Mark Karpelès on the Collapse of Mt. Gox

Audio interview transcription — WBD076 Note: the following is a transcription of my interview with Mark Karpeles, the ex-CEO of Mt. Gox. I have reviewed the transcription but if you find any mistakes, please feel free to email me . You can listen to the original recording here . You can subscribe to the podcast and listen to all episodes here . In the second part of my series of interviews relating to Mt. Gox, I talk with Mark Karpelès, the CEO of the now bankrupt Bitcoin exchange. We discuss how he acquired the site, how it was hacked and who is responsible for its collapse. https://medium.com/media/086079234ee9ad258a3277e2178d74f7/href Connect with What Bitcoin Did:Listen: | | | | | Follow: | | | | | | iTunes Spotify Stitcher SoundCloud YouTube TuneIn Website Email Blog Twitter Medium Instagram YouTube Interview Transcription Saturday 16th Feb, 2019 Interview Date: “I am very sorry about the way things went; I wish I could go back and fix things. There is only so much I can do so I just continue helping and making sure people get as much as help as they can.” — Mark Karpelès Hi Mark, how are you? Peter McCormack: Hi Peter. I’m doing fine. You? Mark Karpelès: Yeah, I’m very good. Thank you for agreeing to do this. It was I think about 11 months ago when I first messaged you on the Reddit AMA. I’ve sent a bunch of emails since, it’s been radio silence. Peter McCormack: Yes, it’s quite possible, I’m sorry. Mark Karpelès: It’s okay. So why now, why are you happy to do this now? Peter McCormack: Well, I guess the main reason is because I had to reply to a message specifically on public media considering the situation of the Mt. Gox bankrupcy. There are two things I need to make sure known. Mark Karpelès: Which are? Peter McCormack: One is about Brock Pierce, his claims and what he’s trying to do with Mt. Gox, which I’m not sure of and the second thing I’m trying to get known about is the CoinLab claim. Mark Karpelès: Okay. While we’re here, there’s a lot to go through. And there’s a lot of the story, I don’t know because I came into Bitcoin really, whilst it was around 2013/14, I kind of left and I’ve missed the whole Mt. Gox thing. But obviously coming back in 2016, it’s still a shadow that hangs over Bitcoin. So there’s a lot I want to know about. So whilst I’ve got you, we’ll go into detail, we’ll find out as much as we can. So can we start firstly though, can you just try and give me and anyone who would be listening to this or watching this some kind of idea of what the last five years have been like? Peter McCormack: Well, I guess you mean for me? The last five years for me, have been actually quite busy, so I guess with starting with the Mt. Gox bankruptcy, which actually happened on February 28th 2014. From there it’s been a long year trying to set up things as a trustee, getting the Japanese police on the case and so on, Which, actually on January 1st 2015 to today, police announced that they thought it was fully an inside job. They would move 8 months later on August 1st 2015 to arrest me. However, in the meantime, the US police has been working on the case too, more specifically the IRS, I believe was the main entity working on this. Mark Karpelès: So I was arrested. I spent 11 months and a half in detention, so during that time I was unable to get any contact with the outside. So I followed a little bit of the news of what happened, but there’s nothing very major happening to me in the meantime. However when I was out, it was, July 14th 2016. So July 14, actually the French national day, which was a very good day for me because I left the detention center just for the same day there is the truck attack in France, which made it not so good day after all. From there, well things continue to move with this process in Japan. The trial start date wasn’t set until much later. I believe the trial started, yes, July 11th 2016. So I did my first real day and a few weeks later, Alexander Vinnik, a Russian national was arrested in Greece. So actually on my first day of trial, I plead not guilty and they explained that I would continue working on trying to find the stolen Bitcoins from Mt. Gox. So actually I believe the the arrest of Alexander Vinnik is a very big step in that direction. While I was arrested, the Mt. Gox bankruptcy was just continually good. So creditors file their claims, everything since was more or less normal. The trial came and went and we go into 2017 price of Bitcoin starts to rise quite a bit and we hit the issue with the Mt. Gox bankruptcy, now having more assets, values and liabilities. By the time we entered 2018 I believe things looked, well, not too good. There’s lots of news coverage on how we were, Mt. Gox would get a billion dollars whatever, I did try to see what I could do to solve this myself too. But it proved to be rather difficult. However, it was solved in June 2018 when creditors filed for civil rehabilitation. With civil rehabilitation actually claims are being reevaluated, depending on what kind of plans will be approved should be paid as whatever value, people were owed, which means we… basically solves this issue that came up with bankruptcy. Mark Karpelès: So that was a process in civil rehabilitation, creditors are due to be paid more than they initially supposed to within bankruptcy. There’s no story anymore of any kind of surplus or anything and I believe bankruptcy is actually on very good track too, and either this year or next year, depending on how things go with CoinLab, depending on how it go overall. So that was bankruptcy and for the IRS actually, I’m due for a verdict one month from now. I mean you’ve told the story there, but I think I want to know a bit more about what’s it been like for you because, well you’ve had to deal with the pressure of the world’s biggest heist happened under your watch. You’ve had death threats, you’ve had all kinds of accusations of all kinds of crimes. You’ve had anger towards you. You spent 11 months in detention, pretty much in solitary confinement to a cell without the ability to go outside. I’m trying to get a feeling of what it’s actually been like for you and how, how it has impacted you. Peter McCormack: Well, actually well for me personally, the time around the bankruptcy was probably the most stressful part. Before the bankruptcy, we didn’t even know exactly what was going to happen. When Mt. Gox went to the court to file, it was when we basically expanded all options. We even tried to approach it, with VCs on Bitcoin World to try and see if we could save the exchange. The conclusion. It wasn’t going to be possible. Mark Karpelès: So other time, well there were quite a lot of pressure, the press was sitting in front of the office for the previous few weeks. A couple of our customers sitting there too actually. I even had people not come to the office anymore because I feared for their lives. So basically we file for, actually civil resolution first. The press conference I give this day, which you can obviously find a lot of examples of, was very stressful. I mean, I did try to go and say that I’m sorry, in Japanese at the same time and completely messed my words. Basically it was my first time doing a press conference around Mt. Gox on Mt. Gox civil rehabilitation and I’m saying that I think that Bitcoin was stolen. So that was not a very much a good experience. In the following months of course, I did receive a lot of death threats, a lot of angry messages from many people. I lost basically any ounce of credibility I had back running Mt. Gox or even just as any kind of new job, yet aside from Mt. Gox, there were still Mt. Gox brand company Tibanne, which was not bankrupt yet at the time, which I tried to keep alive since we did have customers on things going on. They did more or less for a few months, actually the next year, even when Mt. Gox filed for bankruptcy. So I did my best to try to keep employees, with a job. So yeah, that was quite a lot of stress to dealing with bankruptcy with this at the same time. After that, well, I didn’t really know what to do with myself anymore mostly because Mt. Gox had kept me very busy. I would spend more than eight hours a day in different kind of meetings with banks, lawyers and all sorts of people. So when Mt. Gox and Tibanne were both in bankruptcy, I tried to find something new to start, despite my situation, which actually proves to be quite difficult. It’s actually in that situations that I was arrested in August of 2015 so the arrest was