Japan Court Sentences Suspended Jail Term to Ex-Mt. Gox CEO

Cornelia Mascio
Marzo 17, 2019

Mt. Gox was the largest bitcoin exchange from 2013-2014, handling nearly three-quarters of the total global bitcoin transactions.

The court handed down a sentence of 30 months (prosecutors wanted 10 years), but the sentence is suspended.

Mt. Gox was the original Bitcoin exchange, transformed from a website that sold Magic: The Gathering playing cards to the largest Bitcoin exchange in the world, with over 80% market share. Specifically, the court found that Karpeles had mixed personal finances with that of the exchange, possibly as a way to hide the exact amount stolen by hackers. It eventually came to light that Mt. Gox had created bots to drive up the price in November 2013 in an effort to earn back the Bitcoin that had been lost.

Karpeles says the bitcoins were lost due to an external "hacking attack" and later claimed to have found some 200,000 coins in a "cold wallet" - a storage device not connected to other computers.

The exchange shut down in February 2014, ushering in a slew of legal actions as users sought to get compensation.

If Mark Karpeles - CEO of Mt.Gox Is Innocent, Who Stole The Funds?

The French businessman was found guilty on charges of record tampering, and was subsequently granted a suspended jail sentence for two and a half years.

"When buying Mt. Gox I should have had people around me to advise me and help with the management starting with the Mt. Gox transfer contract".

A Tokyo District Court has ruled that Karpeles is not guilty of embezzlement, erasing any chance that the suspected shyster would spend any significant time behind bars. He is likely to avoid prison, unless he commits another crime in the next four years.

According to the court, Karpeles had "harmed the users' trust greatly" by manipulating data and "abused his expertise as an IT engineer and his position and authority".

As reported by the publication, the court said there was "no criminal evidence of embezzlement", but the "charge of electronic record tampering is true and deserves punishment".

Still, Mark Karpeles has to feel good about this verdict. Japan boasts an insane 99 percent conviction rate, and the country is known for its severe treatment of prisoners.

Karpeles spent 11 months in Japan prisons and has claimed he was interrogated by Japanese for 50 days straight following his arrest.

Do you think the conditional sentence on the former Mt. Gox CEO is an indication he did not have a hand in the fall of Mt. Gox?

Images courtesy of Shutterstock, Channel News Asia, and Fortune.

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