APR 23, 2014
Mark Karpeles: Captain of a Tight Ship with a Loose Wallet
The true personality of Mark Karpeles, Chief Executive of the now-defunct Mt. Gox bitcoin exchange, is finally coming into the spotlight.
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The true personality of Mark Karpeles, Chief Executive of the now-defunct Mt. Gox bitcoin exchange, is finally coming into the spotlight. So who was this financial genius under whose leadership Mt. Gox rose to astronomical levels before it lost a reported $500 million in bitcoin? According to Roger Ver, who worked with Karpeles during one of the company’s security breaches: “He wasn’t ever focused on Mt. Gox like he should have been.”
Karpeles acquired Mt. Gox in March 2011 from founder Jeb McCaleb. Within three months after changing hands, Mt Gox’s user base ballooned from 3,000 to 50,000 customers. After Gox’s first hacking attack in June 2011, Karpeles, a self-proclaimed geek, was pressed for answers on how the company would respond. In an online interview, Karpeles moved 424,242 bitcoins, stating “Don’t come after me claiming we have no coins.” The sum was chosen as a nod to the “meaning of life” in the number 42 in Douglas Adams’ sci-fi book The Hitchhikers Guide to the Galaxy.
Eventually, as Mt. Gox grew, they found a headquarters in central Tokyo with thirty employees. Former employees recall the double standard of how Karpeles ran the office, usually not beneficial to the overall practice. Karpeles would supposedly spend thousands of dollars on gadgets, robots, beer steins, and equipment to make the office more “fun.”
However, Karpeles refused to give pay raises, and as times became more strained, he distanced himself from the core of his company. Late last year, during a tumultuous time for the company, employers recall Karpeles spending an entire day installing a hammock in the office.
Even on the corporate side, Karpeles never shared access to data or passwords and was the only one who could access the exchange’s bank accounts and complete requests by traders looking to cash out. As investment companies saw potential in the company, Karpeles simply refused the idea of business growth and focused on less-than-beneficial tech-stuff like a Bitcoin café on the ground floor of their office building. According to one report, “Karpeles was planning to serve quiche and apple pies he'd made himself in the cafe,”
The distance Karpeles created between himself and his employees might not come as a surprise to his mother, Anne Karpeles. In a recent telephone interview, Anne Karpeles revealed that Mark had a troubled childhood moving from school to school without a father. She claims she did not know Karpeles was boss of Mt. Gox and had to “look it up on Wikipedia.” Furthermore, Karpeles never told his mother he was married until after he and his wife had their first son.
While Mark Kerpeles’ character comes to light, most people aren’t surprised at his inadequacies as chief of the largest bitcoin exchange market. Pantelis Roussakis, President of Australian Bitcoin Association, lost a substantial amount of money in Mt. Gox. In an interview he gave the Coin Telegraph earlier this month, Roussakis bluntly summed up their downfall: “[T]he reason why Mt. Gox went down is because they were geeks and not accountants that were running it.” As quirky as Karpeles seems to be, the future of Bitcoin will need more number-crunchers and business-oriented players, not hammocks.