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  (Source: Tokyo Real-Estate)
Time for a career change? Here's what being Bitcoin's beloved robber baron buys you

After our two part exposé on Bitcoin robber baron Mark Marie Robert Karpelès, the fallen CEO's "MagicalTux" blog was briefly taken over by hackers this weekend, before someone -- perhaps Mr. Karpelès -- shut it down.

I. Mark Karpelès Decides to Stop Sharing After Hack

Fortunately, his accounts of such items as....
  • His secret Apple pie recipe
  • His history of fraud arrests (at least two)
  • Accounts of at least two employers firing him.
  • His fantasies of himself as a superhero
  • His financial problems
  • His 2006 unexecuted plan to commit suicide by hanging himself with a network cable
...are all still very much available.  Just head over to Archive.org and find them all here.  To translate them from French to English, just type:

http://translate.google.com/translate?hl=en&sl=fr&tl=en&u=

...pasting the url of the archive.org link after the "u=".

He subsequently took his Flickr account private:

Flickr

... but you can, of course, enjoy the pictures we have posted as per U.S. Fair Use laws (given the legal/academic relevance of the case, see: TITLE 17 > CHAPTER 1 > § 107).

A quick note before we get started -- Redditors have discovered that apparently Mr. Karpelès owns a trademark on the term "Bitcoin" in Europe (and formerly Australia, but he forgot to renew that one).  So even if Mr. Karpelès goes to jail, unless he is somehow stripped up of the trademark, he "owns" the term Bitcoin -- in Europe, at least.

II. We Have No Bitcoins (Or So We SAY)

But the hack wasn't just a defacement attempt.  An unauthorized blog entry was posted, likely the Russian/Eastern European ring that exploited Mr. Karpelès' servers via his failure to patch his beloved Gentoo Linux.

Magical Tux hacked
Oh look it's another post from Mr. Karpelès.  Wonder if he is going to tell us all how great he is?  Oh, wait, he just got hacked.  Whoops.

In the blog they write:

First and foremost, this is not Mark Karpeles. F**k that b**ch-titted motherf*****.

It’s time that MTGOX got the bitcoin communities wrath instead of Bitcoin Community getting Goxed. This release would have been sooner, but in spirit of responsible disclosure and making sure all of ducks were in a row, it took a few days longer than would have liked to verify the data.

Above you will finding download link and a mirror used without asking from Mark Karpeles very own blog.magicaltux.net.

Included in this download you will find relevant database dumps, csv exports, specialized tools, and some highlighted summaries compiled from data. Keeping in line with fucking Gox alone, no user database dumps have been included.

Repost and share this info before it’s gone. Lots of people, including us, lost money and coins. Upvote this post.

We stole no bitcoins. There were none to steal.

The blog appears to show Mt. Gox has 951,116 Bitcoins -- a fortune worth $611.6M USD at current exchange rates.  Of this, 500,000 is estimated to be customer Bitcoins.

The hackers comment:

That fat f**k has been lying!!

Karpeles Mt. Gox account

Of course the man had a history of lying, according to his former employers.  A discipline letter from 2004 states:

I found it particularly troubling that you would lie [to me] when i asked you about what you were working on and that you [did not stop] your use of this software to chat after several requests for explanation [of your behavior].

If correct, this would be a wild twist as Mt. Gox and Mr. Karpelès claim to be bankrupt, with basically no Bitcoins.

III. Picture Me Rolling

The leak also includes a personal address for Mr. Karpelès.

Karpeles
Hi guys, just off to my Tokyo penthouse.
[Image Source: Mark Karpelès on Flickr; Fair Use clause TITLE 17 > CHAPTER 1 > § 107]

Googling the Meguro Ward, Tokyo property, we found a nice description of it on Houserep-Tokyo.com, and it sounds quite posh:

The luxury high rise residence "La Tour Aobadai" is located in southern Shibuya area, closer to Nakameguro / Ikejiri Ohashi. Just like other "La Tour" series, it has amenities such as "Concierge Service at Reception Desk","Valet Service", "Sky Lounge", "Party Room", "Fitness Room", "Trunk Room", "Garden Lounge", etc. and a great view. Only its location might be inconveniece because the closest station "Ikejiri Ohashi" & "Shinsen" are a kind of mainors (an express trains don't stop at the stations), and the major one "Shibuya" station is 14 min. walk away. However, this La Tour Aobadai especially provides "Shuttle Buss" directly goes to Shibuya station from the building !!

Meguro Ward Karpeles

Rents start at around ¥350,000 (~$3390 USD) per month (so roughly $40,600 USD per year), but that's just a one bedroom flat.  Given Mr. Karpelès feelings of entitlement and insecurity, it seems doubtful that he'd be "slumming it" with such an entry level model.  He's likely inhabiting one of the swankier suites, which go for around ¥500,000 to ¥600,000 ($4,843 to $5,812 USD) per month (so close to $70k USD per year).

La Tour
La Tour Aobadai is a dream home, if you can afford it. [Image Source: RealEstate-Japan]

Oh and parking is ¥42,000 (~$400 USD) a month ($4,800+ USD per year) -- plus, you know, tips for the valet and such.

You'd need to earn -- or steal -- a lot of Bitcoins to afford that kind of high roller living.  But that's chump change if you happen to be the self-ordained "king of Bitcoin."

Here's a video tour of the property:



Here's a view from the CEO's window:


Karpeles view
[Image Source: Mark Karpelès on TwitPic; Fair Use clause TITLE 17 > CHAPTER 1 > § 107]

With all these views, you can almost picture what life might be like as Bitcoin's biggest scammer.  And by the looks of it, life is pretty spectacular.

