Mt. Gox Questioned By Employees For At Least 2 Years Before Crisis 134
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. (Score:5, Insightful)
Now we'll find out something (Score:5, Insightful)
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.
Re:I wouldn't want to be Mark Karpeles at all. (Score:4, Insightful)
If Karpeles was smart enough, he would have been careful to avoid the accounts of Russian Oligarchs etc, and instead simply have stolen money from unconnected, largely unmonied Libertarians who have little to no legal recourse. Since there is no society, these types would have little means of coming back at him.
Re:bitcoin (Score:4, Insightful)
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.
Re:I wouldn't want to be Mark Karpeles at all. (Score:4, Insightful)
With all that money he can get a new identity. He can get plastic surgery to change his looks, and hire excellent security.
Assuming that he did not blow it all as he got it thinking the gravy train would never run out... And based on how things unfolded, I am guessing it went that way.
Pro tip (Score:5, Insightful)
Re:Screw Mt.Gox (Score:0, Insightful)
What do you think happened moron? They took your money and ran leaving you holding the bag. You got fucked and you're on Slashdot asking strangers to tell you comforting lies to make the extreme discomfort of this realization go away. When Mt. Gox fell, the tide went out on all the other exchanges as people withdrew all their coins. Now we're seeing who was swimming naked.
Just like a run on a bank, the first people to make withdrawals got money. Once the coffers were empty, people who were slow on the uptake got left holding the bag.
If you're one of those people, you are probably the type of person that hops from one HYIP to the next, losing their shirt at every turn.
(If you read Rich Dad Poor Dad, lost your shirt on Real Estate/Stock Market in 2007-2008, lost your shirt on precious metals in 2011-2012, and lost your shirt on Crypto-currencies in 2013-2014 I'm probably talking to you. No, Iraqi Dinar will never be worth more than you paid for them, you missed the boat on Dogecoin, and now that KNC Miner is releasing a Scrypt Asic: your Scypt-based altcoins are going to get clobbered as the miners abandon them en masse.)
There are "fish" and "sharks". You are a fish. Do yourself a favor and keep your money in low risk investments like FDIC backed savings accounts.
Weasely sentence in the article (Score:4, Insightful)
"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.