In 1983, David Copperfield made the Statue of Liberty disappear. He seated the audience on a platform, showed the Statue of Liberty, put up a curtain, and slowly rotated the platform while keeping the audience entertained. When the curtain fell, everyone gasped in amazement — it was really gone! David’s trick was bafflingly simple and didn’t involve anything magical, unless we consider gullibility magical. It turns out that gullible people want to believe in magic, and that is especially the case in the crypto community, where there is a deep desire for quick riches, which was used by Mark Karpelès to do enormous harm while disappearing a sizable stock of Bitcoin. Who is Mark Karpelès? He is a French entrepreneur and the former CEO of Mt. Gox, the world's largest Bitcoin exchange, that collapsed in 2014 after losing at least 744,408 Bitcoins through hacks, leading to his arrest by Japanese authorities in 2015 on charges related to data manipulation and embezzlement. In 2019, he was acquitted of most charges but found guilty of illegally altering Mt. Gox’s electronic records to inflate the company’s holdings by $33.5 million. He received a two-and-a-half-year prison sentence that was suspended for 4 years. In 2024, Mark started a new Poland-based crypto exchange called EllipX.
Early Childhood and Employment
June 1, 1985. A baby boy named Mark was born in Chenove, France. He showed passion and talent for programming, developing his first computer program at age 3. He grew up in Dijon, where he spent a lot of time creating small video games to entertain himself and his friends. His curiosity led him to dabble in areas such as chemistry and quantum physics. When his mom took him for an IQ test, he scored above average. In 1992, he moved to Paris to attend a school for gifted children, where he also graduated high school in 2003.

Mark stopped studying after high school and started working as a video game developer for Eurocenter Games and Linux Cyberjours, which were owned by Stephane Porta. After two years, Mark quit his job, but that period will haunt him for years to come, showing who is Mark Karpelès professionally. Stephane will later accuse Mark of unauthorized access and stealing confidential client information, which Mark will address on his blog in a November 2006 post.
First Legal Trouble and Signs of Depression
It turns out that Mark wasn’t as talented in business as he thought. While working for Stephane, he started a site-hosting service called FF.ST on Eurocenter servers, which is still up but now features short video clips. Stephane liked FF.ST and offered to buy it, which Mark priced at €2,000 and asked for bonuses based on income generated in exchange for taking care of the website and the customers. This is where Mark’s mood turned dark, as he mentions bouts of heavy depression and that at one point he almost hung himself out of his window with a network cable. Those brooding, self-destructive moods were most likely why he “somehow lost control” over FF.ST and sent a resignation letter to Stephane, who disconnected the servers, prompting furious customers to lambast Mark, who was their contact for the website.

Mark started a new service, Nezumi, and moved the disgruntled customers to it, but those servers were shut down too and seized thanks to Stephane’s legal action, in which he accused Mark of stealing confidential customer data. In Mark’s version of the story, he did everything according to the contract the two of them had that did not cover the customer data, which implies that even back then Mark had trouble behaving professionally and defining his role in a professional relationship. That is, Mark would let his emotions cloud his professional judgment and jeopardize his career.
Moving to Israel and Back to France
In December 2005, Israelis will have a chance to learn who is Mark Karpelès. Mark traveled to Israel, where the non-competition clause of the FF.ST contract did not apply. He spent a week in Jerusalem and then moved to Ashdod, the fifth largest city. Unfortunately, he arrived when Israel was engaged in military actions, and some of the major cyber startup hubs were bombed, making foreigners shut down their startups and flee. Mark tried to get local customers, but he discovered that they weren’t interested in security or doing business with an outsider at all. As one of my contacts in Israel informs me, the place is difficult to work in because it is filled with “conniving bastards.” When some 200 Israeli websites were hit by a hack, Mark compiled a list of them and contacted their owners, offering his cybersecurity services, but was told that “those websites are just for show” and that they don’t need any security. With dwindling funds, Mark closed up shop and moved back to France.

