In February of 2014, Mt. Gox, then the largest Bitcoin exchange in the world, was shut down and $500 million worth of Bitcoin and fiat deposits was reported missing. The lost Bitcoins was attributed to a “transaction malleability” error exploited by hackers, but evidence is mounting that there was foul play by company insiders.
This weekend, Mark Karpeles, 30, the founder of Mt. Gox, was arrested by the Tokyo police on suspicion of having embezzled funds from Mt. Gox’s users. The former CEO of Mt. Gox, Ashley Barr, followed up with an Ask Me Anything (AMA) session on Reddit, detailing a history of negligence and corruption behind the scenes.
Barr was appointed by Karpeles as CEO in January of 2012, and immediately did a financial audit of the company. She discovered that the company was spending far more than what it was earning, and she made futile attempts to have Karpeles explain where the money came from.
