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Let me remind everyone that Karpeles is an established liar and a convicted computer fraudster, and will obviously say or do anything at this point to clear his

Let me remind everyone that Karpeles is an established liar and a convicted computer fraudster, and will obviously say or do anything at this point to clear his own name. http://newslines.org/mt-gox/joins-linux-cyberjoueurs/ http://newslines.org/mt-gox/joins-linux-cyberjoueurs/ http://newslines.org/mt-gox/convicted-of-computer-fraud/ http://newslines.org/mt-gox/convicted-of-computer-fraud/ Again, what ultimately convinced me of Karpeles' character is that he paid his IRC support staff to lie to users. The support staff didn't realize they were being paid to lie, but they were certainly lies. They were being paid to tell users, "Yes, all of your coins are safe and secure" while Karpeles was drafting his Mt. Gox crisis report: http://www.scribd.com/doc/209050732/MtGox-Situation-Crisis-Strategy-Draft http://www.scribd.com/doc/209050732/MtGox-Situation-Crisis-S... Once Mt. Gox was hacked in the aftermath, a log of their trading activity was leaked. In that log, there's evidence of an Mt. Gox trading bot that had been operating for a long time, buying up bitcoins in order to inflate the price. http://willyreport.wordpress.com/2014/05/25/the-willy-report-proof-of-massive-fraudulent-trading-activity-at-mt-gox-and-how-it-has-affected-the-price-of-bitcoin/ http://willyreport.wordpress.com/2014/05/25/the-willy-report... https://news.ycombinator.com/item?id=7796748 https://news.ycombinator.com/item?id=7796748 At this point, I don't think Mt. Gox or Karpeles deserves any further attention, except as a warning that even the largest Bitcoin exchange can fail, which is why you must store your bitcoins in your own secure wallet, not any third party service. EDIT: Also, Mt. Gox lost at most 386 bitcoins to malleability: https://news.ycombinator.com/item?id=7482451 https://news.ycombinator.com/item?id=7482451

