messenger cats. My memory's a little hazy, but it went on seemingly forever and the cops were completely helpless. And they're terrible with corporate crime like this (the handling of the Olympus affair was a disgrace) since usually it's all a matter of what Japanese politicians you have in your pocket - but apparently Mt. Gox didn't have any. Whoops.
I was intrigued by this, so I did a little research. It's a shame you really did not do a very good job here with explaining what happened as your post was interesting and on topic, but yeah, this paragraph could have been a lot better. The "otaku freak" as you call him did not personally cancel anything as your writing seems to claim. What he did was send threatening letters, sometimes with suspicious liquids or powders, to various places that were associated with the anime or its writer in some way and those places canceled many events related to Kuroko's Basketball. As to why he apparently had it in for this particular anime, it gets into sub-genres of anime that I'm not really qualified to talk about it and it seems that maybe he had a problem with the people who were interested in it and focused his rage at the creators and supporters. Apparently popular anime series have "events" of some kind in various places, but I have no idea what goes on there.
Anyway, Japan sounds better to me than some countries I could name where not only is it impossible to lock up anybody for the rest of their life no matter how many people they kill, they actually start to feel sorry for the criminal because he's been locked up.
You're assuming that crime is low BECAUSE of the criminal justice system though. I think that is an unwarranted and erroneous assumption.
I realize as an American you think the goal is for the cops to put everyone *else* in jail, but that in fact is not the case.
FTFY
Japan's criminal justice system is terrible, just terrible.
Crime is very low to start with
Okay, one of us doesn't understand the point of the justice system. If crime is so low the cops rarely deal with serious crime I'd say that it's working EXACTLY as intended and that you have a silly idea of the purpose of any given criminal justice system.
I realize as an American you think the goal is for the cops to put everyone in jail, but that in fact is not the case. The justice system is intended to make crime unappealing so that it is rare. Meaning that they are probably better cops than you're use to.
Actually the justice system is set up to make a profit for the private prison industry, just don't get caught. http://www.nytimes.com/2009/02/13/us/13judge.html?_r=0
I'm not a cryptocurrency expert, so pardon my ignorance, but...
Am I seriously expected to transfer bitcoins from some "hot" wallet to a "cold" wallet and store that in a fucking safe???
I don't have a safe. I don't want to print/tattoo/OCR a wallet. I don't trust them to exist 50 years from now.
I do want to be able to keep as many copies as possible.
You know, like my bank has backups (they do, they're not going to forget anyone's debt, e-v-e-r).
I want a copy on my phone, all laptops, on an RFID card, wearables, on S3 for all I care.
A digital currency where I can't keep digital copies of my wallet?
A cryptocurrency that clearly didn't figure out how to properly encrypt wallets?
Expecting some federal reserve to back this shit up with, e.g., gold is just a hackaround the fact that bitcoin's security model simply does NOT work.
It's the only way to suck whatever value is there into lawyers bank accounts.
This pretty much sums up why the rate is so high.
Consider then that in the US, 90-95% of all criminal cases (state and federal) end up with the defendant pleading guilty, and never even go to trial in the first place. This is in part because of the propensity of prosecutors to threaten to load up the list of charges with a ridiculous number of things, unless you enter a guilty plea, meaning that it's either plead guilty to maybe 1-2 things, or run the risk that you'll end up going to jail for decades or more if you lose.
This is exactly the sort of thing they pulled on Aaron Swartz, and it's ridiculous. (Which isn't to say that a system like Japan's is necessarily better, just that we have our own share of problems here)
I recall that Japan has a >99% conviction rate, which is pretty unhealthy for a democracy
Japan is more or less a one party system with an apathetic population.
It's a democracy in name only.
Japan's criminal justice system is terrible, just terrible.
Crime is very low
Funny - I'd call very low crime rates a roaring success of the criminal justice system.
And how the hell did you get modded up so high by asserting both "CJS is terrible" and "crime is very low"?
I'm a minority race. Save your vitriol for white people.
He mixed up 2 different cases. One is the one you described, and the other is the 'cat' person using a "remote control virus" to taunt the police and got them to arrest the wrong person (whose PC is infected and used to send email remotely). He got caught and confessed eventually I think.
http://www.wired.co.uk/news/ar...
http://www.japancrush.com/2012...
While I think the OP is engaging in unnecessary hyperbole, the low crime rate in Japan is not really related to the criminal justice system.
To give you a good example, I live in Japan and I once forgot to take my change from a drink machine. I noticed it was still there the next day (I often buy coffee from the same drink machine :-) ). For fun, I decided to see how long it would stay there. It was there for 2 weeks. This is a drink machine that was next to the local high school and in heavy daily use. I think the only reason someone took the money was just to help people sort out their correct change from the machine. I ride a bike worth about $1000 every where I go (I don't have a car). I don't even own a bike lock. I haven't locked my front door in 6 years, except when I went on vacation for weeks on end.
It's a different culture. Even if they could easily get away with breaking the rules, people still follow them. Personally, I think it has to do with the education system and the way children are raised. A super mono-culture has advantages in some ways. When I was working as a teacher, we used to go to the parents' house. If the parents were not doing a good job of raising their children, they would get a lecture. If they didn't improve, they would be required to come to the school for special parenting lessons. If they still didn't improve, sometimes the children would be sent to a special school where they could get extra attention. Imagine what would happen if a school did that in your culture ;-)
There are some obvious problems with the justice system here. If you watch the news and look at the police mug shots of people who have been arrested, an alarming number of them have considerable facial bruising. Beatings during interrogation are said to be common and it appears to be true. The vast majority of convictions are done on the back of confessions. The police admit that sometimes confessions are the result of beatings. You do not have the right to have an attourney present during questioning. In the expat community it is recommended that if you ever need to be questioned by the police, you should ask for a translator (no matter how good your Japanese is). This will give you witness in case anything untoward happens. It is also important to note that you do not have the right to remain silent. It is against the law not to aid the police in their investigations. This includes ratting out your friends. For drug offences, you can actually be charged with the same offence if the police determine that you were witnessed the drug use and did nothing about it (seriously scary).
The English language newspapers in Japan often portray the Japanese police as being corrupt and incompetent. This has led many expats (who follow the English language newspapers) to follow suit. I do not think it is actually true (or at least no more true than in most other countries), but the rules here are starkly different than the rules in most western countries.
Having said that, it is very, very nice to live in a peaceful country where people follow the rules. Personally, it suits me. I'm careful to follow the rules too. The police here are friendly and will go out of their way to help you out with just about anything. I once had an American colleague who punched a police officer. I had to help deal with the situation. Even though the police could easily beat the guy up, lock him up for a few weeks (and charge him for it!) and then deport him, they were actually quite restrained and helpful. I wouldn't recommend trying it yourself, though ;-)