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Mt. Gox Former CEO Mark Karpeles Could Likely Face A Jail-Term Of 10 Years

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Mt. Gox founder in trouble

Mark Karpeles, the former CEO of now-defunct Bitcoin exchange, Mt. Gox, could likely face a 10-year jail term for embezzlement. Japan’s local news publication, Nikkei Asia Review, reported that prosecutors want Karpeles behind the bars.

At the Tokyo District Court, the prosecutors claimed that Karpeles diverted the company funds to other ventures. Furthermore, they held Karpeles responsible for “destroying the confidence of bitcoin users.”

Karpeles Facing Charges of Embezzlement

Currently, Mark Karpeles is facing accusations for the embezzlement of 340 million yen worth funds belonging to the clients. Also, the prosecutors claim that Karpeles deposited these funds in a bank account belonging to the defunct bitcoin exchange Mt. Gox.

Furthermore, Kapelese is likely to have transferred these funds in the period between September and December of 2013. Also, the prosecutors claim that Karpeles manipulated the exchange’s trading system to gather more balance in his kitty.

However, during the trial, Karpeles confessed that he didn’t embezzle the funds. Instead, the money transferred was just a temporary loan. However, in a rebuttal, the prosecutors said that no official paperwork was done by Karpeles to prove his claims.

“There was no documentation of loans and there was no intention of paying back,” the prosecutors said. There are also allegations that Karpeles used these funds for self-purpose that includes “investing in a software development business for personal interest.”

Mt. Gox Exchange Hack and Things Around It

Mt. Gox, once the largest Bitcoin exchange on the planet has to shut down operations in 2014 after getting hacked losing 850,000 BTC, then worth 48 billion yen. At that time, Karpeles called this theft as a result of the bug in the platform’s software.

Since then there have been several conspiracy theories floating around the exchange’s hack. Several charges point to a foul play by Mark Karpeles.

Earlier this year, Karpeles apologized in a Reddit post for all that happened leading to the Mt. Gox’s bankruptcy. He said, “When I took over Mt. Gox, 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.”

Not only in Japan, but Karpeles is also facing legal troubles in United States with several lawsuits filed by the exchange’s former clients.

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