guiomie 12y ago
Could he have been inflating the price to recover the loss from the stolen bitcoins ? This way he could have kept the company a float ...
- deleted 12y ago
  [deleted]
- danielweber 12y ago
  But he was short N bitcoins. He should have tried to drive the price down so he could rebuy those N bitcoins.
sparkzilla 12y ago
The complete Mt Gox timeline: http://newslines.org/mt-gox/ http://newslines.org/mt-gox/
- hanley 12y ago
  Wow Newslines is a cool idea, thanks for pointing that out.
  - driverdan 12y ago
    It's just another blogspam site. You can get the same thing out of any blogging platform using tags / categories.
    - sparkzilla 12y ago
      Thank you for your critique, but Newslines is not a blogspam site. Our writers create news summaries about any topic that are compiled into sortable timelines. The objective is to give real understanding of how topics and people develop over time, as in the example of Mt Gox, where our timeline of events is the definitive record of news about the exchange. If you can find a site that does the same then please let me know as I am genuinely interested.
      - driverdan 12y ago
        I understand the site's goals and I'm not saying it's a bad concept. The reason I called it blogspam is because none of it seems to be original content and citations seem to be optional (example[1]). If every post was a link to the primary source with a summary attached it would be much better. As it stands right now it's WordPress with SEO targeted content taken from other sites, the definition of blogspam. 1: http://newslines.org/mt-gox/joins-linux-cyberjoueurs/ http://newslines.org/mt-gox/joins-linux-cyberjoueurs/
        sparkzilla 12y ago
        Hi, All our posts should be sourced to the original. I must have missed adding the source to that post. It's there now. Thanks you for pointing that out.
fchollet 12y ago
I understand the anger coming from those who lost sizeable amounts of coins due to MtGox's mistakes, but with an undergoing police investigation, wouldn't the rational attitude here be to wait for the fog of war to clear up and the investigation results to be announced? Karpeles does not have a serious history of fraud. We don't know yet what happened with MtGox. Wait and see.
- Cyther606 12y ago
  > but with an undergoing police investigation What gave you that idea? There's no police investigation ongoing in Japan, or anywhere else for that matter. Karpeles is looking at Japanese bankruptcy proceedings, he is not facing criminal charges. He was invited to testify in Texas in light of probable criminal wrongdoing, but he turned down the offer. The only major "investigation" of Karpeles is happening on Reddit and HN.
  - strebler 12y ago
    The police investigation is mentioned twice in the interview, i.e. "The police are investigating the case so I won’t be able to say much." There are various new articles about the Tokyo Metropolitan Police and Mt.gox "working together", but it sounds like you are right that the police are not investigating Karpeles.
    - Cyther606 12y ago
      No one has heard anything about a police investigation into embezzlement or fraudulent behavior. Karpeles alludes to the police investigating "physical attacks". Surprise surprise, another excuse.
- Crito 12y ago
  Governments should reserve judgement until a conviction has been secured, but I do not believe that it is reasonable to demand that private individuals do the same. A presumption of innocence is about limiting the circumstances in which governments can restrict the rights of somebody, but it makes little sense outside of courtrooms. Consider: Richard Nixon was never convicted. Does that mean I can't/shouldn't call him a criminal piece of shit?
sirdogealot 12y ago
The willy report was quickly debunked as being FUD. Those bots were just the dark pool bots that larger players paid Mt Gox to buy large amounts of Bitcoin on a drip feed system over time so as not to spook the markets.
- slapresta 12y ago
  > The willy report was quickly debunked as being FUD. Could you expand on this? I'm really interested.
  - ZachPruckowski 12y ago
    The sort of bot he's describing would be designed to mask large purchases and prevent them from sucking all liquidity out of the market temporarily or spiking prices. Let's say I want to buy 500 BTC at $1000 (to make the math easy). I wire Mt Gox half a million bucks, and try to buy up 500 BTC all at once. This moves the market massively because that's a sizable chunk of existing sell orders. To prevent this, I could instead buy a few BTC a minute for the next couple of hours and I wouldn't drastically shock prices or be as notable. Prices would still move upwards (because more demand in the network) but they wouldn't spike. Or Mt Gox could keep a floating reserve, I could pay a free to lock in the price and move the money around internally to Mt Gox, and they replenish that reserve a few BTC at a time (taking on price risk if their reserve is depleted when prices are high, but making profits if they wait to refill that reserve until prices are in a trough). Note that I have no evidence this is the case, I'm just trying to explain what he claimed was the cause.
    - joshu 12y ago
      This kind of stuff certainly happens in the capital markets.
    - sirdogealot 12y ago
      Bingo. Bang on. This is exactly what I meant.
- gwern 12y ago
aragot 12y ago
> paid his irc staff to lie to users Founders, how do you deal with your support teams when you've understood you'd be going bankrupt? I'm sure there are plenty of honest people who would do the right thing; but I guess there are other founders who remain stubbornly optimistic until they're way beyond the failure point. At least because entrepreneurship requires a serious optimism disorder ;)
- stcredzero 12y ago
  serious optimism disorder Acronym?
  - saraid216 12y ago
    Sod off?

guiomie 12y ago

Could he have been inflating the price to recover the loss from the stolen bitcoins ? This way he could have kept the company a float ...

deleted 12y ago
[deleted]
danielweber 12y ago
But he was short N bitcoins. He should have tried to drive the price down so he could rebuy those N bitcoins.

sparkzilla 12y ago

The complete Mt Gox timeline: http://newslines.org/mt-gox/ http://newslines.org/mt-gox/

