The CEO of now defunct infamous bitcoin exchange, Mt Gox is now accused of misusing over $8.9 million in customers’ deposits. Mark Karpeles was arrested in Tokyo last Saturday over a series of fraud allegations.
The French born bitcoin entrepreneur, Mark Karpeles had bought Mt Gox from the well-known bitcoin and cryptocurrency developer Jed McCaleb in 2011. He has been leading the exchange since he bought it until it collapsed in 2014. Soon after Mt Gox changed hands, troubles began. The first security breach was reported within months of acquisition. The ultimate meltdown of Mt Gox in 2014 resulted in its users losing over 850,000 bitcoins totaling $450 million during that time. The reason behind the downfall is attributed to a combination of mismanagement, theft and fraud.
While Mark Karpeles declared on a later date that he was able to recover about 200,000 bitcoins from a cold vault, the main cause of disappearance hasn’t been ascertained yet. However, the recent developments, may lead to some answers.
Mark Karpeles was arrested by the Japanese cops investigating Mt Gox incident on suspicions of fraud. He is suspected of manipulating data on the exchange’s systems to artificially inflate the value by $1 million in bitcoins. According to the Japanese media, he was produced before the Tokyo District Public Prosecutor on Sunday for further questioning.
In a recent development, Mark Karpeles is now suspected of spending close to $9 billion belonging to Mt Gox users illegally. According to unconfirmed police sources, Mark Karpeles may be rearrested for suspected professional embezzlement. He is suspected of using the funds for private purposes and transferring it to other companies owned by him.
As investigations continue, those invested in Mt Gox are now demanding answers. They are requesting the investigating agency to make the data publicly available so that it can be analyzed by hackers across the world to understand what happened at Mt Gox, speeding up investigation in the process.
Image source: AFP