Mt. Gox founder unwilling to answer inquiries over Bitcoin theft in US

Mt. Gox founder unwilling to answer inquiries over Bitcoin theft in US

Summary: Mt. Gox founder Mark Karpeles is "unwilling" to travel in order to attend a US bankruptcy hearing.

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Credit: Bitcoin via CNET

Mt. Gox founder Mark Karpeles is unwilling to travel to the United States to answer questions concerning the collapse of once-dominant Bitcoin exchange Mt. Gox.

Last month, US Bankruptcy Judge Stacey Jernigan ordered Karpeles to travel from Japan to the US and appear in a Dallas-based bankruptcy court to answer questions for the Chapter 15 bankruptcy protection filed in the country. Mt. Gox previously also filed for, and was granted, bankruptcy protection in Japan.

Jernigan ordered Karpeles to be in Dallas on April 17, but according to sister site CNET, Mt. Gox lawyers said in a filing that the Mt. Gox founder was "not willing to travel to the US."

An additional summons requiring Karpeles to appear in Washington, DC, on Friday, issued by digital currency watchdog the US Department of Treasury's Financial Crimes Enforcement Network "did not specify topics for discussion," according to comments made by Mt. Gox lawyers within the filing. The filing states:

"Mr. Karpeles is now in the process of obtaining counsel to represent him with respect to the FinCEN Subpoena. Until such time as counsel is retained and has an opportunity to 'get up to speed' and advise Mr. Karpeles, he is not willing to travel to the U.S."

The filing also says that Karpeles, who has not been charged with any crimes, will be present for a May 5 deposition in the United States.

Investors knew something was wrong in February, when Mt. Gox suddenly resigned from the Bitcoin Foundation's board and wiped its Twitter feed clean, going completely silent and refusing to answer customer queries in the process — as customer withdrawals were also suspended without warning on Mt. Gox. Before long, Mt. Gox stated it had filed for bankruptcy due to the theft of 850,000 Bitcoin, systematically stolen over several years due to weaknesses in security. However, hackers who investigated the Bitcoin exchange claim that the trading post still controls "stolen" Bitcoin, and the loss of customer funds may have been due to fraud rather than external theft.

It is still unknown whether customer funds will be recovered, but recently the missing Bitcoin amount was reduced from 750,000 BTC belonging to customers and 100,000 BTC belonging to the firm were stolen — worth roughly $495 million in today's trading — to 650,000 BTC in total, as 200,000 was recovered from an old wallet thought to be out of use.

Topics: Tech Industry, Government US, Legal, Security

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9 comments
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  • Fools Gold

    You have to be and idiot to believe in this crap. Another get rich scheme. Next!!
    ilovepie
    • Ignorance is

      Actually, it's only the "fools" who don't understand it, that still talk trash. Those with IQs over 75, who have taken time to understand it, are calling it brilliant. What does that make you?
      ZDBurger
      • It looks brilliant technology wise, but not so brilliant economically.

        Meh, it looks brilliant technology wise, but not so brilliant economically. And yes, my IQ is well above 75 (and above normal, in fact), and yeah I have taken the time to understand it.

        All it makes you is arrogant, I'm afraid.
        CobraA1
      • No matter how you spin it.....

        Bitcoin is still a crap-tastic concept for creating the ideal environment where fools can be separated from their money by scammers and fraudsters.
        thetwonkey
    • So is the stock market

      So I guess you don't "invest" either.
      jessepollard
  • Somebody's looking for a quick trip to the slammer . . .

    USA orders him to show up. Japan orders him to go too. Somebody's looking for a quick trip to the slammer . . .
    CobraA1
  • He might want to obey this order

    It's not like Japan is going to extradite him, but it's almost never a good idea to annoy a US federal judge, to include one with the authority to dismiss one's bankruptcy case, or to even partially lift protection.
    John L. Ries
    • And the very next day...

      ...Mt. Gox' bankruptcy is converted to liquidation. Are these two data related? Perhaps. It's still interesting that Karpeles declined to obey the summons. Is there, perhaps, some fear of criminal prosecution?
      John L. Ries
      • I'm wondering about that more

        If Karpeles really was involved in criminal activity, it would be highly embarrassing to have to invoke the Fifth Amendment in the bankruptcy hearing. It might cause the Justice Department to take a closer look at the case.
        John L. Ries