quite the surprise too, well, not exactly a surprise, it was leaked in the press a few days before. But the news of it was a bit of a surprise. So, well, when the police came, I just follows them, from there, went into being interrogated daily, for I guess, one month and a half at first. Then charges were pressed. Well actually at first I was detained in the police station in Shibuya, it’s called the Shibuya police station. So the first days of interrogation where I gave interrogation for 8 hours, sorry, have interrogation and just sleep. After one month and a half when this stuff actually, I went from being there all day to not having anything to do. My career that was, I don’t know how to say this actually, I mean, I don’t think words to explain this, but when a few weeks later I was rearrested on interrogation, well interrogation started again I was almost grateful to have something to do again. Right. Peter McCormack: Except this is only for like 20 days. Then I was back in detention with nothing to do all day. The thing is, at this kind of point in time, so I was in detention, but I didn’t know how long this would take. I have no plans, no court appearance date and I am still in detention. I’m just waiting for something somewhere to happen. So this was actually quite, might’ve not been stressful or I don’t even have to worry about this. Mark Karpelès: So, actually I spent time in the police station until December 16th, where I was moved from actually police station that has not many cells. So you’re always with someone, where the translator had… well I was put in a cell alone and we spend seven months there. So I started basically to get used to this. I made sure to get books, pens and things for writing so I could do something with my time. But still spending every day just reading or writing is kind of difficult, especially when you cannot meet anyone. Does it affect your mental state? Peter McCormack: I would say so. After this, when I was finally released on bail, I actually had quite a lot of trouble too, and adapt back to the outside life basically. Well there are some things that didn’t bring back memories at sometimes. Mark Karpelès: Well, let’s unpack some of the story. There’s a lot to go through it. Peter McCormack: Sorry. Mark Karpelès: It’s fine. There’s a lot to go through. I’ve got a lot of questions. I am going to want to go back to the point where you start to talk to Jed. You started to discuss the takeover of Mt. Gox. Can you talk me through how that started, how the discussion started and what the arrangement was between the two of you? Peter McCormack: Well, so actually when I started to get involved with Bitcoin, it was around 2010. I believe I was the first company actually to accept payments in Bitcoins because most people out there were not technical companies. I was acting as a very small entity, but it’s still a company. That’s the thing I start accepting Bitcoins for web hosting and a domain name registration. I like getting involved with the community and some people, well, so I would have technically, so they came for me for some kind of help and this actually included Jed, who asked me for some help to set up for the telecommunication with banks, who provide very complex APIs this kind of things. Mark Karpelès: So that’s how I starting to interact with Jed. In January, I believe, of 2011, he met me asking you to keep it secret because it could go the panic, but that was considering to send Mt. Gox and asked me if I was interested in. To which I replied, of course it’s an interesting thing, but I don’t have any money to go on. And then if it’s a hosting company, it’s not like a huge mandatory thing. I actually I thought that would be it. But few days later it came back to me and we worked out a kind of transfer agreement where I wouldn’t pay anything upfront, but which would come with a six months revenue share and Jed keeping 12% of the new company that will be created to hold Mt. Gox. The structure of the agreement had an indemnity clause in it, right? Peter McCormack: I believe so, yes. Mark Karpelès: Right. And how much due diligence did you perform before the arrangement? Or did you just kind of take it over without thinking about it too much? Peter McCormack: Well actually at the time Mt. Gox was well known as the only Bitcoin exchange out there. Well, I mean I’ve been running a business alone without much budget, so there were no real due diligence except for confirming Jed’s identity. Well I used Mt. Gox Myself, so I knew it worked. So that’s actually was about it. Mark Karpelès: Was Mt. Gox insolvent when you took it over. Peter McCormack: Well, I guess it would depend on your definition of insolvent. Actually I didn’t verify the cash assets because those were on Jed’s private name, so I couldn’t just ask him to send his personal bank account because and however at the time Mt. Gox wasn’t known to be, well actually this, and there was no real discussion of this kind of issue with exchanges yet. Mark Karpelès: Were you aware of the missing, full missing number of Bitcoin at the time you took over Mt. Gox? Peter McCormack: At the time of seeing the contract, I understood Mt. Gox was missing $50,000 because it was stolen by some, someone from limited reserve. However, Jed assured me that should be it and told me it was quite sure there would be no other issue with this code. Mark Karpelès: What was the plan to recover the $50,000? Peter McCormack: Well, basically from what Jed said, just running Mt. Gox should recover this money soon enough. Mark Karpelès: Okay. Did you have the necessary skills to take over Mt. Gox? Peter McCormack: That’s once again, a very interesting question. If it’s about skills, about running a Bitcoin exchange, I’m pretty sure nobody had any experience at the time yet. As for, what running a business I did run or get involved in different kinds of business over the years, so I knew quite a few things about that. On the technical side, I could see Mt. Gox could use quite a bit of a help. Mark Karpelès: Actually the source code I got from Jed after the transfer was, not really usable. But that is another story I guess or for another question. But, basically in terms of running a regular business or fixing things technically with Mt. Gox, of course, that’s something I could do. However at time Bitcoin was not worth as much as we could call this a financial business. Do you think some people look at back at the time of 2010 through to 2014 with 2018 eyes and they consider the time you took over Bitcoin, they think about it as a time where Bitcoin is worth thousands of dollars rather than just a few dollars. And do you think that changes people’s kind of views and opinions? Peter McCormack: Actually yes. I would say looking at Bitcoin and seeing as it was like $3,000 today, make people think differently Bitcoin even at the time despite actually Bitcoin was like 30 cents I believe in 2010. I mean someone sold a couple of pizza for 10,000 Bitcoins. That’s a very well known and documented event. 2011 Bitcoin actually more or less was around $1 at a time. So we’re not talking about the same kind of scale anymore. If someone deposited like $1,000 on Mt. Gox, it was huge. So there’s very, very big difference of scale I would say. Mark Karpelès: So the price accelerated quicker than perhaps the infrastructure and the team you had? Peter McCormack: Yes, actually I would say so. The price and the size of the market, it’s a number of people using, or trying to buy or sell Bitcoin, I feel, very quickly. Mt. Gox went from 3,000 users in March of 2011 to 60,000 in June when there was, the first, well-documented hack of Mt. Gox. From there it only took two years to reach 1 million users. Mark Karpelès: What kind of team. Did you have you or were you doing it all? Peter McCormack: When I took over Mt. Gox in March, I was working alone actually. However, I quickly hired more people. So by June I actually got four people in the company, which was not enough to deal with the hack. So actually asked for help. Many people from outside came to help with a Mt. Gox including Roger Ver, well, people from his company. And those are customers. Mark Karpelès: But you are already fighting daily fires at that point. I think that’s what I’ve heard you say. Peter McCormack: Yes. Actually the first 3 months of Mt. Gox, was a lot of me fixing issues with Jed’s code because the way Mt. Gox was made, there were a lot of very basic mistakes or issues that may happen when you have maybe a handful