Mark Karpeles, the former CEO of Mt. Gox, the most popular Bitcoin exchange platform, is back in the spotlight because of the latest court developments. According to the latest reports, the CEO could end up serving 10 years in prison for embezzlement of customers funds.
Mt. Gox aka Magic: The Online Gathering Exchange was initially a platform for trading “Magic: The Gathering” cards. It was then re-modified to be a Bitcoin exchange, which enabled Bitcoin to US Dollar trade, by the owner, Jed McCaleb, founder and CTO of Stellar.
Soon after the inception of the Bitcoin exchange, McCaleb transferred the ownership to Mark Karpeles in 2011, who went on to become the biggest shareholder and the CEO of the company.
Under the aegis of Karpeles, Mt. Gox began its journey to become the biggest Bitcoin exchange which controlled over 70% of the cryptocurrency’s transactions around the globe. Additionally, the exchange is hailed to have played a pivotal role in driving the adoption of Bitcoin, however, there are reports that the company indulged in illegal activities to achieve the same.
The company soon crumbled due to a hack in 2014, which resulted in the loss of over 7% of Bitcoins that were under circulation. This hack is remarked to be the biggest hack in the history of cryptocurrency. Following this, Karpeles filed for bankruptcy, and the exchange shut down their operations. Soon after the filing, Mt. Gox announced that it found Bitcoins in their old cold wallets, which are now used to pay back the creditors.
The following year, in the month of August, Mark Karpeles was arrested by the Japanese authority under the suspicion of embezzlement of $3 million of customers’ funds and manipulation of the computer systems. Additionally, the CEO is also accused of misappropriating investors funds, transferring them from Mt. Gox account to his personal account.
This was followed by Karpeles pleading not guilty in the accusations in 2017, stating, “I swear to God I am not guilty”. However, according to The Mainichi – A Japanese Newsportal, the prosecutors have concluded to a jail term of over 10 years. At the Tokyo District Court, the prosecutors stated:
“Diverting company funds to such uses as investing in a software development business for personal interest; played a great role in totally destroying the confidence of bitcoin users.”
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