Mark Karpeles was the accidental emperor of bitcoin, a hapless geek who, as much to his own surprise as others', became the most powerful lord of digital cash. During his reign, bitcoin, the leading form of virtual currency, rose in value from approximately a quarter to more than $1,200. The Wall Street Journal estimated that at one point Mt. Gox was processing 80 percent of all bitcoin transactions in the world. At its peak, the company traded more than $4 million a month.



RollingStone recently published a report that tells the whole story behind the demise of Mt Gox.



In February 2014, it was discovered that a half-billion dollars worth of bitcoins simply vanished from Karpeles' exchange, leaving customers around the world unable to withdraw their funds. It's the largest online heist in history. (Estimates vary on the exact amount. Many have reported $450 million; Karpeles says it could be as high as $650 million.)



The Japanese police arrested Karpeles for allegedly padding his digital accounts with $1 million worth of fake bitcoins and fleecing another $8.9 million from Mt. Gox customer deposits. He's still being investigated for what, if any, role he had in the disappearance of the half-billion in bitcoins.Karpeles, over several months of interviews, denied culpability. "A lot of people seem to think that someone at Mt. Gox was evil," he says. "I know that I didn't steal anything. I mean, if I had, like, $650 million in bitcoin, or even a fraction of this, I wouldn't be here."



He was first introduced to bitcoin when a customer in Peru told Karpeles he was having trouble getting a credit card and asked if he could pay with bitcoins instead. Though it has real value (with a current exchange rate of around $250), bitcoin exists electronically. There's no paper, no coins, no bank to charge transaction fees or government to control the flow. Intrigued, Karpeles became an early adopter of the currency. He found purpose and community among bitcoin faithful such as Jed McCaleb, a young American who'd recently launched his own bitcoin exchange, Mt.. Gox was originally a site McCaleb had made for people to exchange Magic cards (thus the name - Magic: the Gathering Online Exchange, or Mt. Gox for short). But by July 2010, he'd devoted it to bitcoin instead, setting it up as the currency's first online brokerage: processing purchases and holding customers' money. By taking a small commission on trades, Mt. Gox was set to bring in $100,000 its first year, Karpeles says. But there were setbacks, like when a hacker stole $45,000 worth of virtual currency. By March 2011, McCaleb wanted out.



According to Karpeles, McCaleb, who he'd become familiar with online, asked him if he'd want to take over Mt. Gox. All he asked for in return was a 50-50 split of the profits for the first six months, and a 12 percent stake in the future. "I basically got it for free," Karpeles recalls. (McCaleb declined to comment.) At the time, with only about 1,000 people using the exchange, Karpeles hardly expected to get more than ramen money. But he figured it would be "a new adventure."



But Karpeles' burgeoning empire would soon take a massive hit. On June 18th, someone claimed to have hacked into the Mt. Gox computers and was putting its files up for sale. Customers began to notice bitcoins mysteriously disappearing from their accounts. Karpeles took to Twitter and Reddit to reassure the nervous bitcoiners that, in fact, the problems affected only a handful of users. "Trust me," he wrote, "if we had a problem in Mt. Gox and it was actively exploited, we'd have way more than a dozen compromised accounts."



Yet the next night, Karpeles awoke to an urgent call. The price of bitcoin was crashing. Around 2 a.m., he discovered a hacker was cashing out thousands of bitcoins, and thus plummeting the price from $17 per bitcoin to less than a penny. "Someone's cashing out the motherlode on mtgox!" one person posted on the forums. Karpeles quickly moved $7 million in bitcoins on the site to another server and temporarily shut down Mt. Gox before more damage could be done.



These were just the first of many warning signs Karpeles seemed to ignore. Still, the company, and currency, survived the early hacks and continued to boom. Karpeles expanded to dozens of employees and moved to Google's former office building in Tokyo.



By 2013, Karpeles felt like he was achieving his lifelong dream of reaching computers around the world. But while he was enjoying his newfound wealth, the feds suspected his hands might be getting dirty in something nefarious: running Silk Road. In April 2012, investigators were able to identify Silk Road bitcoins being laundered on Mt. Gox. And by that summer, the lead investigator, Jared Der-Yeghiayan, had zeroed in on "a good target," as he later put it: Karpeles.



On May 9th, investigators filed an affidavit to seize $2 million from Karpeles' U.S. bank accounts for allegedly operating an illegal money-transfer business. By doing this, Karpeles' U.S. business would effectively be shut down. (In a bizarre twist, the investigator who filed the affidavit was later revealed to be Shaun Bridges, one of two Silk Road investigators who broke bad while tracking the site's elusive founder, known as Dread Pirate Roberts. Bridges, a Secret Service agent, had moved $820,000 in stolen bitcoins on Mt. Gox, and some speculate that he ordered the seizure in an attempt to erase traces of his own misdeeds.)



On February 7th, 2014, Mt. Gox announced it was suspending all withdrawals. The decision sent bitcoin value dropping more than eight percent and created panic online. The crash showed the power of Mt. Gox - and just how vulnerable the currency was to the company's troubles. "It was the only exchange," says prominent bitcoin investor Barry Silbert, "but it was one of the worst-run businesses."



After two long weeks without any new information, customers logged on to Mt. Gox on February 24th to find the most nightmarish thing of all: a blank page. Their worst fears were confirmed when a note appeared on the site. A "decision was taken to close all transactions for the time being," it read.



According to Karpeles, the problem stemmed from what's called a "transaction malleability," a software flaw that allowed people on the outside to manipulate the bitcoin transactions and steal money from the exchange. At first, he tells me, he had no idea how much bitcoin was missing, but the deeper he dug, the worse it became: By his estimate, $650 million in bitcoins were gone. "It really felt unreal," he recalls late one night in a subterranean Tokyo bar. "I don't know how to describe that. When you get a hospital operation without any anesthetic, it hurts at first, but at some point the pain reaches a point where you don't feel anything anymore."



As Mt. Gox's collapse made headlines, it wasn't just the future of bitcoin cast into doubt, but Karpeles' role in the debacle. Suspicions rose that March when the company announced it had found 200,000 bitcoins in a forgotten digital wallet - the equivalent of forgetting $125 million in gold you left under a mattress.



"This isn't something you could accidentally misplace," says Jay Edelson, an attorney representing the 600,000 North American Mt. Gox customers in a class-action suit. Investigators hope to recover the missing bitcoins, a difficult task in an age when someone can hide half a billion dollars on a thumb-drive. "Someone has hundreds of millions of dollars in bitcoin that has not been returned," says Edelson, "and it is out there in the universe."



Karpeles, as of this writing, is still being questioned by Japanese investigators and has not yet been charged with any crimes. He has admitted to reporters that he did create fake bitcoins, but only as "a test" for new software, not with the intent of making himself rich. He has also said he will "of course deny" any charges that may come. So what does he say really happened at Mt. Gox? When I last saw Karpeles at his townhouse in May, he told me he suspected that perhaps someone within the company was the victim of a phishing attack, which allowed an outside hacker access to the Mt. Gox database. "I don't know if there was inside help or not," he says. "I still believe it's very likely someone from the outside coordinated the operation."



The report concluded stating that there can be, however, two possible conclusions that either he is the greatest criminal mastermind of the digital age or an overeager chump who got in way over his head, and, perhaps, resorted to the most desperate means to get out. But whether he's found guilty or innocent, he's not done dreaming yet. He hopes to take the lessons he's learned at Mt. Gox and create a more secure form of digital cash: "I still want to be on every computer in the world."