Mark Karpeles, former head of the collapsed bitcoin exchange M tGox, at one time the largest Bitcoin intermediary and the world’s leading Bitcoin exchange, has been convicted by a Japanese court.
The Tokyo District Court sentenced Karparles to a suspended jail sentence of two and a half years for date manipulation for his role in the disappearance of 850,000 Bitcoins, but acquitted the French one-time-IT-engineer of the charge of embezzlement.
Mt Gox filed for bankruptcy on 28 February 2014. Some 750,000 of customers’ Bitcoin had been lost along with 100,000 BTC of the exchange’s own funds — at the time equivalent to USD 473 million. Karpeles blamed the loss on internal fraud at the time. Over a year later, he was arrested by Japanese authorities and formally indicted for embezzling customer funds by November.
Japanese prosecutors were looking for a punitive sentence of up to 10 years for Karparles, so clearly the sentence passed down would have been a disappointment to investors affected by the affair. In Karparles’s defence, the District Court judge maintained that business owners often borrow funds without clear accounting, and felt that the ex-owner had every intention of returning the funds. He added that no financial damage had been caused to the company as a result of the missing Bitcoin.
At one stage in the trial which began in 2017, Karpeles apologized to customers but stated:
“I swear to God that I am innocent.”
He claimed that he had found 200,000 bitcoins later in a cold wallet unconnected to the company’s computers. “Most people will not believe what I say. The only solution I have is to actually find the real culprits,” he told reporters at his trial hearing in July 2017.
During his time on bail, Karpeles was active on social media, criticizing Bitcoin, until raising bail of JYP 10 million in 2016, pending trial.
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