MtGox's Karpeles denies involvement in Silk Road

A MtGox-affiliated service hosted a marketing site for the online bazaar, Karpeles said

The marketing site for Silk Road, silkroadmarket.org, circa March 4, 2011, as captured by Archive.org

The marketing site for Silk Road, silkroadmarket.org, circa March 4, 2011, as captured by Archive.org

Mark Karpeles, the former head of failed Bitcoin exchange MtGox, has denied involvement in the Silk Road online marketplace following allegations that he was its mastermind, but admitted the bazaar's marketing website was hosted on a MtGox-affiliated service.

"This is probably going to be disappointing for you, but I am not Dread Pirate Roberts," Karpeles wrote in an email, referring to the character who was the kingpin behind Silk Road, where drugs and other contraband were trafficked. "I have nothing to do with Silk Road and do not condone what has been happening there."

In the trial of accused Silk Road mastermind Ross Ulbricht at the U.S. District Court for the Southern District of New York, defense lawyer Joshua Dratel reportedly suggested people including Karpeles might have controlled the site, apparently to manipulate the value of Bitcoin, the currency accepted on Silk Road.

"I can only feel defense attorney Joshua Dratel (is) trying everything he can to point the attention away from his client," Karpeles wrote, adding that U.S. investigation had already eliminated him as the person behind Dread Pirate Roberts.

Karpeles added, however, that a website used to market Silk Road, Silkroadmarket.org, was hosted by KalyHost.com, a Web service run by Karpeles' company Tibanne, the Tokyo-based parent of MtGox.

"The site Silkroadmarket.org was indeed hosted on KalyHost according to our records," he wrote.

Karpeles would not reveal who registered Silkroadmarket.org, citing Tibanne privacy policies.

"The domain expired one year after being bought without being renewed and we never had any further order from that customer," he wrote. "I do not believe law enforcement ever asked us about this."

Karpeles was responding to questions including one about what appear to be online records of Whois lookups that show Silkroadmarket.org and MtGox.com were both hosted by KalyHost.

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Tim Hornyak

IDG News Service
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