

Mt. Gox Files for Bankruptcy Protection - whbk
http://online.wsj.com/article/SB10001424052702303801304579410010379087576.html?mod=WSJ_hp_LEFTWhatsNewsCollection

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sillysaurus3
To bypass the paywall:

TOKYO—A lawyer for Mt. Gox announced at a news conference at the Tokyo
District Court that the embattled bitcoin exchange was filing for bankruptcy
protection and that Mt. Gox had outstanding debt of about ¥6.5 billion ($63.6
million).

The exchange has been under fire from investors since it stopped bitcoin
withdrawals in early February, citing a technical issue that potentially made
fraudulent withdrawals possible.

On Tuesday, Mt. Gox, which at one point handled more than 80% of trades in the
virtual currency, stopped all transactions, dealing the severest blow to the
bitcoin industry yet and raised concerns about a lack of protection for users.
Several Mt. Gox investors say they have little hope of recovering their funds,
with some individual investors saying they had bitcoins valued at hundreds of
thousands of dollars in Mt. Gox.

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MattBearman
This is getting silly, it's getting to the point where I'm going to start
flagging all WSJ submissions on principle. What's the point of posting
something most people can't read?

Luckily google isn't subjected to the paywall -
[http://webcache.googleusercontent.com/search?q=cache:9tSujQL...](http://webcache.googleusercontent.com/search?q=cache:9tSujQLBbHsJ:online.wsj.com/article/SB10001424052702303801304579410010379087576.html+&cd=3&hl=en&ct=clnk&gl=uk)

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sillysaurus3
Should Mark Karpeles go to jail?

It's a question I've asked myself many times over the past couple days.

On one hand, there may be a chilling effect if Karpeles is sent to jail,
because fewer companies may be willing to participate in an area where the
penalty for failure is time behind bars.

On the other hand, it feels very inequitable and unjust that Karpeles made
millions off of MtGox, lost our money and then is free to enjoy life. But this
is a vengeful mindset, and it seems counterproductive.

Is it really just a bad situation with no recourse? Karpeles walks, MtGox
shuts down, and everyone's money is gone. Poof.

The most persuasive argument for jailtime seems to be that if he's not
penalized, then others may attempt to orchestrate similar disasters. Bitcoin
has a very, very small chance at becoming the next gold standard, but it's a
chance nonetheless. Therefore whoever is willing to flaunt the law and steal
>5% of all bitcoins that will ever be created has a very, very small chance at
becoming extremely powerful in the future, and wealthy in the short term.

I don't know. There's probably nothing to be done, and taking away years of a
person's life out of a sense of retribution probably isn't the best answer.

~~~
SwellJoe
I think one should ignore the fact that this was bitcoins (rather than any
other good) being "lost" or "stolen" or whatever it is that happened.

If fraud was committed...i.e., if customers were lied to, if markets were
manipulated in order to continue the deception, if money from new customers
was used to shore up the illusion that the money from old customers was still
around, etc. that's fraud, regardless of whether it had bitcoin involved or
not (there were also vast sums of USD involved, nobody is making a big deal
out of that). I'm not saying I know that's what happened. I'm saying that it
should not be a question of whether we want bitcoin entrepreneurs to go to
jail. That's not the question here. The question is, did Karpeles and his
company commit fraud?

"The most persuasive argument for jailtime seems to be that if he's not
penalized, then others may attempt to orchestrate similar disasters."

The most persuasive argument, to me, would be "Karpeles committed fraud to the
tune of millions of dollars". If that's what he did, he should go to jail. If
it's an honest loss, and customers were not mislead, and a ponzie scheme
didn't happen, then, yeah, I guess we can talk about what should happen to a
monumentally incompetent business man.

I think it will be interesting to see how much differently a bitcoin "bank" is
treated than a traditional big bank. The banksters committed fraud in the
trillions during the mortgage crisis, and not a one will see jail time...or
much of anything really. Some even still have their jobs and got bonuses.