of customers. So if two people placed buy or settled or at the same time, they could execute the same orders from the order book. So to fix this, ideally what you would do is to have an execution queue and maybe moves the whole execution outside of the main process. But I couldn’t change Jed’s code that much, I just fix this with basically what we call a lock. So it would maybe make things a bit slower, but it would avoid executing multiple orders multiple times. There was a lot of rounding errors so people could read balances that didn’t exactly make sense. Or when order is good multiple times, the balances were not right. Because, update balance before, well after reading the balance for someone, they could get free Bitcoin, free money or gets less ones than they should. Mark Karpelès: What else? Yes, passwords were encrypted with a very, well, not suitable way for passwords. So with just what we call MD5. So that’s something has changed to, probably one of my very first challenges was to move passwords to something that’s slightly better. There were a lot of things to fix with Mt. Gox and as people were using the website and more and more people were using the website there were more reports of issues. Well, the very first person I hired actually was to help with the customer support because I couldn’t fix things and answer emails in time. In hindsight, do you think you probably should have closed Mt. Gox and rewritten it from scratch? Peter McCormack: I would say so actually. The first, well seeing how Mt. Gox was at the time… The issue there was with the system, I should have most likely not run this as it was. However many of the issues were not visible at first, but only when reported from users. So there was no way for me to find all of this unless I spend a lot of time reading through all of the existing code. Mark Karpelès: Okay. Who is responsible for the failure and bankruptcy of Mt. Gox? Peter McCormack: Well, that’s a very wide question. The bankruptcy ultimately comes from the successful thief of Bitcoin from Mt. Gox, which as a director I should have seen. There’ve been a lot of things to deal with and to look at. So I had to fix issues and other things. Well I had to make some assumptions at the time that turned out to not work exactly in the way they should have worked. Mark Karpelès: And especially with cold wallets and Bitcoin security. I mean, cold wallets were working fine, but the way Bitcoins were stolen from Mt. Gox, worked in a way that happened even before Mt. Gox knew about, well because it’s a bit of a complex things, technically speaking. But basically the hacker got inside Mt. Gox before I could move all of the system to new servers and managed to steal keys whilst staying undetected, which were assumed to not have been stolen and were being reused by some customers, which means that whenever they made deposits, the hacker would be able to steal the Bitcoins. But, on the Mt. Gox side there would appear some, where an issue could appear like because of the this, some customers were credited more Bitcoins than they should, but of course nobody reported it. So, in the end, the cold wallet was working well, most of the system worked as expected, but the location of the theft, which happened with very small amounts and over a long period of time, made it very difficult to detect. Even after Mt. Gox bankruptcy when the trustee had specialists to work on this, the US law enforcement, Japanese law enforcement of order, they found it hard to find out exactly how many Bitcoins were missing. What was the total number of Bitcoin stolen from the cold wallet? Peter McCormack: Well actually they were not stealing from the cold wallet, but from the deposit system and the total amount is believed to be between 500 and 600,000 Bitcoins. Mark Karpelès: And you state that that was hard to detect? Peter McCormack: Yes. At the time those Bitcoin was supposed to be in the cold wallet. So I assumed this was working, because when I checked balances in the system which were growing, the hot wallet of course was not supposed to grow and it wasn’t, that was well the way things were supposed to be at the time. Mark Karpelès: I guess people would say you should have noticed 500,000 Bitcoins missing from the cold wallet. You should’ve known the balances. Is that a fair criticism? Peter McCormack: Well, I kind of deny, I should have moved the cold wallet to something better. The way the cold wallet was made into the [Inaudible 30:26} was using, well technology of the time which included printing private keys and the public key equivalent on a piece of papers, which were stored in bank safes or secure locations to make sure that basically no one could look at this. The issue is just, as I said, there was no key encryption was not standard, there was no bip 32 that will download to make like one master seed and easily check how much there was on the address by just keeping the public key element. The way things were, we only had well this at the time. Mark Karpelès: Discussion with people at a time, where that basically could be dangerous to keep the public keys around because no matter what kind of product sources used, that could be a way to work it, when you find one public key matching private key, you found from the secure random generator, it’s very easy if you can see the other keys to just continue running the random generator to find everything. So the main advice at the time was to not keep public keys either, which made very difficult, to confirm how much was in the cold wallet. So who is responsible for the failure of Mt. Gox? Peter McCormack: Well, of course I say I bear, a large part of responsibility, the way things where at the time whoever didn’t tell allow things to be done better, except vap32 was released end of 2012 or 13. So, of course, it was new at the time, so I didn’t believe at the time it was a good idea to just switch to new technology without it being more proven by time. But inside I would say it could have been a good idea to make it well possible to see what is in the cold wallet. The other issue was with the servers themselves, which, were actually were inherited from Jed, but I should also have well checked security, improve the way I think it was secure on the servers. Mark Karpelès: So would you say there’s a combination of responsibility here from you? There’s fault in how you’ve, maybe the lack of full due diligence in taking over Mt. Gox, mistakes you’ve made while running Mt. Gox. Part of the fault lays on the fact that this is new technology. You know, there’s still hacks happening today, right? You are essentially the guinea pig, the fall guy for original technology and then also blame should be placed still with Jed. Is that a fair summary? Peter McCormack: I would guess so actually. So I don’t think Jed, expected for the price to go the way it went and nobody expected at the time. I mean, we have trust in Bitcoin. We believed it Bitcoin, but we never saw Bitcoin going from like $10 to $30 in 2011 or even reach $1000 in 2014. Before Mt. Gox, it meant dealing with many, many more customers, banking issues, simply weren’t just some random business. We’re very close to being a financial business, which means, governments, approached us or went after us. Mark Karpelès: So the kind of work this meant, changed drastically over time. Well as I said before, it was mostly an issue of dealing with fixing things daily. I could think today of many ways this could have been done better, but I don’t think at the time anyone had any idea of how things would go or what specifically could do proven this. One thing is that Mt. Gox actually blocked, many, many kind of attacks from different kinds of hackers. We improved security. We were often attacked by DDOS attacks. So I actually, Mt. Gox went to, companies specialising in protecting from these kinds of attacks to make sure the website would continue working even under attack. We went through a lot of things, but I guess at the time making the cold wallet auditable was not the priority at the very beginning because of the risk it involved. That’s something that could have been changed if we knew about the way, well we would have knew it’s important. I guess most people will hear about the reports of maybe 10 most prominent hacks on Mt. Gox and they’ll look at something like the WizSec report, but probably fail to appreciate maybe that the site was under constant attack and they don’t hear about all the attacks that maybe you thwarted. They