As soon as he arrived, Mark was struck by more misfortune, first by losing the luggage with his computer equipment for 3 months, and then when Stephane sued him for the hacking of another of his websites, Graal, which is an MMO (massive multiplayer online video game) that draws heavy inspiration from the 1991 SNES classic “The Legend of Zelda: A Link to the Past.” Stephane alleged that Mark had a duty to warn him about exploits on the website but failed to do so, which hackers exploited. In Mark’s opinion, he was not obliged to report to someone who hated his guts, let alone do maintenance for such a person, which again showed his lack of professionalism. By 2009, people in France were already starting to realize who is Mark Karpelès. Mark moved to Japan, where he spent 10 days in 2005 and where he felt like he belonged. In the meantime, he ran two personal blogs, both of which used his alter ego “Magical Tux.” The first blog, with the tagline “a wonderful life in a magical tux,” ran from Jan 2006 to Aug 2007 and detailed his personal life, mostly in French. The second was in English and peppier, with the tagline “geekness brought me to Japan,” and covered his nerdier pursuits, such as his coding exercises. It ran to May 8, 2012, which is right before the Mt. Gox collapse.
Mark in Japan
In Japan, Mark felt like his dreams came true. He finally felt like himself and that he was free to do whatever he wanted in relation to his nerdy pursuits, especially cryptocurrencies, which weren’t regulated at all there. He learned to speak Japanese and did so fluently. In October 2009, Mark founded a company named after his cat, Tibanne, together with his friend Julien Laglasse. In 2010, Stephane’s lawsuit finally came back to haunt him. Mark believed he was innocent and did not appear in court in France, which by default ruled against him and sentenced him to one year in prison and a €45,000 fine for computer fraud. There was no going back at that point, and Mark decided to build a new life and a new career for himself. That same year, people learned even more about who is Mark Karpelès. Meanwhile, he learned about Bitcoin and decided to adopt this strange new payment method. He discovered the work of Jed McCaleb, a programmer who wanted to create an exchange for the collectible card game Magic: The Gathering (MTG) in 2006, launching it for a few months before moving on.
On July 18, 2010, Jed relaunched Mt. Gox but pivoted to trading Bitcoin before selling the platform to Mark Karpelès on March 6, 2011. Mark couldn’t afford to buy it, so he made a strange deal with Jed that will come back to haunt him, just like what happened with Stephane. Mark will take Mt. Gox to global fame but for all the wrong reasons. He treated Mt. Gox as a hobby project and turned it into the world’s largest exchange, for which it was not prepared, putting him in a lot of trouble with the community and the authorities. Mt. Gox became popular around the same time Silk Road started powering the rise of BTC and suffered from many of the same problems for the same reason: underinvestment in security. Mt. Gox was under constant hack attacks even before Mark bought it, and Jed warned Mark that hackers had already stolen some 80,000 BTC. By the time Mark is done with Mt. Gox, it will have lost over 744,000 Bitcoin or 6% of all Bitcoin created up to that point.
The Founding of Mt. Gox
Mt. Gox was founded as an MTG Online eXchange (the capitalized letters spell M-T-G-O-X). The first MTG cards were printed in August 1993, with nine cards from the first three print runs especially desired for their extraordinary power and versatility. One of them is Black Lotus, the most expensive MTG card ever made, the price of which steadily grew until one copy from the first print run, called “Alpha,” was sold in 2024 for $3,000,000. As soon as they played with it, MTG players realized that Black Lotus allowed the breaking of the game’s rules, letting the user instantly win any match in the first turn. The company that designed MTG and was selling the cards, Wizards of the Coast, was dismayed by that and restricted or outright banned Black Lotus in various formats while introducing a slew of rules to prevent lopsided matches that ultimately make people disengage from MTG.

