Former Mt. Gox CEO Karpeles Is No Longer a Bitcoin Believer

(Bloomberg) -- The former chief executive officer of the once-largest Bitcoin exchange, Mt. Gox, said he no longer is a Bitcoin believer, and sounded pessimistic about cryptocurrencies in general.

“The technology is definitely here to stay, but Bitcoin may have trouble evolving and keeping up,” Mark Karpeles said Wednesday in a chat on the online message board Reddit. “I could be wrong about this. I've been wrong about a lot of things.”

Blockchain, the technology behind Bitcoin, is a distributed ledger that can be useful in everything from managing supply chains to making cheap international money transfers. Bitcoin slipped to its lowest level so far this year Thursday, and has declined 50 percent since the beginning of the year.

Karpeles, originally from France, said he doesn't own any Bitcoin. He also called Bitcoin's main cryptocurrency rival, Ethereum, “too untested” for any kind of serious use.

Once the world's largest Bitcoin exchange based in Japan, Mt. Gox filed for bankruptcy in 2014 after thousands of Bitcoins belonging to customers were found to be missing. Karpeles, who had been running the exchange since 2011, was arrested by Japanese police in 2015, and spent time in jail. There, he said in the chat, he lost 77 pounds in four months as “lunch was actually two breads with jam.” He is divorced, he said, but “my cat hasn't left me.” He said he participated in the chat on advice of friends.

Karpeles decided to speak after it was revealed, in March, that the Japanese trustee handling the Mt. Gox bankruptcy had already sold some of the company's remaining Bitcoins to reimburse creditors. Because of peculiarities of Japanese law, Karpeles said that as a shareholder he could end up with more than $1 billion after the bankruptcy proceedings are over. In the chat, Karpeles said he hopes to return all that money to the exchange's more than 24,000 creditors.

Karpeles also remains on trial in Tokyo, accused of stealing money for personal use and making false deposits into the firm's account. He has pleaded not guilty.

Karpeles said he hopes to work again as an engineer -- but not necessarily for a cryptocurrency startup. Oh, and if a movie is ever made about the rise and fall of Mt. Gox, he said he'd prefer to be played by the actor Jack Black. “I really love the guy.”

To contact the reporter on this story: Olga Kharif in Portland at okharif@bloomberg.net.

To contact the editors responsible for this story: Crayton Harrison at tharrison5@bloomberg.net, Dave Liedtka at dliedtka@bloomberg.net, Andrew Pollack, Alistair Barr

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