Mark Karpelès, the former chief of Mt. Gox, the bitcoin exchange that was among the world’s biggest collapses, isn’t likely to face prison time after winning a not-guilty verdict for the more serious charges against him in a Toyko District Court.
According to a report in The Wall Street Journal, the executive was found not guilty on the more serious charges, although he was found guilty of producing illegal records. The court, which is made up of a three-judge panel, didn’t find him guilty of embezzlement or using his role at Mt. Gox for his own financial and personal gain. After losing 850,o00 bitcoins valued at around $470 million in February of 2014, the exchange went under. Karpelès didn't face charges for the loss of the bitcoins. In the summer of 2017, a U.S. indictment charged Russian citizen Alexander Vinnik of hacking Mt. Gox and laundering the digital tokens through online exchanges. He was arrested back then and a legal fight to bring him to the U.S. has been going on since then. Vinnik, through a lawyer, has said he’s innocent.
For Japanese prosecutors, the ruling, which came down Friday (March 15), was a bad defeat since they spent years going after the more serious crimes alleged to be perpetrated by Karpelès. Prosecutors were looking for a prison term of ten years for the former Mt. Gox executive, but instead, he won’t have to go to prison if he behaves properly for the next four years. He was sentenced to two years and six months in prison. The Wall Street Journal noted that while it’s not common for judges to exonerate defendants completely, the courts in Japan are known for having judges that issue verdicts that rebuke prosecutors if the judges think they’ve gone too far. That, noted The Wall Street Journal, was the case with the Mt. Gox executive.
In the ruling Chief Judge Tomoyuki Nakayama said no financial damage was done to Mt. Gox and that Karpelès wasn’t intentionally trying to cause harm to the company or guilty of embezzlement. Meanwhile, Judge Nakayama said it’s common for owners of small firms to borrow funds from the company without taking into account proper accounting rules. The Judge said it can be assumed that he planned to return the money he took for his own use. After the ruling Karpelès told the WSJ he is “grateful that the judges accepted my claim that I didn’t steal money from customers.”