7 ms·

I am Mt. Gox's first employee – AMA

189 points by dmichulke 11y ago

patio11 11y ago
Notable tidbits (most of which were already public record if you followed the story very closely) include: + Mt. Gox commingled depositor and corporate funds. (Corroborated in the Japanese version of their docs released by the bankruptcy trustee.) Many in the community believed that they had promised not to do this (true) and they this was impressively unprincipled (I lean against this understanding). + Mt. Gox had standards of engineering professionalism which were not what one would hope would prevail at a financial institution with $500 million in assets. True and previously reported. Specific examples include lack of a staging environment, source control, testing procedure, engineering leadership, auditing... it goes on. Also might suggest in future not putting all code into MySQL. + At one point all BTC deposited at Gox were accessible by VNCing into a particular box, which suggests that claims that Gox had cold storage secured by keys kept in diverse physical locations were not consistent with conventional interpretations of engineering reality. (The new information here is "VNC." It was previously known that at one instant in time Gox proved its reserves by moving all it's BTC in a single transaction. This could be done in a way consistent with what the community thinks "cold storage" should mean; the VNC bit militates against that understanding.) + Employees of Mt. Gox believed, on the basic of public evidence, that the firm was losing money even at the peak. (I'd be interested in seeing their math for this; that was not the conclusion I reached in a napkin calculation in mid-2013.) + Wages at Tibbanne (which provided 100% of employees for Gox) were consistent with prevailing wages in Tokyo startups i.e. scandalously low. 50% of employees earned less than $2k per month; director-level salaries in order of $4k, except for... + ... explicitly alleged looting of customer funds to support director lifestyles. + Management was unable or unwilling to answer basic queries regarding finances internally. + Gox's bus number was one, and that bus would have resulted in $500 million being unrecoverablu lost. Management, when asked about this, lied brazenly. (Last part is new info, first part obvious.) There's more at the link.
- oxide 11y ago
  thanks for the highlights, I don't have time to dig through this properly at the moment and I haven't been following the story all that closely.
  - patio11 11y ago
    You have made better life choices than I have.
    - toomuchtodo 11y ago
      While you jest, I can appreciate your interest in the topic and ongoing saga.
- toomuchtodo 11y ago
  Thanks for a detailed recap!
- deleted 11y ago
  [deleted]
  - schneidmaster 11y ago
    That's what patio11 meant by the last bullet point ("Gox's bus number was one...").
- astrange 11y ago
  > + Wages at Tibbanne (which provided 100% of employees for Gox) were consistent with prevailing wages in Tokyo startups i.e. scandalously low. 50% of employees earned less than $2k per month; director-level salaries in order of $4k, except for... I've been told that employees at a certain like-deviantart-but-good startup are paid about as much as a convenience store worker. On the other hand, the conbini won't sponsor your visa.
  - TazeTSchnitzel 11y ago
terhechte 11y ago
"The entire codebase was stored in a database, only accessible via a client Mark maintained, with no version control nor lock controls meaning if we both had a file open we could overwrite one another's files and undo work. There was no pre-production environment. Meaning changes were supposedly deployed untested or made straight on production. I was told I could not touch the backend, although they were working on getting access to this via Mark. Although it was taking time because Mark was more busy with his Bitcoin cafe. They said that despite all this, it was still a decent place to work because there was literally no pressure to perform. " Just wow.
- agumonkey 11y ago
  I'm under the impression that MtGox had some actual real life impact, how many important systems are twisted beasts like this.
  - Redoubts 11y ago
    Depends. How many times does a Magic the Gathering Online Exchange attempt to become a real financial institution?
    - ontoillogical 11y ago
      From what I understand it was never a magic the gathering exchange. The original author reused an old domain for the bitcoin exchange afaik.
      - gohrt 11y ago
        That doesn't make the business look any more professionally managed.
  - waterlesscloud 11y ago
    Many, many more than anyone will admit.
jellicle 11y ago
"Around the same time, we learned that Mark only had one bank account, shared with Mt.Gox's customer deposits."
brayton 11y ago
What was the company culture like? We hear about a lot of bad but obviously there had to be some good things going on to work there.
- cma 11y ago
  This isn't the actual AMA, click the link at the top to get to it.
mbell 11y ago
For what it's worth, there doesn't appear to be any proof that this person is whom they claim to be. The question was asked but somewhat suspiciously dodged: https://www.reddit.com/r/Bitcoin/comments/3fe92x/im_ashley_barr_aka_adam_turner_the_first_mtgox/ctnt9rs https://www.reddit.com/r/Bitcoin/comments/3fe92x/im_ashley_b...
- mintplant 11y ago
  /u/MtGox_Adam is the same reddit account as previously used by the Mt.Gox CEO. Of course it's possible the account has been hacked.
sergiotapia 11y ago
Interesting stuff. Sounds like a bunch of kids that had no idea how to handle $500 million dollars. However, the owner did seem to handle things with malice. Why would he share a bank account with all the customers assets - I'm no lawyer but that sounds extremely ilegal and obviously a conscious choice. You're given such a large opportunity and to piss it all away. Yikes.
