Disgraced former Mt Gox CEO, Mark Karpeles learned his fate today as a Tokyo court handed down its verdict on embezzlement charges. French-born Karpeles has been convicted for falsifying computer data but acquitted over charges of embezzling millions from client accounts. The Tokyo District Court handed down a prison sentence of two years and six months, suspended for four years, meaning Karpeles will not serve jail time.
In February 2014, Mt Gox, at the time, the largest Bitcoin exchange in the world, was hacked and 850 000 Bitcoin went missing. Karpeles reported the theft to the Tokyo police, who after a long investigation, concluded that he must have stolen the funds himself.
Karpeles was first arrested in August 2015 on suspicion of having accessed the exchange’s computer system to falsify data on its outstanding balance. During the typical 23 days of detention allowed under Japanese law, they tried to make him confess to hacking the exchange, but he would not. He was later re-arrested and charged with embezzlement. He was released on bail in 2016 but told to remain in Japan.
Money Spent On Unnecessary Purchases And Personal Expenses
Prosecutors claimed Karpeles spent the embezzled money on a 3D printing software business, something Mt Gox did not require. As well as arranging overseas jaunts for his estranged wife, it’s claimed he spent the money on personal expenses such as utility bills and cleaning services at his luxury apartment.
Satoshi Mihira, attorney at Mizuho Chuo law firm said: “If it was an outside hacker who stole the currency, it’s a problem. But if he stole even part of the money, it would be embezzlement. His defence counsel needs a high level of evidence to win an innocent verdict”.
The odds were not good for Karpeles as the majority of cases that come to trial in Japan end in a conviction. “If he’s found guilty, it is possible he will get a jail term considering the significant money losses [suffered by customers]”, said Mihir before the verdict.
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