Mt. Gox: all the news on Bitcoin’s original biggest bankruptcy scandal

This weekend, Mt. Gox founder Mark Karpeles was arrested in Tokyo, bringing years of confusion and paranoia to an end. Starting in 2010, Karpeles ran the largest and most powerful bitcoin exchange, but the site went offline in February 2014 after it was discovered that $400 million in bitcoin had gone missing from the company’s accounts. The official explanation was an obscure “transaction malleability” bug, exploited expertly over the course of years, but insiders have long suspected something more sinister was at work, and this weekend’s arrests only lend credence to their suspicions.

As Karpeles heads to jail, his former employees are speaking up. In a blistering AMA Friday night, former CEO Ashley Barr laid into Karpeles, detailing just how ugly the site was behind the scenes, including evidence of price manipulation, bizarre coding missteps, and outright embezzlement. In one particularly alarming detail, there seems to have been no separation between Gox’s deposits and Karpeles’ personal account. According to Barr, when you sent a deposit to MtGox, the money ended up in Karpeles’ personal bitcoin wallet. It’s worth reading through in its entirety, but the upshot is that Gox was designed with criminal negligence and Karpeles was genuinely indifferent to the catastrophe he was causing. Even after the arrest, Barr is genuinely angry at Karpeles, saying she and the other employees “plan to eat pizza in front of Mark while he is in prison.”