Mark Karpelès: The Man Who Lost 850,000 Bitcoin

On 28 February 2014, Mark Karpelès bowed low at a Tokyo news conference and told the world that Mt. Gox, the bitcoin exchange he owned, had lost almost everything. About 750,000 bitcoin belonging to customers and roughly 100,000 of the company's own were gone. That was around 7% of every bitcoin then in existence, worth close to half a billion dollars at the time.

Karpelès was 28, a French programmer who had moved to Japan in 2009 and found himself running the most important financial business in an industry that barely existed. At its peak in 2013, Mt. Gox handled more than 70% of the world's bitcoin trading. An exchange is the crypto version of a stockbroker: customers deposit money, buy and sell, and leave their holdings with the firm. At Mt. Gox, almost nobody took their coins home.

A card-game site that became a bank

Mt. Gox began as a domain bought by Jed McCaleb for a site to trade Magic: The Gathering cards, hence the name. In July 2010 McCaleb turned it into a bitcoin exchange, and in March 2011 he sold it to Karpelès's company, Tibanne, keeping 12% of the shares. McCaleb went on to co-found Ripple and later Stellar.

Karpelès inherited a small site and watched it become a giant. The cracks showed early. On 19 June 2011, an attacker used a stolen account to dump a huge sell order, briefly knocking the price of bitcoin on Mt. Gox to one cent. In 2013, the US Department of Homeland Security seized about $5 million from the exchange's American bank accounts, alleging its US arm had not registered as a money transmitter. Customers began complaining that their dollar withdrawals took weeks or never arrived.

Inside the company, critics later described a business that leaned on one man. Karpelès wrote much of the code and approved much of the spending. Mt. Gox was also planning a bitcoin cafe in the Tokyo building where it rented its offices.

How 850,000 coins disappeared

The theft was not one event. It was a slow leak. Bitcoin is held in digital wallets, and an exchange keeps part of its customers' coins in a hot wallet, one connected to the internet so withdrawals can be paid quickly, like the cash drawer in a bank branch. If someone has the keys to that drawer, they can empty it a little at a time.

According to charges unsealed by the US Justice Department in June 2023, two Russian nationals, Alexey Bilyuchenko and Aleksandr Verner, and unnamed co-conspirators broke into a Mt. Gox server in Japan around September 2011. Prosecutors allege they drained the exchange from then until at least May 2014 and laundered about 647,000 bitcoin, partly through BTC-e, a Russian-run exchange that Bilyuchenko is separately accused of operating with Alexander Vinnik. Both men are charged, not convicted, and are not in US custody.

Mt. Gox's own records did not catch the losses for years. On 7 February 2014 it stopped all bitcoin withdrawals, blaming a technical flaw. On 24 February trading stopped and the website went blank. Four days later came the bankruptcy filing and the bow.

Then, on 20 March 2014, Mt. Gox said it had found 199,999.99 bitcoin in an old wallet format it had stopped using in 2011. The missing total fell from 850,000 to about 650,000. In April the company gave up on rescuing the business and asked the court to liquidate it. About 127,000 creditors were left holding claims.

Arrest, a year in custody, one conviction

Tokyo police arrested Karpelès at his apartment on 1 August 2015. Prosecutors accused him of manipulating the exchange's data to inflate its balances and of embezzling customer money. He spent about eleven and a half months in custody, including more than six months in solitary confinement at the Tokyo Detention House, before being released on bail of 10 million yen (about $95,000) in July 2016.

Japanese criminal trials end in conviction more than 99% of the time. Prosecutors asked for ten years. On 15 March 2019, the Tokyo District Court acquitted Karpelès of embezzlement and breach of trust, and convicted him on one count of falsifying electronic records, which the court found had inflated Mt. Gox's holdings by about $33.5 million. He received 30 months in prison, suspended for four years, meaning he would serve no time if he stayed out of trouble. The court said he had caused massive harm to the trust of his users. The Tokyo High Court rejected his appeal in June 2020.

In an interview with Bitcoin Magazine published in December 2025, Karpelès said he had gone through about 20,000 pages of accounting records to rebuild the exchange's books for his defence. He also said he owns no bitcoin personally and receives nothing from what is left of Mt. Gox.

The longest wait in crypto

The collapse turned into a ten-year bankruptcy that ended up favouring the victims in an odd way. Japanese law normally converts claims into yen at the value on the day of bankruptcy, when bitcoin traded for a few hundred dollars. In 2018 the court moved the case back from bankruptcy into civil rehabilitation, a restructuring process that let creditors be repaid partly in bitcoin. The trustee, Tokyo lawyer Nobuaki Kobayashi, held about 142,000 bitcoin, 143,000 Bitcoin Cash and 69 billion yen to share out. Creditors approved the plan in October 2021 and the court confirmed it on 16 November 2021.

Payments began in July 2024, through exchanges including Kraken and Bitstamp, when one bitcoin was worth well over $50,000. By March 2025 the trustee had repaid more than 19,500 creditors. The deadline for the remaining payments has been pushed back three times: from October 2023, to October 2024, to October 2025, and now to 31 October 2026. As of 30 September 2026, wallets linked to the estate still held about 34,388 bitcoin, according to Arkham Intelligence data, worth roughly $2.9 billion. As of mid-October no further extension had been announced, though the plan also provides for a final payment once disputed claims are settled.

Back in business

Karpelès stayed in Japan and in technology. In 2018 he became chief technology officer of London Trust Media, the company behind the Private Internet Access VPN, hired by its founder Andrew Lee. In June 2025 he was named as part of the team behind vp.net, a privacy service chaired by Lee, alongside Roger Ver, the early bitcoin promoter known as Bitcoin Jesus. Karpelès is its chief protocol officer.

In February 2026 he went further. He posted a draft proposal on GitHub for a hard fork, a change to bitcoin's rules that every computer on the network would have to adopt, to unlock 79,956 bitcoin sitting untouched since 2011 at an address linked to the first Mt. Gox theft. Under his draft, those coins could be moved by the Mt. Gox recovery address and returned to creditors through the court process. At the time they were worth more than $5.2 billion. Karpelès called it a way to start a discussion. Many bitcoin users see changing the rules to move someone's coins, even stolen ones, as the one thing the network must never do, and the proposal has not been adopted.