The vast majority of MTG cards will never be worth more than a dollar a piece, but the select few will do a moonshot and potentially be worth tens or hundreds of thousands. Nobody knows the actual value of an MTG card until professional players have had time to play with it and see which rules it can bend or break. In the meantime, MTG speculators buy boxes that have a random mix of MTG cards in hopes of snagging as many cards as possible that will be the next Black Lotus, selling unwanted cards in marketplaces and on exchanges. Valuable MTG cards are like cryptocurrencies — both are speculative assets that allow rule-breaking behavior and prompt an authority to introduce a slew of restrictions and bans to keep the game fair for everyone. In essence, Black Lotus is Bitcoin on paper.
Trading Black Lotus vs. Bitcoin in PHP
The biggest difference between MTG cards and cryptocurrencies is their volatility. MTG cards are paper collectibles that, even if traded virtually, eventually have to have some backing as real-world objects or the exchange is immediately declared a scam. If an MTG card is valuable, it will generate organic demand and steadily increase in value, but there is no way it can increase by 100x in an hour or drop 99% in an instant. Anyone can buy boxes of MTG cards, get the next Black Lotus, and trade it through any outlet, reducing pressure on any given marketplace. Compare that to cryptocurrencies, which generally have extreme volatility and where anything can happen to their price, requiring robust infrastructure that can handle attempts at manipulation. The point is that an exchange made for MTG cards is in no way suitable for trading cryptocurrencies, yet that’s exactly what Mark went with. He made all of Mt. Gox’s code, including its trading engine, himself from scratch and did it in PHP, a notoriously convoluted and vulnerable language that is not for the faint of heart. In one of his blog posts from June 2010, titled “PHP can do anything,” Mark gushed over PHP and wondered if he could code an SSH (Secure Shell, used for secure communications) server by himself. Apparently he did and immediately used it on Mt. Gox without any further testing or safeguards. Combined with the fact that Mt. Gox was the only marketplace for trading Bitcoin at the time, hackers and traders generated an immense pressure on the underlying infrastructure that was bound to crack and collapse.

After the Mt. Gox collapse on February 25, 2014, and the leak of its source code on March 3, 2014, Hacker News commentators pored over it and gave their opinions on Mark’s coding skills. In essence, Mark ignored best practices when writing the code, which means it couldn’t be quickly or automatically tested. Bugs were plenty in the code and they were difficult to find and fix, making Mt. Gox’s code a messy proposition for a college project and an absolute nightmare for a financial institution. Nobody could understand why Mark never hired someone to help him with the code until people discovered the November 6, 2013, article by Wired titled “The Rise and Fall of the World’s Largest Bitcoin Exchange.” It detailed the goings-on at Mt. Gox and stated that Mark called himself an expert in Linux servers, network security, and PHP, which was obviously not true but showed how much he overvalued his skills.
Mark’s Superiority Complex in Business Deals
Another telltale sign of Mark’s superiority complex was a January 30, 2014, audio recording of a business meeting between Mark and his Japanese banking partners from the Mizuho bank that was a part of the leak. The Mizuho representative wanted to cut Mt. Gox off and close its account because the bank got fed up with all the technical issues and uncertainties related to it. At that point, Mt. Gox was processing 200–300 million yen a day from Japanese customers. Mark’s Japanese was pretty good during the conversation, but he made a baffling mistake by using the boastful “ore” to refer to himself in a business setting, offending the Japanese business partner. “Ore” carries a tone of toughness, cockiness, manliness, aggression, and a high(er) status compared to the listener and is used in informal settings, such as in a bar after a few drinks between good friends. But, it is essentially an insult in a Japanese business setting and equivalent to saying in English, “What’s up, bro?” There is an entire system of formal and polite speech in Japan called “keigo,” the learning of which is standard practice in Japan’s business environment. The fact that Mark did not respect keigo means he was careless, clueless, or both, which translated to how he treated his Mt. Gox users as well.