hanley 12y ago
Wow Newslines is a cool idea, thanks for pointing that out.
- driverdan 12y ago
  It's just another blogspam site. You can get the same thing out of any blogging platform using tags / categories.
  - sparkzilla 12y ago
    Thank you for your critique, but Newslines is not a blogspam site. Our writers create news summaries about any topic that are compiled into sortable timelines. The objective is to give real understanding of how topics and people develop over time, as in the example of Mt Gox, where our timeline of events is the definitive record of news about the exchange. If you can find a site that does the same then please let me know as I am genuinely interested.
    - driverdan 12y ago
      I understand the site's goals and I'm not saying it's a bad concept. The reason I called it blogspam is because none of it seems to be original content and citations seem to be optional (example[1]). If every post was a link to the primary source with a summary attached it would be much better. As it stands right now it's WordPress with SEO targeted content taken from other sites, the definition of blogspam. 1: http://newslines.org/mt-gox/joins-linux-cyberjoueurs/ http://newslines.org/mt-gox/joins-linux-cyberjoueurs/
      - sparkzilla 12y ago
        Hi, All our posts should be sourced to the original. I must have missed adding the source to that post. It's there now. Thanks you for pointing that out.

fchollet 12y ago

I understand the anger coming from those who lost sizeable amounts of coins due to MtGox's mistakes, but with an undergoing police investigation, wouldn't the rational attitude here be to wait for the fog of war to clear up and the investigation results to be announced? Karpeles does not have a serious history of fraud. We don't know yet what happened with MtGox. Wait and see.

Cyther606 12y ago
> but with an undergoing police investigation What gave you that idea? There's no police investigation ongoing in Japan, or anywhere else for that matter. Karpeles is looking at Japanese bankruptcy proceedings, he is not facing criminal charges. He was invited to testify in Texas in light of probable criminal wrongdoing, but he turned down the offer. The only major "investigation" of Karpeles is happening on Reddit and HN.
- strebler 12y ago
  The police investigation is mentioned twice in the interview, i.e. "The police are investigating the case so I won’t be able to say much." There are various new articles about the Tokyo Metropolitan Police and Mt.gox "working together", but it sounds like you are right that the police are not investigating Karpeles.
  - Cyther606 12y ago
    No one has heard anything about a police investigation into embezzlement or fraudulent behavior. Karpeles alludes to the police investigating "physical attacks". Surprise surprise, another excuse.
Crito 12y ago
Governments should reserve judgement until a conviction has been secured, but I do not believe that it is reasonable to demand that private individuals do the same. A presumption of innocence is about limiting the circumstances in which governments can restrict the rights of somebody, but it makes little sense outside of courtrooms. Consider: Richard Nixon was never convicted. Does that mean I can't/shouldn't call him a criminal piece of shit?

sirdogealot 12y ago

The willy report was quickly debunked as being FUD. Those bots were just the dark pool bots that larger players paid Mt Gox to buy large amounts of Bitcoin on a drip feed system over time so as not to spook the markets.

slapresta 12y ago
> The willy report was quickly debunked as being FUD. Could you expand on this? I'm really interested.
- ZachPruckowski 12y ago
  The sort of bot he's describing would be designed to mask large purchases and prevent them from sucking all liquidity out of the market temporarily or spiking prices. Let's say I want to buy 500 BTC at $1000 (to make the math easy). I wire Mt Gox half a million bucks, and try to buy up 500 BTC all at once. This moves the market massively because that's a sizable chunk of existing sell orders. To prevent this, I could instead buy a few BTC a minute for the next couple of hours and I wouldn't drastically shock prices or be as notable. Prices would still move upwards (because more demand in the network) but they wouldn't spike. Or Mt Gox could keep a floating reserve, I could pay a free to lock in the price and move the money around internally to Mt Gox, and they replenish that reserve a few BTC at a time (taking on price risk if their reserve is depleted when prices are high, but making profits if they wait to refill that reserve until prices are in a trough). Note that I have no evidence this is the case, I'm just trying to explain what he claimed was the cause.
  - joshu 12y ago
    This kind of stuff certainly happens in the capital markets.
  - sirdogealot 12y ago
    Bingo. Bang on. This is exactly what I meant.
gwern 12y ago

aragot 12y ago

> paid his irc staff to lie to users Founders, how do you deal with your support teams when you've understood you'd be going bankrupt? I'm sure there are plenty of honest people who would do the right thing; but I guess there are other founders who remain stubbornly optimistic until they're way beyond the failure point. At least because entrepreneurship requires a serious optimism disorder ;)

stcredzero 12y ago
serious optimism disorder Acronym?
- saraid216 12y ago
  Sod off?