joshstrange 11y ago
There are other good summaries but here is mine, in no particular order (All is C&P, no editing other than adding in my own commentary in "[]", putting commenters questions in quotes, and adding in "Mark" where "he" and other pronouns were used. Also "..." is a clip): * As far as I know, no one else at Mt.Gox ever had access to the backend of Mt.Gox, nor the cold wallets. At my time there, only Mark had access to the Database. ... Mark said that if he died there would be hints that one of his best friends could follow to find and unlock the cold-wallets. When I asked said friend, he said he had no idea what Mark was talking about. * We then looked at the expenses (eye-witness expenses only [AKA, we collaborated and make a list of things we had seen were purchased for the company] so it's not accurate, but surely less than what was actually spent), and used the trading data to calculate some averages around Mt.Gox's profits. The expenditures far exceeded every model we had for income. [This is in relation to the AMA'er being asked to be CEO of Mt. Gox and what happened when he tried to do due diligence, Mark wouldn't give him access to the books] * Around the same time, we learned that Mark only had one bank account, shared with Mt.Gox's customer deposits. * Mark was receiving a lot of pressure for "proof of solvency". I was behind him when he VNC'd into... somewhere, used the bitcoin otc app to send the money from A-to-B, and then posted about it. [In case you didn't catch that... THERE WAS NO COLD WALLET. ALL of it was hot and on a machine (running in graphical mode of all things...)] * "How likely do You think it is that Mark Karpeles was running the Willy bot?" -- To be honest, before you asked this question I had never considered it wasn't Mark. ... I just know my ex-employee contacted me about with the impression that Mark owned this account, I hadn't questioned it, and it was presented as "Mark is at it again" * I think gross incompetence happened, and Mark tried to cover it up. I don't believe he is outright malicious, but certainly ignorantly-malicious. * [Mark's] salary was the same as mine at that time. ... I started at 240000yen/month (~$3.1K/mo - ~$37K/yr), and was paid 320000yen/month (~$4.1K/mo - ~50K/yr) from about August 2011. I was the highest paid employee (including Mark) when I left the company. * "Where do you think the millions of depositors fiat have gone to?" -- Nooooooo fucking idea. I hope to read about it the same as you do. I want answers. * "Why was Ross Ulbricht's Gox account banned very early on?" -- Honestly, no idea. I know that Mark banned any accounts blatantly linked to SR. Some people emailed that they needed to use their undeposited cash to buy things on SR. If that made it to Mark, he banned it. I think it was safe practice. * "Since this is AMA: How come you chose this particular time to come out with this AMA? Why now and not earlier?" -- I think I mentioned in different comment threads, I had an NDA that prohibited me from talking about Mt.Gox. It's still enforceable, but I think Mark has other things to worry about at the moment... I hope :/ * I stopped believe anything he [Mark] said after a month of working there. * "Reuters reported that expensive toys were being purchased by MtGox/Mark. Do you have any more examples of luxurious spending?" -- He bout a NAO for $5k in August 2011, a Makerbot a little later, and... Ahem, I had to talk him down from buying a Lamborghini as his first car. Respectively, the Honda civic was a modest purchase. (how to fuck could I explain a Lamborghini to 50% of the employees making under $2000 a month... it would have killed moral, even moreso * "I find it incredibly irresponsible that no employee or ex-employee blew the whistle on what was going on." -- There was no proof, no one (mark) gave anyone access to anything directly. Everything was inferred. (Spent 900K, made x00K?) where did that come from? No answers... what can you report on that ... :/ It sucked.... * "Do you think Mark is guilty of actually manipulating data in a fraudulent manner, or merely negligence in operating MtGox?" -- Both. but only the latter do I have an experience.
dgfv1 11y ago
https://www.reddit.com/r/Bitcoin/comments/3fe92x/im_ashley_barr_aka_adam_turner_the_first_mtgox/ctnyhxb https://www.reddit.com/r/Bitcoin/comments/3fe92x/im_ashley_b... >The entire codebase was stored in a database, only accessible via a client Mark maintained, with no version control nor lock controls meaning if we both had a file open we could overwrite one another's files and undo work. >>Like, PHP source stored in mysql tables? >PHP, CSS, JavaScript, HTML. Errything. >There was no pre-production environment. Meaning changes were supposedly deployed untested or made straight on production. >I was told I could not touch the backend, although they were working on getting access to this via Mark. WAT
mrebus 11y ago
No offence to his guy but he seems woefully under qualified. A CEO that doesn't have accounting report to him... makes less than 50K/year. Does anyone know what valued he thought he brought to the table?
- michaelt 11y ago
  It sounds like you wouldn't have to bring much to the table, if the main competition was Karpeles.
- rmc 11y ago
  Mark, the founder, asked him to be CEO[1]. An incompetant current CEO, who isn't giving details to someone who he asked to be CEO. [1]: https://www.reddit.com/r/Bitcoin/comments/3fe92x/im_ashley_barr_aka_adam_turner_the_first_mtgox/ctntusz https://www.reddit.com/r/Bitcoin/comments/3fe92x/im_ashley_b...