Japanese speakers who translated the recording stated that one person in the conversation, a woman lawyer working for Mark, excused him by saying he isn’t all that good in Japanese, which is why he used “ore,” and that the Japanese business partner did ultimately forgive Mark after an awkward discussion about it. I was at first inclined to believe that Mark made a mistake, but after reading how he behaved at Mt. Gox, I am now convinced he acted like that on purpose, especially since there is no need to refer to oneself when speaking Japanese. Mark had a high opinion of his coding skills, so it’s not a big stretch to see that he also saw himself as superior to others, including his banking partner. The recording of the conversation was most likely made by Mark (the audio even includes the sounds of clothing against the recording device as Mark was moving around) and stored on the same device that hosted Mt. Gox. It was hacked and released by nanashi, meaning “anonymous” in Japanese, who claimed to be a Russian residing in Serbia, and leaked into the public. The existence of the recording implies that Mark was thoroughly paranoid about everything that was going on around him and that he was afraid of being scammed in some way by his business partners after what happened to him with Stephane.
Mark Karpelès Silk Road Theory
In October 2013, a dark web marketplace called Silk Road collapsed in the US. It followed a similar trajectory as Mt. Gox, including how one overconfident guy coded it from scratch and jury-rigged the payment processing functions, which led to the constant loss of funds. In January 2015, Mark Karpelès was implicated in running Silk Road. The Mark Karpelès Silk Road theory stated that Mark was "Dread Pirate Roberts," the operator of Silk Road, because of evidence suggesting that a company associated with him had registered the domain silkroadmarket.org and the belief that he could benefit from the increase in Bitcoin transactions from Silk Road, but Mark denied involvement, and these suspicions did not lead to charges against him. The theory was not used as Ross’ defense, and he was ultimately convicted. The connection was revealed in January 2015 during the Ross Ulbricht trial by a DHS agent Jared DerYeghiayan, who suspected as far back as 2012 that Mark was running Silk Road.

Mark Karpelès Prison Sentence Suspended
In 2015, Mark was arrested and spent 11 months in Japanese custody, during which he was interrogated for 50 days straight, making him consider pleading guilty just to end it. In March 2019, Mark faced multiple charges related to Mt. Gox collapse in a Japanese court. The prosecutor asked for a total of 10 years in prison, and it was expected that Mark would serve time, because the Japanese legal system has a 99.8% conviction rate, but Mark got away easily, making people debate the point of the trial. The Mark Karpelès prison sentence was 2.5 years, but it was suspended, meaning as long as he doesn’t commit any crime in the next 4 years, he won’t have to serve time. He was found guilty of only one count, manipulating data, but acquitted of embezzlement and aggravated breach of trust, which surprised legal analysts.
Where is Mark Karpelès now?
Despite the mayhem he caused with Mt. Gox, Mark hasn’t given up on starting up new businesses, including those that deal with cryptocurrencies. But, people are keeping a close eye on him, seeing how he managed to disappear 6% of all Bitcoin at the time of Mt. Gox collapse, leading to Japan introducing the strictest cryptocurrency regulations on the planet. Where is Mark Karpelès now? He recently launched EllipX, a Poland-based crypto exchange, where he serves as CTO, and claims the platform uses technology that could have prevented Mt. Gox's issues. Mark is working to get licenses in the United States and other jurisdictions, including Japan, and also founded Ungox, a rating agency for cryptocurrency projects that reviews crypto exchanges and projects’ reliability in different fields and aims to prevent another incident similar to Mt. Gox. He is also the minister of technology of Joseon, the world's first cyber nation-state, and has been granted the title “Duke of Joseon.”

PlasBit’s Paradigm-Shifting Approach
People like Mark Karpelès are a source of chaos and destruction in the crypto community. They perform sleights of hand with nonchalance that makes gullible people believe in magical moonshots out of nowhere and without an underlying infrastructure. Those desperate enough to throw their life savings into such projects will learn a painful lesson about trusting magicians with a superiority complex like Mark who can disappear even the largest hoards of riches and then disappear themselves. Yet, those magicians can be recognized from the start because they are unreliable, and they don’t even hide it. Gullible people want to believe that there is magic, that there are shortcuts to success and riches, but there are none. What I learned working with PlasBit is that it’s all hard work and consistency in delivering results. If we all drew inspiration from PlasBit and worked hard on making something consistent, we could change the paradigm in the cryptocurrency ecosystem and create something stable and solid. Mistakes will still happen, but at least we will be ready to own up to them and be honest about what we want, which is a better world for the next generation.