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Mt. Gox Questioned By Employees For At Least 2 Years Before Crisis 134

Posted by samzenpus
from the I'm-not-sure-about-this dept.
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."
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Mt. Gox Questioned By Employees For At Least 2 Years Before Crisis

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  • 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.
    • 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.

      • by caluml (551744)

        And how do you know where anonymous money has come from?

        • by exomondo (1725132)
          Why would it matter where it came from? The only thing that matters is who it belongs to, which is obviously the account holder.
      • Re: (Score:2, Troll)

        by khallow (566160)

        and instead simply have stolen money from unconnected, largely unmonied Libertarians

        Stealing money from the "unmonied"? I see a huge, gaping flaw in your plan. Might as well steal half a billion from your pet cat. I'm sure he's good for it.

        As was already noted, the problem isn't stealing from monied or unmonied, it's stealing from people with access to illegal recourse. Those people have means for getting back which are worse than anything "monied" people can do legally.

        Since there is no society, these types would have little means of coming back at him.

        And of course, we have to finish with a two minute hate. Libertarianism is basically about minimal government necessar

        • > Libertarianism is basically about minimal government necessary for society not minimal society. But I guess you don't care.

          Or, not understand, and think your comment makes no sense. To these people, society IS government. When they say "we should help people who need it", that in no way suggests that they would EVER consider buying diapers and milk for the struggling young mother in line behind them. To them, "we" means "Washington", so "we should help" means "Washington power brokers should take y

          • by khallow (566160)

            Or, not understand, and think your comment makes no sense.

            I have to agree. You don't seem to understand. Maybe you should fix that before doing that straw man thing again.

            I guess this is the same sort of thing that is said about any political label. Maybe I should be pleased that people are discussing libertarianism with the same lack of seriousness that they'd give to any other major ideology.

        • by Anonymous Coward

          Libertarianism is about believing "initiation of force" means everything I don't like and that if only the society was different, whatever replace courts would always rule in my favor. Is putting a dam on your land to divert all the water of the river, thus depriving of water other lands "initiation of force"? The libertarian that built the dam will say "no, I do whatever I want on the land I own". The libertarian owning the land that does't receive water will say "the water belongs to me, therefore it is

          • by khallow (566160)
            I see the two minute hate continues. It's amazing all the crazy shit that Emmanuel Goldstein believes.
      • And if you were smart enough, you would have used the subjunctive mood when phrasing a state of unreality.

    • by Anonymous Coward

      What the hell is a "racing version" of a Honda Civic. Isn't a Civic supposed to be an economy car? Why wouldn't he just purchase a car that is built for racing?

      • Not acquainted with the term "rice burner?" Souped up civics have been an institution amongst young Asian men for decades. The aftermarket high performance parts selection for Civics is massive.

      • by perpenso (1613749) on Sunday March 30, 2014 @08:05PM (#46617527)

        What the hell is a "racing version" of a Honda Civic.

        For many, one with underbody LEDs. :-)

        • funny how they talk about this as if it's something special and luxurious.
          seems like your average student or blue collar worker has something like this in their driveway.

      • by gl4ss (559668)

        dunno... a racing version is something they use to race in some gti class or something like that.

        but you know, put in a monkey cage, take out most of the interior, put in a tuned engine and all that stuff.

        (I think you can buy a type-r street gti version in japan anyways)

    • by blackicye (760472)

      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.

      At least he can rest easy knowing that they no longer have bitcoins to hire hitmen with. ;)

  • by Animats (122034) on Sunday March 30, 2014 @04:03PM (#46616313) Homepage

    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.

    • by afgam28 (48611) on Sunday March 30, 2014 @04:20PM (#46616381)

      He imported a Civic, not an Accord. There are two cars called the "Civic Type R", one of which is made in Japan (and also sold in the US) and the other is made in England (and sold in Europe). The former looks like this:

      http://www.allvehicles.co.uk/c... [allvehicles.co.uk]

      The latter looks like this:

      http://upload.wikimedia.org/wi... [wikimedia.org]

      • You think a guy steeling that kind of cash would have gotten something other than a Honda Civic from England. He either has bad taste in cars or he wasn't squandering money quite as lavishly as this article leads you to believe.