189 points by dmichulke 11y ago

Notable tidbits (most of which were already public record if you followed the story very closely) include: + Mt. Gox commingled depositor and corporate funds. (Corroborated in the Japanese version of their docs released by the bankruptcy trustee.) Many in the community believed that they had promised not to do this (true) and they this was impressively unprincipled (I lean against this understanding). + Mt. Gox had standards of engineering professionalism which were not what one would hope would prevail at a financial institution with $500 million in assets. True and previously reported. Specific examples include lack of a staging environment, source control, testing procedure, engineering leadership, auditing... it goes on. Also might suggest in future not putting all code into MySQL. + At one point all BTC deposited at Gox were accessible by VNCing into a particular box, which suggests that claims that Gox had cold storage secured by keys kept in diverse physical locations were not consistent with conventional interpretations of engineering reality. (The new information here is "VNC." It was previously known that at one instant in time Gox proved its reserves by moving all it's BTC in a single transaction. This could be done in a way consistent with what the community thinks "cold storage" should mean; the VNC bit militates against that understanding.) + Employees of Mt. Gox believed, on the basic of public evidence, that the firm was losing money even at the peak. (I'd be interested in seeing their math for this; that was not the conclusion I reached in a napkin calculation in mid-2013.) + Wages at Tibbanne (which provided 100% of employees for Gox) were consistent with prevailing wages in Tokyo startups i.e. scandalously low. 50% of employees earned less than $2k per month; director-level salaries in order of $4k, except for... + ... explicitly alleged looting of customer funds to support director lifestyles. + Management was unable or unwilling to answer basic queries regarding finances internally. + Gox's bus number was one, and that bus would have resulted in $500 million being unrecoverablu lost. Management, when asked about this, lied brazenly. (Last part is new info, first part obvious.) There's more at the link.

