Japanese prosecutors have charged the former founder and CEO of bitcoin exchange Mt. Gox with embezzling the money of clients. He faces up to 10 years in prison if convicted.
Mark Karpeles was arrested by police in Tokyo last month, 17 months after Mt. Gox filed for bankruptcy with losses of tens of millions of dollars.
Tibanne Mark Karpeles, CEO of Mt. Gox, in a company handout photo.
Karpeles is suspected of moving money from the accounts of clients into the accounts of his own company, reported Japan’s Kyodo News.
While it’s too early to know the specifics of the prosecution case, Karpeles’ odds are not good now he’s been charged. Japan has a conviction rate of roughly 99 percent.
Mt. Gox was one of the most visible signs of the bitcoin bubble that captivated the tech industry in late 2013 and early 2014.
At a time when the price of bitcoin jumped from around $118 to almost $1,000 over the period of two months, Mt. Gox emerged as the world’s largest bitcoin exchange.
Many were interested in the quick riches that bitcoin seemed to offer, but the collapse of Mt. Gox underscored the lack of control and regulation in the market and helped to cool excitement for the electronic currency. Today, one bitcoin can be bought for about $240, according to Coin Desk.
Before his arrest in August, Karpeles had denied any wrongdoing at his company.
“While I believe I did everything I could do to prevent this from happening, it still happened,” he told the IDG News Service in an interview last November, blaming hackers for the loss of bitcoins that led to the company’s collapse.
At the time, 850,000 bitcoins were thought to have been lost, but Mt. Gox later said it had “found” 200,000 of them.