only hear about the ones that got through. I guess it’s also an industry where anybody who’s running any kind of exchange is constantly under attack. And you were the first to try and fight back these attacks. So do you think sometimes maybe people don’t appreciate that? Peter McCormack: Well, I guess actually quite a lot of people do not appreciate the way things, are for example, even today we is, well of course attacks, but also dealing with banks, dealing with international entities and dealing with governments. Many other exchanges well came up while Mt. Gox existing, that appeared before Mt. Gox went into bankruptcy. Mark Karpelès: Some had an issue with banks, some where just hacked. One of the first Bitcoin wallet service, which was called mybitcoin was completely hacked and disappeared from circulation. I don’t know, if it was in 2011 or 2012 that there were many, many hacks on basically every single company and on the internet is targeted, daily. Bitcoin businesses even more because as a much higher profit to be made from it. But from the point, even chat networks are often hacked just because someone doesn’t like someone else on the chat network or just gets the world network down to shut them up or websites… I mean DDoS attacks are very common on the Internet. Sometimes you hear on the news that some hackers managed to take down the FBI website, I think a few years ago. So basically the internet, well a dangerous place because everyone can try and go and attack anyone else. Well speaking of attacks, I forgot about one kind; swatting too. Youtubers, just attacking each other or kind of things. So yeah, the world is a dangerous place and being an exchange puts a big target on one’s back, which means that there would be that many more people trying to, target these kinds of businesses. Have you taken enough responsibility for what’s happened? One of the common things I hear from people is that you’ve tried to defer blame for what happened to other people or to the technology. Do you think you’ve taken enough responsibility for what happened? Peter McCormack: Well, I don’t know actually what enough is so, and I guess it depends on for it for everyone. My goal is to just not stop doing what I can do as long as there is something I can do. So when I was running Mt. Gox, I always tried to make sure everything was running smoothly. Obviously it was not enough and Mt. Gox went to bankruptcy, so I did my best to make sure the bankruptcy would run smoothly and as fast as possible, which was well, because I cannot control everything of course, then go as good as it could be. Mark Karpelès: But still I spent a lot of time, getting in touch with creditors and helping them, explaining how to fight claims. I tried to be as available as possible. When we went with the issue of Bitcoin, well having more value than wouldn’t be needed for the bankruptcy. One thing I actually did, which lots of people didn’t like at first is I said, when people actually asked me if I would get anything, do a pledge it back to the creditors. And my reply was, is that, of course I could do it, but it wouldn’t be much better for Mt. Gox to first of all switch to civil rehabilitation, that would require effort from the creditors. So I’m not going to pledge anything at this point. Please work and try to make this a civil rehabilitation. I guess not everyone liked it, but considering that if I was to pledge anything, it would mean that funds went from Mt. Gox to Tibanne and to me. A lot of people would get their hands on it first. Lots of which would go into taxes because in Japan, payments from shares you own, is taxed liked 30%. Of course, even if it came to me a lot of people would just sue me to try to get their hands on it first. So it will be just an unending battle and somebody would profit from it. So rather than just telling people feel safe and don’t do anything, my idea was to tell them to act. Okay. We’ll come back to that. Sifting through the various hacks and trying to understand the timeline from 2011 through to 2014, it seems to me that you inherited a broken system with a debt and it seemed to me that the hole, which the debt was based around kept digging and digging and getting bigger and bigger and it feels like you were fighting fires and chasing your tail and trying to recover losses. Perhaps one of the things that worked against you is not at any point just coming clean and saying we’ve got a problem here. It’s almost like the problem, the more you try to fix a problem the more it escalated. Is that a fair assessment? Peter McCormack: I guess so. Actually there are reasons for things went this way. Mark Karpelès: Okay. Peter McCormack: So first of all, well the way Mt. Gox was when I took over Mt. Gox, of course there was this issue with $50,000 missing, that was another 80,000 Bitcoins missing which Jed told me one morning on Skype. Mark Karpelès: Did that go missing during the handover period? Peter McCormack: Actually it went missing mostly at the end of the handover period, around the same time that Jed sent me the password to the server. Mark Karpelès: Yes. So what do you think happened? Peter McCormack: Well, that’s difficult to say because, we needed to have have more proper forensic investigation on the server. But what was clearly visible is that someone managed to transfer 80,000 Bitcoins from the Bitcoin client running on the Mt. Gox server to an outside address. Mark Karpelès: They’ve never moved have they? They’re still at that address? Peter McCormack: Yes, I believe so. With an address starting with 1feex or something. Mark Karpelès: What is the value of those Bitcoin at the time? Peter McCormack: Well, it was more, but slightly less than $8,000, actually. Because Bitcoin was like 0.95 or something. Mark Karpelès: But if those Bitcoins aren’t recovered and the value goes up, it becomes a bigger problem to solve. Peter McCormack: Indeed. Mark Karpelès: And so those 80,000 Bitcoins go missing during the handover and Jed’s response is “this is your problem now Mark”? Peter McCormack: Well actually more or less, I tried to ask him how to handle this or what we could do, but because I had already signed a contract with him and there was a full indemnification for any kind of issues. I couldn’t really bring this up anywhere. So my best shot of this was just to listen to his advice, or at least it was, I believed at the time. Mark Karpelès: So he gave me, well, he sent me an email where there basically were three options to go with this. One was just to hope and wait. One was to try to get an investor in, a company based in the Cayman or somewhere. Well it didn’t really sound like a good idea to just get some random company inside. The solution was actually, to transfer as the new Bitcoin debt that into US dollar debt by just trading it over, so that’s basically the mail he sent me. Over time there’s a number of hacks, different kinds of problems on the system. I guess the debt of the Bitcoin to the company is growing. Are you starting to worry at any point thinking how do I… Because you’re essentially, you’re operating a fractional reserve at that point. Are you starting to worry at all thinking you’ll never be able to recover this? Are you worried that the price is going to go so high that you’re in a position where you can’t pay all the creditors? Are you starting to worry whilst operating the exchange? Peter McCormack: Well, actually I would say I was worried about starting day one, because it’s a very big thing to take over. Some of the details like 80,000 Bitcoins missing on top of the $50,000. So it’s not much more of a difference, as time, until Bitcoin went to $30 and it was much more of an issue. Well basically everything that happened during running Mt. Gox, from banks closing Mt. Gox bank accounts, governments trying to stop Mt. Gox operating was a source of worry. I tried to address my business with the best of my abilities and as fast as I could. Mark Karpelès: How much can you talk about Willy Bot? Peter McCormack: Well, unfortunately, it’s part of an ongoing trial right now in Japan, so I’m afraid I cannot reply to this. Mark Karpelès: Okay. The debt is growing. You’re obviously getting worried. Is there anyone, anyone else in the business aware of the full extent of the missing Bitcoin or is this something you’ve just kept to yourself and kept away from everybody else? Peter McCormack: Well, actually I made sure I would be the only one knowing about this. Mostly because I believe it was my responsibility