The Mt. Gox hack once shocked the crypto world! The former CEO is now very low-profile, developing AI and privacy tools in Japan

From the collapse of Mt Gox to fading from the market, Mark Karpelès has shifted his focus to verifiable privacy and AI tool development, reflecting on the concentration of power and governance failures in the crypto industry from an engineer’s perspective.

From the core of Bitcoin transactions to the storm center, the rise and fall of Mt Gox

15 years ago, Mark Karpelès unexpectedly rose to the center of power in the Bitcoin world. In 2011, he took over Mt Gox from Jed McCaleb. During the early experimental stage of Bitcoin, this exchange handled the vast majority of global Bitcoin transactions, becoming the gateway for countless people entering the crypto world.

However, Mt Gox’s infrastructure and code quality had long-standing issues. Karpelès stated that between the acquisition and gaining actual control of the servers, approximately 80,000 Bitcoins were stolen but not disclosed publicly. In 2014, the exchange ultimately collapsed due to a hacker intrusion and asset loss, with over 650,000 Bitcoins missing, shocking the entire industry and plunging Karpelès into years of legal and public scrutiny.

Investigation, detention, and trial: a long downturn in Japan’s judicial system

After the Mt Gox incident, Karpelès was arrested in Japan in 2015 and detained for nearly a year. He recalls that Japanese police repeatedly used extensions and re-prosecution tactics, causing detainees to believe they would be released only to be taken back again, creating immense psychological pressure. He was later transferred to Tokyo Detention House, where he was held in solitary confinement for a long period, sharing a cell environment with death row inmates.

Eventually, Karpelès successfully proved through extensive account data and calculations that he was not involved in embezzling customer funds, and was only sentenced for lighter charges related to account records. Meanwhile, there has been long-standing speculation that he amassed a fortune due to Bitcoin’s rising price, which he has repeatedly denied, emphasizing that Mt Gox’s bankruptcy was handled through civil reorganization, with assets returned to creditors, and he did not profit from it.

Image source: The Wall Street Journal, Mark Karpelès

Turning behind the scenes, focusing on verifiable privacy and AI automation platforms

After stepping out of the spotlight, Karpelès chose to live a low-profile life in Japan, returning to his engineering roots. He is currently the Chief Protocol Officer at vp.net, involved in developing a VPN service using Intel SGX technology, allowing users to verify the actual code running on servers rather than simply “trust” the operators. Collaborators on this project include early Bitcoin advocate Roger Ver and Andrew Lee, founder of Private Internet Access.

At the same time, he manages a personal cloud platform, shells.com, where he quietly develops an unreleased AI Agent system that enables AI to directly take over an entire virtual computer, install software, manage emails, and even plan payment operations using credit cards. Karpelès describes this as “giving an entire computer to AI,” exploring higher degrees of human-machine collaboration with greater freedom.

Reflecting on the crypto industry, distancing from asset speculation and engineer mentality

Regarding today’s crypto market, Karpelès expressed reservations about ETFs and the high concentration of Bitcoin among large institutions, believing that excessive centralization among a few individuals and institutions diverges from the original ideals of mathematics and decentralization. He also bluntly stated that incidents like FTX expose the risks of failures in traditional accounting systems and governance, rather than flaws in the technology itself.

From once being at the storm center of the Bitcoin world to now focusing on verifiable privacy and AI tool development, Karpelès’ trajectory also reflects the maturation process of the entire industry.

He no longer holds Bitcoin but still accepts Bitcoin payments, choosing to respond to past chaos and controversy through engineering and product development, continuing the core belief of early Bitcoin pioneers: “solving problems with technology.”