There has been a new development in the Mt Gox case after Japanese prosecutors decided to charge Mark Karpeles for embezzlement. The charges were filed earlier today after over a month long investigation since his arrest on August 1, 2015.
Mark Karpeles was the owner and CEO of now defunct Mt Gox bitcoin exchange. Mark was being investigated for his role in the collapse of Mt Gox that led to loss of millions of dollars worth of bitcoin. During the course of investigation, it was discovered that Mark Karpeles was responsible for altering bitcoin balance information on exchange’s computer. He was also investigated for embezzling funds belonging to the exchange users after he allegedly transferred funds from Mt Gox to other companies he owned.
The initial arrest was over claims of altering exchange data and unauthorized transfer of funds. He was then released only to be arrested again. The second arrest was over claims that he illegally gained over $2.7 million by pocketing funds/bitcoins belonging to Mt Gox users for his personal gains. So far, Mark Karpeles was held without any formal charge as allowed under Japanese law. Japanese law allows law enforcement authorities to detain and question suspects for a period of 6 weeks without filing charges.
Until early 2014, Mt Gox was considered as one of the largest bitcoin exchanges in the world. At one time, it was responsible for handling almost 80 percent of total bitcoin transactions happening across the bitcoin network. However, due to sheer mismanagement and alleged security lapses, the exchange lost over 850,000 bitcoins valued close to $500 million at that time. It was claimed that the entire bitcoin deposit was stolen during a hacking attack. However, Mark Karpeles recovered a part of it on a later date, allegedly from cold storage that was left untouched by hackers.
Now that Mark Karpeles has been charged, we have to wait for the outcome of any court proceeding that follows to know whether he will go into a slammer or get out of this mess as a free bird.