as someone took over Mt. Gox at the time. Just was my job to get this cleared. Well, actually based on the calculation, I made at time, that should have been gone by 2013. Mark Karpelès: Based on trading fees and buying Bitcoin back? Peter McCormack: Basically. Mark Karpelès: And maybe something else we can’t talk about, but yeah… But that didn’t happen, right? Peter McCormack: Well that didn’t happen because in 2014, when someone who actually used to run a new exchange, came to the Mt. Gox chat and explained that to us that it was possible to steal Bitcoins from Mt. Gox with a transaction malleability. This prompted Mt. Gox to stop allowing transfers and went through a full audit of all Bitcoin in the cold wallet. There it became clear, Bitcoins were missing. Mark Karpelès: So that was the time you first became aware. Peter McCormack: Yes. Mark Karpelès: So at the time of the audit, you were still short. You’re aware that you are short an amount of Bitcoin, you hadn’t recovered all the lost Bitcoin up until that date. So how short were you in terms of Bitcoin at that date? Peter McCormack: Actually time of calculation on that date, considering, well Mt. Gox made about 200,000 Bitcoins so far. We knew about less than 100,000 missing, so there should have been actually more Bitcoins. Mark Karpelès: Right. At that point you believe you had a surplus? Peter McCormack: Yes. Mark Karpelès: Without realizing your own Bitcoin had already been stolen. Peter McCormack: Yes. Mark Karpelès: So you start the audit. Talk me through the process of the audit and what you start to discover and what you start to feel. Peter McCormack: Well basically there was different parts of the audit because Mt. Gox over time, I committed many kinds of different kinds of cold wallets. But the main part is actually paper based which involved, to check, well being in secure environment and scanning private keys. Which I believe there were probably something like 200 to 300 sheets of paper at the time. So scanning and checking on the blockchain how much there is. For this purpose I made a specific piece of software which, from the private key generated the public key, well, look it up. So checking all of the code I actually took some time mostly because the hack, so I had to be in the office and deal with many other things. Mark Karpelès: Now at the same time, we also made, something to walk around the transaction malleability which is actually called the… Well we basically created a new transaction hash that wouldn’t be affected by transaction malleability with the help of a Bitcoin core developer. It took I believe about a week to go through all of the cold wallets on… Well actually not all of the cold wallets, in most of the cold wallets there were not enough Bitcoins to continue. From that point, Mt. Gox started to discuss with the courts, agreeing to bankruptcy or civil rehabilitation. And at the same time we approach big names in the Bitcoin world to see if there was any way to save Mt. Gox at this point. So at first there was a belief of around 750,000 customer Bitcoins missing and 100,000, Mt. Gox Bitcoin. But did you realize all was gone at the same time or were you just checking wallets and realizing over time? Explain to me how this actually happened? Peter McCormack: Well as I say, it take some time to scan all of the wallets. However, well as I run through the addresses, I find only small amounts or no amounts. Well I started to come into, well realizing that things were looking very bad. I’m actually nearing then I was actually afraid to even scan addresses, not knowing would be better, than knowing that there was bad news. Mark Karpelès: Would you say that probably is a reflection of sometimes maybe how you run the business as well. Would it be fair to say perhaps you ran away from problems or kind of kicked the problem down the road and moved onto the next problem? Peter McCormack: Well, for Mt. Gox, I wouldn’t say so because most of the issues outside of the missing Bitcoins initially coming in. We will take all this head on and fix most of the issues out there. Even the US seizure of $5 million from Mt. Gox was about to be solved by the time Mt. Gox went into bankruptcy. Mark Karpelès: Okay. So you realized that 850,000 Bitcoin are missing? Peter McCormack: Yes. Mark Karpelès: About half about half a million dollars. It’s the world’s biggest heist. Peter McCormack: Yeah. Well at the time I was not thinking about if it was the world’s biggest or not. I wasn’t sure what to think or what to do. With the help of Mt. Gox lawyers at the time, well, Mt. Gox went into the civil rehabilitation filing. From there we went on to, well, taking some time to re-analyze everything. Mark Karpelès: Do you think during the time when it happened, you were being honest enough with customers or had you had a panic and didn’t know what to do? Talk me through the time when you’ve discovered Bitcoins are missing and you’re putting messages on the website. What’s your kind of thought process during that time? What did you do right? What did you do wrong? Peter McCormack: Actually, the main thing that happens at the time when we first saw the issue with the transaction malleability, we discuss with our lawyers who advised to go through the full audit and not disclose anything at a time. So we did explain that we found about the transaction malleability we explained why Mt. Gox stopped transfers and what steps were being taken to solve this, which means something technically speaking, making sure the system would be safe before it’s restarted. Mark Karpelès: But in the meantime, during the audit as well, because Bitcoins were found to be missing, we approached a court and the initial advice from the court was to continue running the business as usual until the 24th. The court asked us to just a stop the website. So it just became a blank page at the time. From there it was only a few days until the bankruptcy was announced. And then all chaos ensues. Peter McCormack: Yes. Mark Karpelès: So if you look back on the period of 2011 to 2014, if you’re really honest with fair with yourself. What are the fairest criticisms you can put on yourself and what should you have done differently? Peter McCormack: Well, I guess the way the missing Bitcoins were dealt with was the biggest issue there. Well the biggest issues that caused, well not that caused that remains to be discussed. At a time, so Bitcoins under laws were missing. The only advice half of the time was from Jed, which was to basically try to do something to solve this situation over time. But not make any kind of waves or anything because it can disrupt the market. Mark Karpelès: Afterwards when Bitfinex was hacked and the issuance of tokens to just replace whatever was hacked and recovered at the time, shows us that actually much better way to deal with this kind of issues. So I believe anyway today, the most standard procedure for exchanges that get hacked, a way of doing things. But at the time, I went with whatever I had, which meant trying to get the exchange to continue running, while making profit in order to make sure everything was getting whole again. Talk me through the Japanese bankruptcy process. Talk me through how it works. Talk me through the process that you’ve been through with taking Mt. Gox through that. And then also can you talk to me about this very strange situation where most companies would go through a bankruptcy, you don’t see the assets inflate by 100x in that time, which changed the whole dynamic of the situation. Can you talk me through that? Peter McCormack: When Mt. Gox actually filed for civil rehabilitation on February 28th of 2014 actually we didn’t have many assets. We had a few million dollars, which was in cash assets and a few thousand Bitcoins. One thing that changed things quite a bit is actually a few weeks later we added 200,000 Bitcoins to the bankruptcy estate. When Mt. Gox went into bankruptcy on April 14th 2011, where part of the estate were valued at the time. So I believe around $500 a Bitcoin. Well Bitcoin was worth more or less this kind of amount, Mt. Gox should have had four times to five time more Bitcoins. So even if the price increased three or fourfold, it would have been fine for the Mt. Gox bankruptcy. Mark Karpelès: So from there, it went on as a standard bankruptcy procedure, people make claim or the claim was of course evaluated in Japanese yen. So regarding the Bitcoins, the trustee actually tried to find ways, he could distribute Bitcoins as