Former Mt. Gox CEO Mark Karpeles ran into some trouble with the Japanese legal system, resulting in prosecutors to pursue a 10-year jail sentence foralleged embezzlement during his time at the now-bankrupt bitcoin exchange Mt. Gox. A report from The Mainchi on Wednesday stated that prosecutors claim Karpeles used clients’ funds for his own personal use.
According to the court indictment, Karpeles purportedly transferred 341 million yen (or $3 million) of clients’ money, which was kept in a Mt. Gox bank account, to his own, personal account during September–December 2013. The cash was taken for uses like “investing in a software development business for personal interest,” per the report.
Karpeles is also being accused of manipulating the data on Mt. Gox’s trading system to “fabricate the balance, while also playing a large role in “totally destroying the confidence of bitcoin users.”
Karpeles pleaded not guilty in the court to the charges of embezzlement and data manipulation back in 2017, while also denying such allegations at the time. Later in April of 2018, he 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 of 2014, claiming to have been hacked for 850,000 bitcoin, some of which, Coindesk reports, was later found. Since then, the case continues to be ongoing.
In July 2018, creditors began to feel victorious when issued an order to approve a petition to begin civil rehabilitation. Last month, the trustee of Mt. Gox, Nobuaki Kobayashi was looking to extend the deadline for filing claims from October to December instead.