oxide 11y ago
thanks for the highlights, I don't have time to dig through this properly at the moment and I haven't been following the story all that closely.
- patio11 11y ago
  You have made better life choices than I have.
  - toomuchtodo 11y ago
    While you jest, I can appreciate your interest in the topic and ongoing saga.
toomuchtodo 11y ago
Thanks for a detailed recap!
deleted 11y ago
[deleted]
- schneidmaster 11y ago
  That's what patio11 meant by the last bullet point ("Gox's bus number was one...").
astrange 11y ago
> + Wages at Tibbanne (which provided 100% of employees for Gox) were consistent with prevailing wages in Tokyo startups i.e. scandalously low. 50% of employees earned less than $2k per month; director-level salaries in order of $4k, except for... I've been told that employees at a certain like-deviantart-but-good startup are paid about as much as a convenience store worker. On the other hand, the conbini won't sponsor your visa.
- TazeTSchnitzel 11y ago

terhechte 11y ago

"The entire codebase was stored in a database, only accessible via a client Mark maintained, with no version control nor lock controls meaning if we both had a file open we could overwrite one another's files and undo work. There was no pre-production environment. Meaning changes were supposedly deployed untested or made straight on production. I was told I could not touch the backend, although they were working on getting access to this via Mark. Although it was taking time because Mark was more busy with his Bitcoin cafe. They said that despite all this, it was still a decent place to work because there was literally no pressure to perform. " Just wow.

agumonkey 11y ago
I'm under the impression that MtGox had some actual real life impact, how many important systems are twisted beasts like this.
- Redoubts 11y ago
  Depends. How many times does a Magic the Gathering Online Exchange attempt to become a real financial institution?
  - ontoillogical 11y ago
    From what I understand it was never a magic the gathering exchange. The original author reused an old domain for the bitcoin exchange afaik.
    - gohrt 11y ago
      That doesn't make the business look any more professionally managed.
- waterlesscloud 11y ago
  Many, many more than anyone will admit.

jellicle 11y ago

"Around the same time, we learned that Mark only had one bank account, shared with Mt.Gox's customer deposits."

brayton 11y ago

What was the company culture like? We hear about a lot of bad but obviously there had to be some good things going on to work there.

cma 11y ago
This isn't the actual AMA, click the link at the top to get to it.

mbell 11y ago

For what it's worth, there doesn't appear to be any proof that this person is whom they claim to be. The question was asked but somewhat suspiciously dodged: https://www.reddit.com/r/Bitcoin/comments/3fe92x/im_ashley_barr_aka_adam_turner_the_first_mtgox/ctnt9rs https://www.reddit.com/r/Bitcoin/comments/3fe92x/im_ashley_b...

mintplant 11y ago
/u/MtGox_Adam is the same reddit account as previously used by the Mt.Gox CEO. Of course it's possible the account has been hacked.

sergiotapia 11y ago

Interesting stuff. Sounds like a bunch of kids that had no idea how to handle $500 million dollars. However, the owner did seem to handle things with malice. Why would he share a bank account with all the customers assets - I'm no lawyer but that sounds extremely ilegal and obviously a conscious choice. You're given such a large opportunity and to piss it all away. Yikes.