Bitcoins, so they were not sold at the time. However, in 2017 or 2018, when Bitcoin price went over $2,500, it meant that the value of the Mt. Gox estate was higher than the total of all the claims, which actually is not unheard of in bankruptcy. Sometimes companies or individuals have real estate, that ends up being sold for three or five times more than the estimated amount. Actually what happens typically in these kind of cases is whatever remains is paid to the individual or the company shareholders because it means that we’re not actually bankrupt. But for Mt. Gox case, it’s slightly more difficult question. The easiest solution for this was just to go back to civil rehabilitation because it will not only make it possible to re-evaluate the claims, at a more accurate value. But also it wouldn’t make it easier to distribute Bitcoins as Bitcoins to creditors, which would please most of the creators. Could you legally yourself have claimed the surplus from the bankruptcy? Peter McCormack: Not myself anyway because I’m not technically the owner of Mt. Gox. Mark Karpelès: So, Tibanne. Peter McCormack: But Tibanne anyway, there’s no reason to claim it because it’s part of the shares. So we were on the shares and would have been receiving this kind of surplus, so there was no claim to fight, just whatever remaining at the end of the bankruptcy when all creditors are paid. So the company is seen as having no debt anymore, is paid back to the owner of the company. Mark Karpelès: So it could have been paid back to you? Peter McCormack: It could have been paid back to me, however, based on my discussions with the trustee and the court, well I help make sure that wouldn’t happen. Mark Karpelès: Okay. There’s a couple of spanners in the works with the whole process in terms of creditors and things holding things up. Let’s talk about those now. So firstly, let’s talk about CoinLab and Peter Vessenes who is the only person I haven’t been able to get hold of during this process of trying to interview various people. Talk me through the Coinlab legal situation, what Peter is claiming and what your thoughts on this are. Peter McCormack: Well, maybe I should start with the beginning of the story between Peter on Mt. Gox, which is a story actually that starts in 2010 in Costa Rica where Jed was and where Peter came with him to maybe work or to try do something with Mt. Gox. So I wasn’t there so I don’t know exactly how it went. But after taking over Mt. Gox I got an email from Peter, telling me that he actually owns half of Mt. Gox and should have been paid half of whatever Jed was paid. So I forwarded this to Jed and Jed responded to Peter and me just saying “What the f**k” basically. Mark Karpelès: After a few exchanges, Peter Vessenes stopped sending emails and I completely forgot about him until 2012, when Mt. Gox was getting bigger and we saw the situation in US to be increasingly difficult. We discussed with three different lawyers and we got three different opinions. So some lawyers thought being in the US would be fine as long as we’re in Japan. Another firm told us we would need an MSB license, so money service business license. Our main lawyer just told us you need an MTB, money transmitter business license, which means having an office in every single state; huge cost! So we saw the cost as being $10 — $15 million, which is something we couldn’t do. Around the same time CoinLab approaches us and initially actually offered to take over Mt. Gox management, which was not very interesting in itself, but after some discussion offered to just handle the legal situation in the US, by representing Mt. Gox and being the Mt. Gox USA front. So of course, since that anyway needs to be in the US to do this, it was easier for us to just, ask CoinLab to do this. At first they seemed to have some interesting ideas on how to deal with that. So we started drafting a contract, which I believe was signed a few months later in 2013, actually no, the contract was signed end of 2012, where CoinLab would have of course to comply with all laws and regulations, well, represent Mt. Gox in the US. So the contract was signed. However, what we saw is that CoinLab of doesn’t seem to be compliant. By the time we approach the time CoinLab would need to actually go live, the FinCEN, published guidance explaining that Bitcoins where indeed MTB, we need to get the MTB license. So our first thing was to contact CoinLab and to ask them what they thought about this or not, what was their plan to comply with this. However, they didn’t provide the response to this. Their initial response that for license MTB is not required for startups. Then, well the guidance was quite clear on this and all the lawyers were not convinced, but whatever CoinLab said, we offer them to continue working with them and we need them to provide us a timeline of how they plan to comply. A few months later, I don’t remember exactly when, they just filed a lawsuit against Mt. Gox, claiming we didn’t allow them to go live without the license because it was a clear violation of the contract and it was a huge risk for Mt. Gox. They sued Mt. Gox over this. We filed a counter complaint, I believe. Explaining that not only they didn’t comply with the contract, but they are starting doing live customers, sending millions of dollars whilst still in test. From there the lawsuit moves rather slowly, by the time Mt. Gox went into bankruptcy, it was still ongoing, so it was “stayed” by the bankruptcy. Did you stop Peter creating a $16 billion business? Peter McCormack: I don’t think so. I mean when CoinLab approached us they actually failed their first venture I believe, which was to try to let game companies include the mining software in games to use the gamers GPU to make money. I don’t think CoinLab ever had an actual business, a running business ever. Mark Karpelès: So what is the status of the lawsuit here? Cause it’s holding up the distribution to creditors right now. Peter McCormack: Yes. Well, the lawsuit, right now is “stayed” which means that it cannot move forward by itself. CoinLab initially filed a claim for the loss, its amount of $75 million plus less interest in the Mt. Gox bankruptcy. They made a similar claim to the Tibanne bankruptcy. Well, their claim of course was rejected by the trustees. So they made a petition for assessment, which allows them too, allows the court to assess a claim again. However the petition for assessment, wasn’t over by the time Mt. Gox went into civil rehabilitation again. So right now they filed a claim again, around a $16 billion claim, which was rejected again and they’ve got until March 7th I believe to file or not file a petition for assessment. Mark Karpelès: So that’s about a similar time to your own next steps for your own legal position. So March is a big month? Peter McCormack: Yes, March 7th is the deadline for filing petition of assessment for CoinLab and the deadline, well there is the verdict for me on 15th and there is the creditor’s meeting on the 20th. Mark Karpelès: Brock Pierce? I obviously spoke with Brock last week and I guess from my position, I can’t fully get to the bottom of what his incentives are or his motivation is. It seems to change depending on which interview I’ve read or watch and it changed during the time I spoke to him. Can you give me a background to the Brock situation because there wasn’t a time where you did make an agreement with them. So can you give me the background, where we are now with Brock and what your own personal opinion is on what’s going on here? Peter McCormack: Yes, but one thing I am going to correct is, we actually don’t have an agreement with Brock, just a letter of intention from him. Mark Karpelès: He seems to think though that is a legally binding agreement. I’ll tell you what he said to me, his view was in the fire sale of a business where something’s going crazy and he’s stepping in to help you. You said you don’t always have a full legal contract. Sometimes you operate with a very limited letter of intention. He said he spent hundreds and hundreds of thousands at the time on PR and press and getting people in to help fix the situation with Mt. Gox, so how much of that is true? Peter McCormack: Well, so I go back to the background with Brock. He approached Mt. Gox back in late 2013 to 2014 about expanding Mt. Gox business to China, as he had a lot of contacts with China and he could make Mt. Gox work very well over there. When Mt. Gox went through bankruptcy, he approached us again, offering