        • You think a guy steeling that kind of cash would have gotten something other than a Honda Civic from England. He either has bad taste in cars or he wasn't squandering money quite as lavishly as this article leads you to believe.

          I couldn't agree more. Unless he was really trying to impress a single mother of two in Japan.

        • by Alioth (221270)

          The European version of the Civic (made in the UK) is actually a very fun car to drive, even the low end models have excellent handling and are fun to thrash on a curvy road. I have to imagine the Type R is pretty good fun to drive, and while they might not have the bling factor of a Ferrarri, they have Honda reliability not the cantankerous and impractical nature of an Italian supercar. There are many worse choices he could have made.

    • by houghi (78078)

      Why would Karpeles import a Honda Accord R from the UK to Japan? They're made in Japan.

      Availability?

    • by Alioth (221270)

      Well, the article said it was a Civic. The Honda Civic is made in Swindon (southern UK) and presumably he wanted the version of the Civic that's not manufactured in Japan (the European Civic is vastly different to the US one for instance - might be the same case with the Japanese version).

  • Anyone knows what really happened with CoinEx.pw?

  • Pro tip (Score:5, Insightful)

    by glasshole (3569269) on Sunday March 30, 2014 @04:45PM (#46616497)
    Never ever work for a company where only the CEO has access to the financial records.
    • Yeah, that's a big ol' red flag. Don't work there. Don't put your money/bitcoins there. Don't do business with them. Make sure they never owe you money for any reason.
  • Wrong on many levels (Score:4, Informative)

    by Dan East (318230) on Sunday March 30, 2014 @05:44PM (#46616749) Homepage Journal

    You know things are really screwy when Japanese cars are being imported from Britain to Japan.

    • by Anonymous Coward

      It's a car built in Britain that is exported to Japan.

      http://en.wikipedia.org/wiki/Honda_Civic_Type_R#FN2_chassis_.28European_version.29 [wikipedia.org]

      Production of the current generation of the Civic Type R hot hatch for the European market finished in October 2010.
      Honda’s Swindon plant will continue to build the car for the Australian markets. It is also exported to Japan and marketed as Civic Type-R EURO in limited edition in fall 2010, following a successful run in November 2009.

      The Honda Civic Type R Euro has been a solid hit in Japan. The UK-built hatchback packs 201 horsepower, love-it-or-leave-it styling and a suspension that has been honed on the lunging tarmac of Europe. No, it may not be as fast as its predecessors, but that hasn't stopped Japanese buyers from snapping them up in troves. Honda says that since the car went on sale in November, the company has sold 1,850 units on its home turf.

      This is not unheard of even for GM: Pontiac GTO, Pontiac G8 GXP, Chevy SS were all built in Australia.

    • by AmiMoJo (196126) *

      Many Japanese manufacturers have different models for Europe, Japan and the US. It's a combination of tailoring the product to the local tastes and regulations, building the cars in those markets from parts that are more widely available there, and wanting to prevent too much import/export as currencies fluctuate.

      That last one is a big deal - in the course of about six years the Pound went from being worth 225 yen to 120 yen and now back up to about 170 yen. If you imported a car to the UK back in 2007 for

  • MTGOX charged 1% fees (.5% from both sides of a trade) and had volumes in the 50 million range for many months. They often had earned a profit in the range of 500,000 every month. That should be close to the amount they were spending on all of this junk plus employees. I still do not see where all of the dough went even with the extravagances shown.

    It has also been shown that they did not have large amounts of transaction malleability theft as well. Something else happened. Like the owner keeping the c

  • by Arthur B. (806360) on Monday March 31, 2014 @07:15AM (#46619615)

    "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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