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Former Mt Gox CEO sets the record straight about his new venture; says AP missed the mark

Quick Take

  • Former Mt Gox CEO Mark Karpeles says the Associated Press mistakenly reported he had a “new bitcoin tech business”; a piece that was redistributed everywhere from the NYT to Japan’s biggest paper (and even The Block)
  • He says that far from being new, he set up the four-person company in 2016, after he was released on bail, realising he would struggle to find employment
  • Most importantly, Karpeles says Tristan Technologies is not a blockchain company. Instead, he says it has a wide mandate to provide cloud, security, and “legal-tech” solutions
  • The company already has reportedly 500 customers and is profit making, focused on capturing the Japanese market

Traditional news outlets made a rare venture into crypto world this week, reporting that Mark Karpeles – the former CEO of defunct exchange Mt Gox – had launched a “new bitcoin tech business.” It made for a comically ironic announcement, considering bitcoin was at the heart of Karpeles’ downfall in 2015. But, comical as it seemed, it appears some AP reporters at Japan’s Foreign Correspondents’ Club got their notes crossed (it happens to the best of us).

In fact, Karpeles told The Block there are a few falsities in need of clearing up:

It’s not a “bitcoin” or blockchain company

Counter to the AP’s claims that Karpeles was starting “a bitcoin company…around the same computer technology that led to his legal troubles”, he’s apparently steering clear of DLT (for now).

The French-native clarified that Tristan Technologies (named after the legendary Knight of the Round Table), is not a blockchain operation:

“We’re working on new cloud solutions but with absolutely nothing on blockchain right now…This is [just] a technology company,” he told The Block. “I don’t think it would make sense at this point to work in the blockchain and crypto industry.”

Still, nailing down what exactly the firm does is tricky. While the cloud service seems to be the core focus, there’s a much broader agenda. Karpeles mentioned plans for building “legal-tech” solutions like expediting visa applications, as well as simultaneously working on an “operating system [that] gets rid of the concept of installation and just runs the software.”

One way or another though, he claims, the firm’s output “is going to improve people’s lives a lot.” He said, “We’re getting technology to adapt to people rather than people having to adapt to technology…It’s going to redefine the level of security we expect from computers.”

Notably though, Karpeles did not rule out looking into blockchain one day.

“We may do things with the blockchain in the future but as of now there are no plans.”

It’s not a “new” company (just a new idea)

The other point in AP’s reporting Karpeles disputes is that the business is not “new, ” noting the firm has actually been around for nearly three years.

In July 2016, Karpeles was released on bail after being imprisoned for the disappearance of funds from Mt Gox (he has since been cleared of those charges). He said upon leaving detainment, he was “infamous” and couldn’t find work, so he quickly but quietly set up shop by himself, registering the new company in Japan and appointing himself CTO.

“It’s not new, we’ve just been underground. We didn’t want to be too vocal until after the judgement.”

Indeed, far from being new, it’s a pretty established setup, with Karpeles claiming there are already 500 customers for its cloud services, outlined here. The firm is also already reportedly profit-making, reporting on its website that it has 9 million yen (~$83,000) in capital.

Karpeles noted that the U.S. has so far dominated the cloud sector with leaders like Amazon, Google and Microsoft, while Japan still lacks a native option.

“[Cloud services] need players from all around the world. It’s not going to be easy, but to reach the moon you aim for the stars,” he said.

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Here’s what else we know:

He’s in business with his lawyer

Surprisingly, the lawyer who represented Karpeles in court, Nobuyasu Ogata, is Tristan Technologies’ CEO and President. 

Nobuyasu’s role may link to the firm’s so-called “legal tech” ambitions. Karpeles says Nobuyasu even came up with the idea for the company’s name.

Lean machine

The firm is a thrifty affair. It has just four fixed employees – including Karpeles and Ogata – as well as an unknown number of consultants who work part-time. 

Rather than seeking outside investors, Karpeles says the original set up was to work with very little money. He initially worked with no salary, self-funding until the firm began generating revenue. Now, Karpeles’ own role as CTO is to manage the engineering team and to “build the tech.”

He also noted there were currently no job openings because of “the budget,” but noted they would be “hiring this year.”

What’s next

Karpeles says the firm will launch a new operating system for improved security and quicker software integration “within the year.” There is no set date.

He says he plans to make this a “long term” project and it will “continue to make new services.”

Meanwhile, Karpeles is also conscious of another legal battle he is gearing up to fight, appealing his conviction for manipulating electronic data. He says the case is likely to begin later this year but does not “expect things to be quick” when it comes to the verdict. If convicted, Karpeles could face additional jail time.

Explaining the mix-up

One explanation for why reporters might have gotten the wrong end of the stick is that Karpeles was also at the club to promote a book that documents his downfall. He says his talk – like the book – explored the world of cryptocurrencies before he segued into a separate discussion about his company.

“I talked about what remains to be solved for crypto and blockchain – like adoption and having it as a payment method.”

Another reason reporters may have suspected the firm was “new” is that Karpeles has intentionally kept it under the radar while the trial was ongoing. He told Fortune in April last year he was “juggling four to five different IT consulting jobs,” omitting that he was in fact operating his own firm.

Fortune also reported that he was CTO of London Trust Media (LTM), which Karpeles says is now a client of Tristan Technologies. LTM told Fortune that Karpeles would be working on its “cryptocurrency ventures” alongside other products like its virtual private network. As such, he may not be totally removed from the space – even if it’s not the firms raison d’etre.