to take over the bankruptcy, but basically making Mt. Gox a better… get to a good ending basically. Mark Karpelès: So the first step to this was, of course, to try to buy the Mt. Gox shares, of course, it will need the approval from the Tokyo District Court on different of those things. So the first thing we came with was the letter of intention where he explains the situation. Basically there are two, well I believe that different important things on this, but the two last paragraphs in the letter of intention are usually the ones that [Inaudible] because the one before last is about getting approval the of the Tokyo District Court for the transfer of the shares, which, actually we offered Brock to do for him, but he didn’t reply on this. So at this point, I never saw the approval of the Tokyo District Court and the last one was within 45 days of the LOI to negotiate and enter an agreement for the actual transfer of the shares, which didn’t happen either. So the last communication we had on this is, well initially we wanted to work with Brock and signed his LOI, sent it to our lawyers too. Our lawyers told us that this would have to go through the Tokyo District Court first. So the process would have been to, it was on a Friday, but to resend the LOI and send it to the Tokyo District Court. We were talking to the Tokyo District Court and they told us they would be able to give the approval by Monday and then sign it again, but date Monday. The person representing Brock Pierce at the time told us “Yes, no problem, we’re going to get you this back to you.” However, I didn’t get any reply after that. So the rescission letter for the LOI was never signed by Brock and we were never able to talk to the District Court about getting things approved. So there’s a period of silence after that. Peter McCormack: Yes. Mark Karpelès: And then when does Brock come back into the picture? Peter McCormack: Well, the first time I see him coming back into the Mt. Gox story was with the appearance of “Goxcorp”, which was an entity, which made some kind of PR in some news site and made a very lavish party for the Bitcoin 10 years with big golden Gox letters on a cake, ladies blowing the candles and stuff like this. That completely kind of feels framed to me. Mark Karpelès: But part of the people were there and shown on the video includes Brock Pierce. From there I didn’t, well he spoke about this and there were some videos of him talking on Twitter too, I believe. But it didn’t really take, I think most people didn’t really, feel about lavish party that was around this. A couple of months ago, then Gox Rising was created. With, once again Brock Pierce appearing and doing a talk about how Mt. Gox can just raise back from the ashes and everything. I guess that’s when he really came back in the picture and claimed he could revive Mt. Gox. I first met Brock in Las Vegas. I was there for World Crypto Con. I was invited to a meeting to announce new action by some of the creditors. So it was in a hotel room in Aria. I got up there and it was a DJ cocktail bar, booth babes with Bitcoin signs on, a very strange situation and then Brock came in. So it probably sounds similar to the one you had? Peter McCormack: Yes. That would be the “Goxcorp” event, which was managed I believe by some lawyer called Oliver Wright? Mark Karpelès: Yes. Who’s based out of Los Angeles. Peter McCormack: Actually he contacted me on Twitter at some point asking about 35,000 Bitcoin creditors, which I didn’t know about. So it took some time and digging at the Tokyo District Court to find out who it was. But I believe it’s about a person called Roman Hossain. I found the one press release about this also an internet. I actually looked at this claim but I couldn’t confirm it because at least a different number of Mt. Gox accounts with login names and none of those actually exist except the first one. Mark Karpelès: So back to Brock, he said to me his objectives were based around his love of Bitcoin. He feels that the story of Mt. Gox has harmed it. He feels like a better story can be told about Mt. Gox and wants to revive it. So that’s his goal 1. And his second goal was quite direct. He said he wants to make sure the Mark Karpelès doesn’t get any of the money out of the Mt. Gox liquidation and civil rehabilitation. So how’d you feel about both of his goals? Peter McCormack: Well, actually when Brock came to me, his first discussion was about how he could help me improve my personal image and make Mt. Gox a better story. When reading a little bit about it, I saw he wanted to do different things, relaunch Mt. Gox, issue shares as an ICO. So explanatory to me that he had already done this before ICOs are securities, so he’s finally got the experience to do it. Of course he didn’t tell me anything about trying to make sure I didn’t get anything. I didn’t raise the question because at this point know I wasn’t planning on getting anything. So that’s one subject that wasn’t talked about. Mark Karpelès: However, well based on what he said to me, actually he came into this very office and we talked. We talked about CoinLab too and he told me that he could probably get CoinLab to back down. He was not very friendly with Peter Vessenes and he actually got Peter Vessenes out of the Bitcoin Foundation and told me a few things about this. Since we didn’t know yet who was a big creditor in the Mt. Gox bankruptcy. Well, I had a very good idea it most likely was CoinLab. But I wasn’t sure they actually made a $16 billion claims, that sounded maybe too much even for Peter. So I think maybe we can go to the court and I confirm tell you if it was Peter or not. We just leave this office and went to the court, I asked him actually to wait outside because only creditors or people related to the bankruptcy can go inside. It took up more than one hour or two hours to get the documents, but I could confirm at that time that CoinLab did indeed make a $16 billion claim, and just stepped out and told him. We just talked a little bit more and just parted ways. But then the next day, or maybe a few days later, I saw an article in a Bitcoin news website where Brock Pierce, was saying that he could revive Mt. Gox and how I was a bad guy and everything and that was quite different from his initial story. So I didn’t really trust, well I didn’t really trust him much to begin with. But that basically gave me the clear cut of well believing what he’s saying directly to me and what he’s actually saying outside, being completely different. From there it turned out that way more than just this story about what he was saying was false. So, of course, there was this claim of owning Mt. Gox, which, when he made it, I immediately replied on Twitter because someone asked me to confirm if it’s true. Actually, no. I mean we did have a LOI at some points that was on a lot of conditions of getting approval from the court and negotiating, getting an accurate agreement done. But this never went further than that. Well there’s actually so many things in this, like he usually wanted to file a new CR (civil rehabilitation) plan and then he says he’s not going to file a CR plan, but this website still says that he is still going to file a CR plan. There’s no way to know exactly what he really wants to do anymore. I’m not sure either. I would guess the ICO would be a goal that would bring of course, a lot of image and money in. So that sounds like the most, well critical part of everything as far as what he told me about what he wants to do and what I seen in the media. But for the rest, I’m actually really not sure. So what I don’t understand is obviously I wasn’t aware he had come here and had a meeting with you and you know, hearing you explain that now I’m trying to understand how he’s gone from talking to you about wanting to revive Mt. Gox and help you with your own personal image. A few weeks later he’s in an interview with me showing nothing but hatred towards you and wanted to make sure that you don’t get any money out of Mt. Gox. What’s happened in those few weeks do you think that’s made Brock change in that way? Peter McCormack: Well, I would guess what made him really changed his mind was the way we fought over Twitter. When he first posted about owning Mt. Gox, I know it’s not true. We had a few exchanges on this, he say something about not wanting to let me get $700 million, which I don’t really know where he got this from. I guess maybe from the bankruptcy, but I mean it’s not news anymore and it’s not true since