From a distance, the world's largest bitcoin exchange looked like a towering example of renegade entrepreneurism. But on the inside, according to some who were there, Mt.
Gox was a messy combination of poor management, neglect, and raw inexperience. The company, these insiders say, was largely a reflection of its CEO and majority stake holder, Mark Karpeles, a man who was more of a computer coder than a chief executive and yet was sometimes distracted even from his technical duties when they were most needed.
Gox insider, who spoke on condition of anonymity. Last week, after a leaked corporate document said that hackers had raided the Mt.
Gox exchange, Karpeles confirmed that a huge portion of the money controlled by the company was gone. We've caused trouble and inconvenience to many people, and I feel deeply sorry for what has happened," Karpeles said, speaking at a Tokyo press conference called to announce the company's bankruptcy.
This would be the second time the exchange was hacked. Bitcoin promises to give a bank account to anyone with a mobile phone, no ID required. It's clearly an amazing and potentially world-changing technology -- the first viable, decentralized, reliable form of digital cash. It could democratize international finance. But it's also a technology that was pushed forward by a community of people who were unprepared or unwilling to deal with even the basics of everyday business.
A new wave of entrepreneurs may bring the digital currency a new level of respectability, but over its first several years, bitcoin has been driven largely by computer geeks with little experience in the financial world.
The most prominent example is Mark Karpeles. The year-old Karpeles was born in France, but after spending some time in Israel, he settled down in Japan. There he got married, posted cat videos and became a father.
In , he acquired the Mt. Gox exchange in from an American entrepreneur named Jed McCaleb. McCaleb had registered the Mtgox. He never followed through on that idea, but in late , McCaleb decided to repurpose the domain as a bitcoin exchange.
The idea was simple: he'd provide a single place to connect bitcoin buyers and sellers. But soon, McCaleb was getting wires for tens of thousands of dollars and, realizing he was in over his head, he sold the site to Karpeles, an avid programmer, foodie, and bitcoin enthusiast who called himself Magicaltux in online forums. Karpeles soon set about rewriting the site's back-end software, eventually turning it into the world's most popular bitcoin exchange.
A June hack took the site offline for several days, and according to bitcoin enthusiasts Jesse Powell and Roger Ver, who helped the company respond to the hack, Karpeles was strangely nonchalant about the crisis. But he and Mt. Gox eventually made good on their obligations, earning a reputation as honest players in the bitcoin community. Other bitcoin companies had been hacked and lost customer funds.
Most of the time, they simply folded. UK civil servants ponder bitcoin threats - FT. Bitcoin exchange MT. Gox blames surge of interest for bitcoin price drop. US govt clarifies virtual currency regulatory position. European Central Bank warns of virtual currency risks. News in your inbox For Finextra's free daily newsletter, breaking news and flashes and weekly job board.
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Gox introduces account verification 31 May 7. All MT. Gox users who want to deposit and withdraw fiat currencies trading them for bitcoin on the exchange will have to have their accounts verified using a photo ID and document - such as a utility bill - proving legal residence. Actual bitcoin deposits still do not need verification, and neither do withdrawals "at this time".
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