IV. Pay Me An Extra Fee And You'll Get Your Bitcoins... I Swear*

Even if the allegation that Mr. Karpelès is faking insolvency proves inaccurate, there's the little nagging issue of how he continued to charge customers the equivalent of tens of thousands of dollars in fees even after he clearly had ceased all withdrawals and had no intention of repayment (from Oct. to Jan.)...


Typically Mr. Karpelès charged 0.0001 BTC/kB for Mt. Gox withdrawals.  But after he claimed his exchange ran out of funds, he had the boldness to charge 0.005 BTC/kB, multiplying his fees by a factor of 50.

Karepeles
Even after he claims to have lost all his customer funds, Mr. Karpelès wasn't afraid of charging them a fee 50 times his normal rate for the promise they "might" get their money back.  "Might", it appears, turned out to be "might not."
[Image Source: Mark Karpelès on Flickr; Fair Use clause TITLE 17 > CHAPTER 1 > § 107]

Considering the extent the Bitcoin baron had already likely defrauded customers, taking them for a couple of thousand more Bitcoins seemed gratuitous.  But then again, Mr. Karpelès had them on a hook and desparate, just like a classic email scam.

Check out this chart from Blockchain of all Bitcoins transactions identified as exchange fees per month. 

Bitcoin fees Karpeles

Notice the sharp spikes towards the end of 2013? That's likely Mr. Karpelès' handiwork.

Based on that chart, he might have taken 1,000-2,000 BTC ($640K to $1.28M USD) at most, but for those that paid and got nothing, that must have been an especially bitter blow.

Such a double dipping scam is characteristic of top scammers worldwide, including the infamous Nigerian email scams, which would seek to pile on with more requests and promises of reward, even after the initial gains.

Judging by his resume, Mr. Karpelès appeared to be too lazy and emotionally unstable to work in his chosen profession.  But after being fired twice, quitting twice, being arrested at least twice, having several hosting startups flop due to poor customer service, he finally figured out what he was good at -- becoming Bitcoin's biggest scammer.

V. Bitcoin Cafe

But, hey, he needs the money, right?

After all he still hasn't finished his $1M+ USD into his "Bitcoin Cafe", a French restaurant in his new Cerulean Towers Tokyo Office high rise, which housed the now-bankrupt Mt. Gox and Tibanne, Ltd. (its parent).  Wired writes:

Karpeles was obsessed with a new project: The Bitcoin Cafe. Inspired by a French bistro, it would be a stylish hang-out located in the same building as the Mt. Gox offices, a very-new-looking building of metal and glass within walking distance of Tokyo’s largest train station. You could drop by for a beer or some wine, and — using a cash register proudly hacked by Mark Karpeles — you could buy it all with bitcoin. When WIRED tried to meet with Karpeles and Mt. Gox at their offices this past October — and a company representative turned us away, saying that legal reasons prevented Mt. Gox from talking to the press — the placard in the lobby of the building already identified the cafe. This company representative said it would open by the end of the year. It never did.

Bitcoin Cafe
Bitcoin Cafe [Image Source: Wired]

An insider describes to Wired how the disgraced CEO fiddled while Mt. Gox burned, stating:

[Karpeles] was super-proud of being able to use his hacked cash register with the code he wrote.

Another "inside source" expands upon this theme, telling Wired:

Aside from the cafe, he liked to spend time fixing servers, setting up networks and installing gadgets… probably distracting himself from dealing with the real issues that the company was up against

Alas the cafe's site is offline and its construction has been left unfinished. But never fear, you can always view it in Google's cache.

Bitcoin Cafe

The teaser reads:

The Bitcoin Cafe will be a space for both the casual [and the] formal , with beers, wines, and specialty coffees from around the world.  And it will offer stylish French and global dishes.

The cafe has the ambiance you might encounter in a Parisian deli, or in one of the packed city cafes.  It's casual , but it unusual.  Please stop by to enjoy our lineup shortly, a lineup exclusively prepared for the Bitcoin Cafe.

Opening March 2014

The cafe has yet to open.  Here's another blog that is related to the cafe, which remains active.

Here's a picture of the inside (admittedly blurry) from the Redditor who first spotted the cafe.
Bitcoin cafe peek inside
[Image Source: Reddit/croketg29]

And here's its mail box, right next to the mailbox for Mr. Karpelès' Tibanne (named after his cat):

Bitcoin Cafe
[Image Source: Reddit/croketg29]

From cafes to condos, one thing is for certain; Mr. Karpelès may have had a tough time finding his talent, but his chosen profession (Bitcoin scams) has treated him quite handsomely.  The only headache for him is the question is what comes next.

It should be interesting how the Tokyo Bankruptcy Court takes these developments, though. 

Karpeles outdoors
Mr. Karpelès reportedly fled to Japan after legal trouble in his native France.
[Image Source: Mark Karpelès on Flickr; Fair Use clause TITLE 17 > CHAPTER 1 > § 107]

Mr. Karpelès previously fled to France, under allegations of fraud from a former employer.  He could always repeat that tactic (fleeing to Nigeria, perhaps?), but it's going to be a tough decision.  After all, the life of (ill-gotten) luxury is hard to turn away from.

A reader points out that one of the directories in the zip contains what appears to be Bitcoin-stealing malware.  Like all things Bitcoin, be careful if you download the file, don't click on any strange *.exe files.

The ZIP is available here if you are aware of the risks:
http://89.248.171.30/MtGox2014Leak.zip" rel="nofollow

Source: MagicalTux [blog; hacked, archived]



Comments     Threshold


This article is over a month old, voting and posting comments is disabled

Nice hack job.
By protomech on 3/10/2014 8:03:56 PM , Rating: -1
How much does it cost to sic Daily Tech on someone? Is there a discount if someone working for DT has a personal grudge?




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