Mt. Gox Co-Founder Reflects on Defense Ahead of SBF Trial

Mark Karpelès, one of the co-founders of the failed Tokyo exchange Mt. Gox, says a scientific calculator he bought in jail was sufficient to prepare a defense. His recollection comes after a judge denied Sam Bankman-Fried’s request to leave jail to prepare a defense ahead of his October trial.

The Mt. Gox co-founder said he used a scientific calculator and basic stationery to work on a defense against allegations of embezzlement. He said at the time, the scientific calculator was the preferred tool for accounting-related crimes and helped him to prove the company earned more than it spent.

Karpelès Used a Calculator and Basic Stationery to Prepare Defense

He said he was cleared of all embezzlement charges “thanks to that little calculator” and the work of his defense. Crypto industry veteran Jed McCaleb created the Bitcoin (BTC) exchange Mt. Gox in 2010 and transferred the website to Karpelès in 2011.

“I spent around $120 to buy the best calculator they had… I managed to find some 5.5 million USD worth of revenue that wasn’t accounted for.

“The company made more than what was spent, and using this as a base, my lawyer pushed the prosecution to straighten up their act,” Karpelès said.

Being the largest Bitcoin exchange at the time, Mt. Gox was frequently the target of hackers. In February 2014, it suspended withdrawals after noticing suspicious wallet activity and later announced it lost several hundred thousand BTC.

Mt. Gox co-founder reflects on defense after exchange filed for bankruptcy in 2014.
WSJ records of dwindling volume after the exchange suspended withdrawals | Source: Wall Street Journal

It filed for bankruptcy in a Tokyo District Court and was ordered to liquidate in April 2014. Its estate is currently in the hands of trustee Nobuaki Kobayashi, who intends to start making creditors whole in October.

Find out the best venues to trade Bitcoin here.

Former FTX Boss Denied Pretrial Release to Access Faster Internet

Karpelès discourse comes as the preparation of Sam Bankman-Fried’s defense unfolds in public view. 

The former FTX boss was denied permission for a temporary pretrial release after intimidating two witnesses. Lawyers argued that Bankman-Fried needed better internet speeds to access material needed for his defense.

Learn more about the FTX collapse here.

Prosecutors contended his daily access to laptops and hard drives and his twice-weekly internet access were sufficient. The judge agreed, denying the release request.

Prosecutors charged Bankman-Fried on multiple counts of fraud and campaign finance violations after FTX filed for bankruptcy last year. The former exchange boss will be tried in October.

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