TL;DR
Former Mt. Gox CEO Mark Karpèlès recounted the exchange’s early failures, the 2014 loss of hundreds of thousands of bitcoins, and his prolonged detention in Japan after the collapse. He now works on verifiable privacy and AI projects in Japan and says he does not personally hold bitcoin.
What happened
Mark Karpèlès, who ran Mt. Gox during Bitcoin’s rapid early growth, has described how longstanding technical weaknesses and a series of thefts culminated in the exchange’s 2014 collapse. He says he inherited problems when he acquired Mt. Gox in 2011, including an earlier loss of about 80,000 bitcoins that occurred between signing and gaining server access. In 2014 more than 650,000 bitcoins were later traced to hacks linked to Alexander Vinnik and the BTC-e exchange; those coins remain unaccounted for. Karpèlès was arrested in August 2015 and spent about eleven and a half months in Japanese custody, including extended solitary confinement and repeated rearrests he describes as damaging to detainees’ mental health. He says he disproved key embezzlement allegations by locating $5 million in previously unreported exchange revenue and ultimately was convicted only on record-falsification charges. By late 2025 he was living in Japan and developing a verifiable VPN and an AI-driven personal cloud project, while stating he owns no bitcoin personally.
Why it matters
- The Mt. Gox episode highlights systemic security and operational risks at early cryptocurrency exchanges and the potential scale of losses when those systems fail.
- Karpèlès’ detention account underscores concerns about prolonged pretrial detention practices and their mental-health impacts in some jurisdictions.
- Efforts to build verifiable infrastructure such as vp.net point to industry interest in technical transparency as a response to trust failures.
- The bankruptcy's shift to civil rehabilitation and the handling of creditor claims illustrate how legal frameworks shape recovery outcomes after major crypto collapses.
Key facts
- Karpèlès began accepting bitcoin payments for his web-hosting business around 2010 after a customer suggested the method.
- He acquired Mt. Gox in 2011; according to him, about 80,000 bitcoins were stolen between signing and gaining server access.
- In 2014 more than 650,000 bitcoins were drained in hacks later linked to Alexander Vinnik and the BTC-e exchange; those coins remain at large.
- Alexander Vinnik pleaded guilty in the U.S. but was returned to Russia in a prisoner exchange, and related evidence was sealed, according to the source.
- Karpèlès was arrested in August 2015 and spent roughly eleven and a half months in Japanese detention, including over six months in solitary confinement on a floor shared with death row inmates.
- He says he disproved embezzlement allegations by uncovering $5 million in unreported Mt. Gox revenue and was ultimately convicted only on record-falsification counts.
- By late 2025 Karpèlès was chief protocol officer at vp.net, a VPN claiming verifiability using Intel SGX, and developing an unreleased AI-driven personal cloud at shells.com.
- He says he owns no bitcoin personally, though his businesses accept cryptocurrency as payment.
- Mt. Gox’s bankruptcy was restructured toward civil rehabilitation, allowing creditors to claim in bitcoin and receive distributions proportional to their claims; creditors are still awaiting payouts.
What to watch next
- The whereabouts and recovery prospects for the roughly 650,000 bitcoins stolen in 2014, which the article says remain at large.
- Progress and public launch details for vp.net’s verifiability features and for shells.com’s AI agent platform (not confirmed in the source).
- Ongoing distributions and outcomes for Mt. Gox creditors under the civil rehabilitation process, and how those payouts evolve over time.
Quick glossary
- Bitcoin: A decentralized digital currency that enables peer-to-peer transactions without a central issuing authority.
- VPN (Virtual Private Network): A service that encrypts internet traffic and routes it through remote servers to enhance privacy and conceal a user’s IP address.
- Solitary confinement: A form of imprisonment where an inmate is isolated from other prisoners for 22–24 hours a day, often restricted in social contact and visitation.
- Civil rehabilitation (bankruptcy context): A legal approach allowing bankrupt entities to restructure and distribute assets to creditors under court supervision, sometimes permitting claims in original asset form.
- Intel SGX: A set of processor security features that create isolated memory regions to run code and protect data from unauthorized access, enabling attestation of running code.
Reader FAQ
Was Mark Karpèlès convicted for embezzlement or theft?
According to the source, he disproved embezzlement charges and was ultimately convicted only on record-falsification counts.
What happened to the bitcoins stolen from Mt. Gox?
The source reports that more than 650,000 bitcoins were stolen in 2014 and that those coins remain at large.
Does Karpèlès still hold bitcoin?
He says he does not personally own any bitcoin, though his companies accept it as payment.
Is vp.net publicly verifiable and available now?
The source describes vp.net as using Intel SGX to let users verify server code but does not confirm current public availability or wider adoption (not confirmed in the source).
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Sources
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