Mt Gox CEO Mark Karpeles Implicated in Silk Road Trial
Today in court, a witness from the US Department of Homeland Security claimed that Mark Karpeles was once suspected to be Dread Pirate Roberts.
UPDATE (16th January 01:13 GMT): Mark Karpeles has denied claims he operated Silk Road Marketplace.
The trial of alleged Silk Road ringleader Ross Ulbricht heated up today during the questioning of a US Department of Homeland Security (DHS) agent by the defense team, led by Ulbricht's lawyer Joshua Dratel.
The DHS witness, agent Jared DerYeghiayan, reportedly claimed that Mark Karpeles, former CEO of the embattled bitcoin exchange Mt Gox, was once suspected to be the online black market's mastermind, Dread Pirate Roberts.
Reporters from the courtroom took to Twitter to address his claims; two suggested that the defense team is building a case to argue Karpeles is actually the "real mastermind" behind the Silk Road.
WIRED reporter Andy Greenberg, who has closely followed the Silk Road case and was present in court today, referenced the suspicions brought up in court:
DHS agents strongly suspected at one point Mt. Gox CEO Mark Karpeles was Silk Road's Dread Pirate Roberts...more to come when we adjourn
— Andy Greenberg (@a_greenberg) January 15, 2015
This statement was corroborated by a tweet from VICE reporter Kari Paul, who has been in the courtroom since the trial began on Tuesday:
Defense in Silk Road trial arguing Mark Karpeles, CEO of Bitcoin exchange Mt. Gox, was the real mastermind behind Silk Road.
— Kari Paul (@kari_paul) January 15, 2015
Just a theory?
While it's unclear whether Ulbricht's lawyers plan to use the DHS agent's suspicions of Karpeles in their strategy, Greenberg made a point to clarify that the defense team has made no such claims yet:
To be clear, everyone, defense has NOT made the argument Mark Karpeles was DPR, instead got a DHS agent to admit he was a suspect
— Andy Greenberg (@a_greenberg) January 15, 2015
It appears that other reporters in the courtroom perceived the claims as an argument from the defense that Karpeles – not Ulbricht – is Dread Pirate Roberts. Forbes reporter Sarah Jeong tweeted about the defense's "theory":
Defense's alternative theory seems to be that MARK KARPELES OF MT GOX and one other were the real DPR. #SilkRoadTrial
— Sarah Jeong (@sarahjeong) January 15, 2015
During his cross-examination by Dratel, it was apparently revealed that DerYeghiayan wrote emails about his suspicions of Karpeles as far back as 2012.
In one such email, DerYeghiayan appeared to note that Karpeles' motive for running the Silk Road could have been to control the price of bitcoin to benefit his exchange, Mt Gox:
Karpeles denies involvement
Tokyo-based Karpeles himself later responded on Twitter, with a denial:
Followers responded to Karpeles' newfound interactivity to fire questions at him about Mt Gox and its missing bitcoins. Karpeles answered that he still does not have the answers, and regards himself as much a victim of the alleged hack as Mt Gox's customers.
Karpeles later sent an extended statement to Motherboard, noting the Silk Road investigation had already concluded itself that he was not the ringleader.
"This is why I am not the one sitting during the Silk Road trial," he said, suggesting that Ulbricht's defence team was merely trying to divert attention from its own client.
"I have nothing to do with Silk Road and do not condone what has been happening there. I believe Bitcoin (and its underlying technology) is not meant to help people evade the law, but to improve everyone's way of life by offering never thought before possibilities."
To clarify further, he wrote that a domain called silkroadmarket.org was registered by a customer of KalyHost.com, a service of his company and Mt Gox parent Tibanne.
The trial commenced on 13th January, where in his opening statement Dratel said Ulbricht was the creator of the Silk Road. He argued, however, that Ulbricht ultimately handed off responsibility to another entity, who framed him once law enforcement began to investigate the online black market.
STORY CONTINUES BELOW
As such, the news of Karpeles' implication in the trial is just the latest twist in what has already proven to be a case filled with surprising revelations.
CoinDesk will continue to monitor this developing story.