BITCOIN

Ex-CEO pleads not guilty to embezzling Mt. Gox bitcoin, cash funds

TAGs: Bitcoin, Japan, Mark Karpeles, mt. gox

Mark Karpeles, the chief executive of the now defunct Mt. Gox bitcoin exchange, has denied the embezzlement charges slapped against him in connection with the disappearance of millions of dollars’ worth of virtual currency and cash.

Ex-CEO pleads not guilty to embezzling Mt. Gox bitcoin, cash fundsThe 32-year-old French national filed a not guilty plea on Tuesday at the Tokyo District Court in response to charges of data manipulation and embezzling a total of JPY341 million (US$2.98 million) in customers’ money between September and December 2013, Nikkei Asian Review reported.

After listening to the charges against him, Karpeles read out a prepared statement in Japanese, saying, “I swear to God I am not guilty.”

Karpeles made international headlines in 2015, when he was arrested in Tokyo on charges of unlawfully extracting and using private electromagnetic records. Japanese authorities said the man accessed Mt. Gox’s U.S.-hosted trading platform in 2013 and altered the data in his personal account twice.

Tokyo-based Mt. Gox was once the world’s largest exchange platform for bitcoin until it filed for bankruptcy in 2014, claiming it had lost 850,000 of its bitcoins, which are worth more than $450 million at the time, to hackers that exploited the site’s “transactional malleability.”

Japanese authorities slapped Karpeles with additional charges of embezzlement after investigators discovered the Mt. Gox executive transferred clients’ funds to other accounts. A good portion of the money, according to reports, were used to fund Karpeles’ personal expenses, including his rent and to pay for the women “he met at venues that offer sexual services.”

In their opening statement, prosecutors told the court Karpeles “managed the company assets and money entrusted by the company’s clients in the same bank account and failed to respond to requests by company associates to separate them.”

Karpeles apologized “for causing inconvenience to many clients” after Mt. Gox declared bankruptcy, telling the court that, “As a person responsible for MtGox, I have to recover the stolen bitcoins and determine where they are gone, but this trial is not aimed at finding the cause of bankruptcy.”

Current bitcoin price
The price of bitcoin dropped to $2,314.68 during Tuesday afternoon’s trading

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