Former Mt. Gox CEO Mark Karpeles Faces a 10 Years Sentence In Alleged Embezzlement Case

News and Analysis

Mark Karpeles, the former chief executive officer of now-defunct Bitcoin exchange Mt. Gox, faces ten years in jail over alleged embezzlement, Japanese media report on Wednesday, December 12.

According to a report from Nikkei, prosecutors claimed at the Tokyo District Court that Karpeles used customers’ funds for his own personal use.

According to the indictment, Karpeles embezzled a total of 341 million yen ($3 million) of customers’ money kept in a Mt. Gox bank account by transferring it to his own account between September and December of 2013. He also allegedly manipulated data on his company’s trading system to pad the balance.

Reportedly, Karpeles “diverted company funds to such uses as investing in a software development business for personal interest” and “played a great role in totally destroying the confidence of bitcoin users.”

Karpeles pleaded innocent in the first hearing of his trial in July 2017, saying, “I swear to God I am not guilty.”

Later in April of this year, the Frenchman apologized for the company’s bankruptcy, stating:

“I never imagined things would end this way and I am forever sorry for everything that’s taken place and all the effect it had on everyone involved.”

Mt. Gox officially filed for liquidation in April 2014 after claiming to have been hacked for 850,000 BTC, some of which was later found.

The case has been ongoing since then. In July 2018, creditors had a victory when the court issued an order approving a petition to begin civil rehabilitation. Next month, an online claim filing system was opened allowing Mt.Gox’s creditors to begin registering claims on the lost funds.

Last month, the trustee of Mt. Gox, Nobuaki Kobayashi, was seeking to extend the deadline for filing civil rehabilitation claims to December from the earlier deadline of October.

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