joshstrange 11y ago

There are other good summaries but here is mine, in no particular order (All is C&P, no editing other than adding in my own commentary in "[]", putting commenters questions in quotes, and adding in "Mark" where "he" and other pronouns were used. Also "..." is a clip): * As far as I know, no one else at Mt.Gox ever had access to the backend of Mt.Gox, nor the cold wallets. At my time there, only Mark had access to the Database. ... Mark said that if he died there would be hints that one of his best friends could follow to find and unlock the cold-wallets. When I asked said friend, he said he had no idea what Mark was talking about. * We then looked at the expenses (eye-witness expenses only [AKA, we collaborated and make a list of things we had seen were purchased for the company] so it's not accurate, but surely less than what was actually spent), and used the trading data to calculate some averages around Mt.Gox's profits. The expenditures far exceeded every model we had for income. [This is in relation to the AMA'er being asked to be CEO of Mt. Gox and what happened when he tried to do due diligence, Mark wouldn't give him access to the books] * Around the same time, we learned that Mark only had one bank account, shared with Mt.Gox's customer deposits. * Mark was receiving a lot of pressure for "proof of solvency". I was behind him when he VNC'd into... somewhere, used the bitcoin otc app to send the money from A-to-B, and then posted about it. [In case you didn't catch that... THERE WAS NO COLD WALLET. ALL of it was hot and on a machine (running in graphical mode of all things...)] * "How likely do You think it is that Mark Karpeles was running the Willy bot?" -- To be honest, before you asked this question I had never considered it wasn't Mark. ... I just know my ex-employee contacted me about with the impression that Mark owned this account, I hadn't questioned it, and it was presented as "Mark is at it again" * I think gross incompetence happened, and Mark tried to cover it up. I don't believe he is outright malicious, but certainly ignorantly-malicious. * [Mark's] salary was the same as mine at that time. ... I started at 240000yen/month (~$3.1K/mo - ~$37K/yr), and was paid 320000yen/month (~$4.1K/mo - ~50K/yr) from about August 2011. I was the highest paid employee (including Mark) when I left the company. * "Where do you think the millions of depositors fiat have gone to?" -- Nooooooo fucking idea. I hope to read about it the same as you do. I want answers. * "Why was Ross Ulbricht's Gox account banned very early on?" -- Honestly, no idea. I know that Mark banned any accounts blatantly linked to SR. Some people emailed that they needed to use their undeposited cash to buy things on SR. If that made it to Mark, he banned it. I think it was safe practice. * "Since this is AMA: How come you chose this particular time to come out with this AMA? Why now and not earlier?" -- I think I mentioned in different comment threads, I had an NDA that prohibited me from talking about Mt.Gox. It's still enforceable, but I think Mark has other things to worry about at the moment... I hope :/ * I stopped believe anything he [Mark] said after a month of working there. * "Reuters reported that expensive toys were being purchased by MtGox/Mark. Do you have any more examples of luxurious spending?" -- He bout a NAO for $5k in August 2011, a Makerbot a little later, and... Ahem, I had to talk him down from buying a Lamborghini as his first car. Respectively, the Honda civic was a modest purchase. (how to fuck could I explain a Lamborghini to 50% of the employees making under $2000 a month... it would have killed moral, even moreso * "I find it incredibly irresponsible that no employee or ex-employee blew the whistle on what was going on." -- There was no proof, no one (mark) gave anyone access to anything directly. Everything was inferred. (Spent 900K, made x00K?) where did that come from? No answers... what can you report on that ... :/ It sucked.... * "Do you think Mark is guilty of actually manipulating data in a fraudulent manner, or merely negligence in operating MtGox?" -- Both. but only the latter do I have an experience.

dgfv1 11y ago

https://www.reddit.com/r/Bitcoin/comments/3fe92x/im_ashley_barr_aka_adam_turner_the_first_mtgox/ctnyhxb https://www.reddit.com/r/Bitcoin/comments/3fe92x/im_ashley_b... >The entire codebase was stored in a database, only accessible via a client Mark maintained, with no version control nor lock controls meaning if we both had a file open we could overwrite one another's files and undo work. >>Like, PHP source stored in mysql tables? >PHP, CSS, JavaScript, HTML. Errything. >There was no pre-production environment. Meaning changes were supposedly deployed untested or made straight on production. >I was told I could not touch the backend, although they were working on getting access to this via Mark. WAT

mrebus 11y ago

No offence to his guy but he seems woefully under qualified. A CEO that doesn't have accounting report to him... makes less than 50K/year. Does anyone know what valued he thought he brought to the table?

michaelt 11y ago
It sounds like you wouldn't have to bring much to the table, if the main competition was Karpeles.
rmc 11y ago
Mark, the founder, asked him to be CEO[1]. An incompetant current CEO, who isn't giving details to someone who he asked to be CEO. [1]: https://www.reddit.com/r/Bitcoin/comments/3fe92x/im_ashley_barr_aka_adam_turner_the_first_mtgox/ctntusz https://www.reddit.com/r/Bitcoin/comments/3fe92x/im_ashley_b...