Rambo Tribble writes: Reuters reports that Mt. Gox employees began to question the handling of funds at least two years ago. Although only CEO Mark Karpeles had full access to financial records, a group of a half-dozen employees began to suspect client funds were being diverted to cover operating costs, which included Karpeles' toys, such as 'racing version of the Honda Civic imported from Britain'. Employees confronted Karpeles in early 2012, only to be given vague assurances with a "pay no attention to the man behind the curtain" ring. Unfortunately, since Mt. Gox was not regulated as a financial institution under Japanese law, it is unclear what recourse might be gained in pursuing this question.
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