Former Mt. Gox CEO Questions Bitcoins Evolution

In a recent wide-ranging chat on Reddit, the former CEO of Mt. Gox, the world’s biggest cryptocurrency exchange until its crash in 2014, revealed that he did not think bitcoin would evolve from its current problems in the near future. “The technology is definitely here to stay, but Bitcoin may have trouble evolving and keeping up,” said Mark Karpeles. Even as bitcoin has come under sharp criticism from governments and industry leaders, blockchain - the technology underpinning bitcoin - has been embraced by them.

Karpeles: "Bitcoin may have trouble evolving and keeping up"

Karpeles hedged the assessment by saying that he could “be wrong about this.” “I’ve been wrong about a lot of things,” he said. According to him, the other major cryptocurrency, ethereum, is too "untested" to currently make a difference in the financial ecosystem. (See also: Mt. Gox).

Tokyo-based Mt. Gox was responsible for approximately between 70% to 80% of all crypto trades during its heyday back in 2013. It declared bankruptcy in 2014 after reporting a loss of 850,000 bitcoins and $28 million in cash from its Japanese bank accounts. Karpeles himself was indicted for transferring $3 million from a Mt. Gox account to his personal account in 2013. He has pled not guilty to the charge and remains on trial in Japan.

Mt. Gox resurfaced in the news recently after it was revealed that a former trustee of the exchange had sold $400 million worth of bitcoin in December and January. Bitcoin’s price, which rallied to new records last December, has been stuck in a slump since January. Market observers have pinned the blame on sell-offs by investors. 

During the chat, Karpeles said he doesn’t own any bitcoin. But he is also pushing other trustees to hold on to their stakes because a sale could put pressure on bitcoin’s price. In fact, he came out in favor of returning bitcoin to creditors. According to him, Mt. Gox owes money to approximately 24750 creditors.

Karpeles said he lost 77lbs during the four months he spent in a Japanese prison. “Lunch was actually two breads with jam (strawberry, orange, etc. so there’d be some variation day to day) and a small extra,” he said, adding that he would eventually write about his time in prison. 

Investing in cryptocurrencies and other Initial Coin Offerings ("ICOs") is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or other ICOs. Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author owns 0.01 bitcoin.

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