Former Mt. Gox CEO Mark Karpeles has been under investigation by Japanese authorities since February of 2014 and is soon expected to face charges of fraud at Mt. Gox. A new report in Japan has been released and can be seen in its entirely (in Japanese) here. A general, but not exact translation is available here.
Mt. Gox (Magic: The Gathering Online Exchange) collapsed in spectacular fashion in February of 2014 after several months of internal mismanagement, all under the stewardship of Mark Karpeles. Ever since that time, the Metropolitan Police Department in Japan has been working on cracking this case and they look to charge Karpeles with fraud shortly.
According interviewed officials within the investigation, the former CEO of Mt. Gox looks to face legal counts related to fraudulently creating and using private electromagnetic records. These were allegedly used by Karpeles to manipulate the exchange and increase the actual balances of phony Bitcoin accounts. This would indicate that there were actually fewer btcoins than originally thought in the exchange.
The officials believe the CEO misappropriated deposited funds by covering incoming bitcoin buy orders with fake accounts. The Metropolitan Police Department may end up charging Karpeles with corporate embezzlement.
Karpeles’ stated account of the collapse has been that cyber attacks by hackers were the reason for the loss of as many as 700k bitcoins, which at the time was worth approximately US$420 million. If these new allegations are true, many of the accounts and amounts were frauds of Karpeles’ making. Now Japan looks to begin a precedent of their first-ever criminal case brought forth for potential crimes within the digital currency realm.
In April of 2014, Japan’s District Court ruled to commence bankruptcy proceedings. Then Karpeles was summoned by a US judge to appear for questioning in Dallas, Texas for a potential extradition. He has remained in Japan ever since.
At its peak, more than two-thirds of all Bitcoin transactions ran through Mt. Gox’s exchange.
Follow us on Facebook