middle of 2018. Mark Karpelès: From there, so I just, explain to him no, it’s not like this anymore, he went into more of this argument and him asking me who would be more fit to handle this civil rehabilitation. When there’s no need for this, the trustee is already in charge of this process and the Tokyo District Court is overseeing all of this and I believe it’s the most, neutral way to handle this issue rather than having someone just stepping, maybe with some kind of, goals like running an ICO, which obviously would be for profit purpose, I believe. So I don’t think anymore, that there’s anything Brock can bring into the bankruptcy. Most of the things I’ve seen announced that he could do, were things that were already done by other people or being done right now by other people. So if rewriting Mt. Gox history means just saying if everyone was saved thanks to Brock Pierce, I don’t think it’s a good thing, because well, a lot of people are involved in this, lots of people lost a lot with Mt. Gox. Many creditors are fighting very hard to try to make things, well to give this whole story a better ending. Improving Mt. Gox ending isn’t just some scenario writing and going into the news and just pushing a news story, it’s actually acting on everything creditors have been doing so far. Getting Mt. Gox into civil rehabilitation, getting sure they know about what’s happening, are very important parts of getting Mt. Gox in the right direction and just pushing well false information or giving people false hopes, is not the way of reaching its conclusion. It seems to me from your AMA and having spoken to you and this, it seems you’ve been humbled quite a bit by the process. Your intentions now only good. Do you think you’ve been misjudged or misrepresented? Peter McCormack: Well, that’s something… Well responding by myself to this is kind of difficult. I know a lot of people judge me very harshly, especially right up to the bankruptcy. I received I think before a lot of death threats and very unkind messages. But I had been working with creditors and with different people to try to get things in the good direction for the bankruptcy. I did actually have creditors thank me for helping things along and I believe my actions today are well speaking louder than anything I could say. So I still in any way going to continue to try to do whatever I can do to make sure the bankruptcy goes in a good direction, which means distributing as much as possible of the assets as fast as possible to as many creditors as possible. Mark Karpelès: Well, I obviously don’t have full control of the situation, but I can still help because I’m in Japan. I can, well I know what’s happening with the court. I do get some information on the process, so I make sure I can let creditors know as much as possible about what I can tell them. Well I tried to make sure, people like Brock, don’t take advantage of creditors by trying to sell them dreams, I mean, I don’t know of Brock’s full intentions yet, so I cannot say for sure. But based on the number of lies, the way he’s been acting, I don’t think there’s anything good for creditors going with Brock. Yeah. I found it quite interesting with the creditors as well. I mean, I haven’t spoken to many of them directly, but I did read the entire AMA and what was quite interesting is there was little to no ill will or anger towards you in that. I don’t know if this is time, like over time people just come a bit more relaxed or if people become a little bit more, I don’t know, they’re now judging 2014 with a fairer eye. Do you still get any kind of ill will towards you or are you tending to find that people are actually being kind of okay with you? Peter McCormack: Well, actually, I think time helped a lot, in well, helping people to heal and start to take some distance from everything that happened at the time. One of the creditors were very, very angry at me, even send me a message at the time, about how would kill me and cook my gut. Actually, he contacted me and say “I’m so sorry, I don’t want to hurt your gut any more.” I replied to him “It’s okay. No, you were angry.” He like sent me “thank you very much for forgiving me.” I mean people were at the time were obviously under a very, a lot of stress and it was a difficult situation for everyone. So I can understand some people would be angry and say things they don’t actually mean at the time. Mark Karpelès: Many of the people who just contacted me, either needed help, so I put them in touch with people that could help or I introduced lawyers in Japan explaining how to file claims, what was the deadlines. Even today when someone recently posted on Twitter are like, it’s too late to file a claim. I tell them maybe you can still, I mean the Trustee aside, they can still accept claims. So I tell them to just file and see what happens because if they don’t file anything, nothing will happen anyway. So that’s basically what I’m trying to do today. I’ve got, well compared to what I got in terms of messages at the time, I got much better feedback from people now. So tell me what’s going to happen over the next coming weeks and months. How does this all close out Mark? Peter McCormack: Well, right now the next step would be the creditors choosing a civil rehabilitation plan, which basically is going to say or define how this civil rehabilitation will proceed with the distribution and the end of life of Mt. Gox. While there’s no way to say for sure yet what plans will be submitted because the deadline is not passed yet. The deadline is on April 24th or 26th, I don’t remember exactly. Mark Karpelès: But starting that time I understand creditors have been working together with the Trustee to get a kind of master plan that we make sure everyone is happy and all creditors get as many Bitcoins as soon as possible. Well, the different kinds of things that could happen that would make this more difficult. One thing is I don’t know if any other creditors are planning to file plans and actually not only can creditors, anyone can find a plan. So it’s possible a sponsor out there will appear and just file a plan. That’s so unlikely because, you know, to get the plan approved, you need to get the creditors vote, which means you need to communicate with the creditors and have a good image with the creditors. So that’s one thing we don’t know yet and another issue with this is even if a plan is approved, the status of CoinLab and their $16 billion claim, could mean that we need to wait until this is solved, to move forward with any kind of distribution. Because if CoinLab’s claim is approved, then they need to receive $16 billion, which will means all creditors will get nothing. So the way the court goes, even if the CoinLab claim is obviously meritless they still need a final decision on this, so they cannot just say, yes, we know CoinLab is not a claim we need to care about. This is not something the court can say. They need everything to be black or white. Okay. Trying to think, five years forward now, let's hope this is all over. Let’s hope the CoinLab lawsuit has dropped. Let's hope all the creditors have received their distribution back. Where do you want to be in five years time? What do you want to be doing and what’s going to be coming next year? Peter McCormack: Well, for me personally I don’t think I’m going to be involved in cryptocurrencies anymore. I had enough of this, what kind of business! But there’s still many things I like to do and I mean, well, I can code and build things. I’m working right now at a new company, London Trust Media, building new things and working on new businesses for the future. At London Trust Media, we work on protecting people’s privacies, so we’re not that different from what Bitcoins do, but it’s slightly different ways of going to it. Mark Karpelès: You got any final comments or anything you want to say before we close out? Peter McCormack: Yes, I hope very much that CoinLab and Peter Vessenes just stop their claim. Once again I say to everyone, who was involved with Mt. Gox that I’m very sorry the way things went. I very much wish I could just go back and fix things. So Mt. Gox doesn’t just go away to it, but they only so much I can do, so I just continue helping and making sure everyone gets as much help as they can and the bankruptcy sees the distribution as soon as possible. Mark Karpelès: Well listen, I appreciate your time and thank you for this. Peter McCormack: Thank you very much. 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