Mt. Gox Founder Mark Karpeles Acquitted Of Bitcoin Embezzlement

Crime, News | March 15, 2019 By:

Mark Karpeles, the CEO of the failed bitcoin exchange Mt. Gox, has received a suspended jail sentence after a Japanese court found him guilty on charges of data manipulation.

MtGox was shut down in early 2014 after 850,000 bitcoins – worth half a billion dollars at that time – disappeared from its crypto wallets. Roughly 200,000 bitcoins were eventually “found” and Karpeles and the company filed for bankruptcy on February 28, 2014.

In 2015, Karpeles was arrested by Japanese police on suspicion of having accessed the exchange’s computer system to falsify data on its outstanding balance, and was re-arrested and allegedly charged with embezzlement. In July 2016, he was released on bail, but was ordered to remain in Japan. On July 10, 2017, Karpeles pled “not guilty” to embezzlement and data manipulation charges.

On Friday, the Tokyo District Court convicted Karpeles for falsifying computer data but acquitted him over charges of embezzling millions from client accounts. Karpeles was sentenced to two and a half years in prison with a 4-year suspension, which means he won’t have to serve time unless he commits a criminal act in the next four years.

According to the court, Karpeles had “harmed the users’ trust greatly” by manipulating data and “abused his expertise as an IT engineer and his position and authority.”

“We find the charge of electronic record tampering to be true and that it deserves punishment, but there’s no criminal evidence re embezzlement (dominant or reserve type) or violations of company laws, resulting in a not guilty ruling,” the court said.

Prosecutors had claimed that Karpeles had pocketed some 341 million yen ($3 million) of client’s money and splashed it on a luxury lifestyle, as well as on overseas trips for his estranged wife. The judge, however, said that there was no financial damage done to MtGox and ruled that Karpeles did not intend to cause any damage.

“I am happy to be judged not guilty for embezzlement and breach of trust,” Karpeles said in a statement. “I will discuss with my lawyers and decide how to proceed on the remaining charge.”