Born in 1985, Mark Kerpeles, also known by his online alias ‘MagicalTux,’ is an American programmer and the former CEO of the now-defunct bitcoin exchange Mt. Gox. Based in Tokyo, Japan, Kerpeles is now the Chief Technology Officer at Tristan Technologies Co., a startup focusing on privacy and security both online and offline. Kerpeles was also previously a member of the Bitcoin Foundation board.
Jed McCaleb launched Mt. Gox in 2010 with the intent of it becoming the largest bitcoin-to-dollar exchange. Kerpeles bought the exchange from McCaleb in 2011. At its peak, the Japan-based exchange handled more than 80 percent of the global trading volume for cryptocurrencies, becoming one of the most popular exchanges in the world.
In June 2011, a hacker initiated a massive sell-off of bitcoin from a compromised user account, leading the price of bitcoin to plummet on the exchange. The hacker also stole details from 60,000 Mt. Gox users.
In March 2013, the bitcoin blockchain temporarily forked, with differing rules upon how transactions could be accepted – this caused Mt. Gox to halt bitcoin deposits.
In May 2013, a business partner, CoinLab, sued the exchange for $75 million for breach of contract. The companies had previously agreed that CoinLab would take over Mt. Gox’s North American customers, but CoinLab alleged that this never materialized. During the same month, the US Department of Homeland Security forced payment processor Dwolla to suspend transactions to and from Mt. Gox’s account.
On February 7th 2014, Mt. Gox stopped all bitcoin withdrawals, claiming an increase in withdrawals was creating technical problems. On February 24th, the exchange suspended all trading and the website went offline. That same week, a document leaked, citing 744,408 BTC was stolen from customers in a hacking incident. 100,000 worth of Mt. Gox’s bitcoin was also missing. Authorities later discovered approximately 200,000 BTC in an old format bitcoin wallet.
On February 23rd, CEO Mark Kerpeles had resigned from the board of the Bitcoin Foundation, and all previous posts from the Mt. Gox twitter account had been deleted.
On February 28th, 2014 Mt. Gox filed for bankruptcy and claimed a debt of $63.6 million in April 2014, it filed for liquidation.’ Attorney Nobuaki Kobayashi was appointed as the exchange’s bankruptcy trustee to administer and dispose of its assets.
In 2015, Kerpeles was arrested twice by Japanese officials, first for allegations that he manipulated volume on Mt. Gox. He was arrested a second time and charged with embezzlement of company funds (roughly $2.6 million) to fund his own personal projects. He was released on bail 10 months later after paying $95,000, while also being prohibited from leaving the country.
In 2019, the Tokyo District Court found Kerpeles guilty of manipulating Mt. Gox data to inflate the exchange’s holdings by $33.5 million. He received a suspended sentence of 2 years and 6 months in prison.
The same year Kerpeles announced that he would focus his attention on IT company Tristan Technologies Co., acting as its chief technology officer. Kerpeles said the company would focus on improving the encryption technology used on the bitcoin blockchain.
Authored by John Metais. Image via CoinDesk.