Home / Latest Bitcoin News / Prosecutors seek 10-year prison term for former CEO of bitcoin exchange Mt. Gox on embezzlement charges

Prosecutors seek 10-year prison term for former CEO of bitcoin exchange Mt. Gox on embezzlement charges

Prosecutors have sought a 10-year prison term on charges of embezzlement for the former CEO of Mt. Gox Co., once the world’s largest bitcoin digital currency exchange, officials announced Wednesday.

Prosecutors told the Tokyo District Court that Mark Karpeles, 33, “diverted company funds for such uses as investing in a software development business for personal interest” and “played a great role in totally destroying the confidence of bitcoin users.”

Karpeles, who was born in France, pleaded innocent in the first hearing of his trial in July 2017.

“I swear to God I am not guilty,” he said, reading out a prepared statement in Japanese.

According to the indictment, Karpeles embezzled a total of ¥341 million ($3 million) of customers’ money that was kept in a Mt. Gox bank account by transferring it to his own account between September and December 2013. Karpeles also allegedly manipulated data on his company’s trading system to pad the balance.

In February 2014, Mt. Gox suddenly halted all transactions, stoking panic among its customers across the globe. It then announced that it had gone bankrupt after having lost about 850,000 bitcoins, worth an estimated ¥48 billion at the time.

Mt. Gox claimed the bitcoins were likely stolen by hackers.

Last June, the Tokyo court issued an order to commence civil rehabilitation proceedings for Mt. Gox, halting its bankruptcy proceedings.


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