Mt. Gox’s Karpeles Compares Himself to FTX’s Bankman-Fried — Will SBF also Get Off?
Will FTX's SBF manage to clear his name in upcoming trials? A Mt. Gox story to reflect upon.
Key Takeaways
- Mt. Gox Founder Mark Karpelès saved all the documents he needed to be acquitted on a calculator.
- Prosecutors were proven wrong in their embezzlement claims.
- Karpelès was not given internet access while in prison, much like FTX’s Sam Bankman-Fried.
Mark Karpelès, founder and CEO of Mt. Gox, a former Bitcoin exchange based in Shibuya, Tokyo, Japan, shared his arrest story on Twitter, drawing comparisons with FTX head, Sam Bankman-Fried.
Karpelès explained in length how he used a conventional calculator to store documents that would eventually lead to his release and clearing of all embezzlement/breach of trust charges.
Mt. Gox launched in 2010 and quickly took over the Bitcoin transfer market, taking up nearly 70% of the Bitcoin transfer activity worldwide by 2014.
The exchange was quickly shut down later that year after it was allegedly involved in the theft and embezzlement of hundreds of thousands of crypto tokens.
Eventually, the exchange “found” the missing tokens and proceeded with the liquidation process.
Karpelès’ Calculator Skills
“When I was arrested back in 2015, the most computing power I got was a simple calculator (+-*/√). Had 20000 pages of evidence including over 5000 pages of accounting,” reads the start of Karpelès’ story.
This seems to be ins response to the ongoing drama with Bankman-Fried who is requesting better internet connections and laptop access.
“Calculation I did at the time helped me to earn release under bail and eventually be cleared of all embezzlement & breach of trust charges.”
The Mt. Gox founder then goes on to detail his impressive organizational skills.
“I created a quick 8-page index listing all the documents found in there by an ID I created at the time, including the number of pages, who made the document, and which folder it was in.”
According to Karpelès, his arrest was based on the fact that the government only found his company to have made $12 million in earnings and that he had spent $15 million. Hence, the government immediately accused him of foul play.
“I’d spend the next couple of months going through the accounting information provided by the prosecution, found some missing profits that weren’t properly accounted for, went through the company’s bank account records which were thankfully also part of the evidence documents and managed to find some 5.5 million USD worth of revenue that wasn’t accounted for.”
Eventually, Karpelès managed to convince the court to force the prosecution to drop the charges against him based on the numbers he crunched on a 120$ calculator.
FTX Vibes?
It would be remiss not to make the comparison with FTX, the recently collapsed crypto institute created by Sam Bankman-Fried.
Both founders were accused of embezzlement. Both of their companies somehow lost countless crypto tokens, which led to the loss of wealth of countless customers. Both founders were not given “adequate” internet access during their prison time.
SBF is currently facing thirteen federal charges filed by the US Department of Justice, including defrauding the US government.
The FTX founder awaits trial for eight charges on October 2nd. As for the five other charges, District Judge Lewis Kaplan scheduled another trial on March 11th, 2024.
Whether SBF will manage to pull off a Karpelès-esque escape trick is yet to be seen. However, charges against him are not limited to FTX’s failure, but also include bribing a foreign government official.
