Bitcoin

Mt. Gox Ex-CEO Denies Embezzlement As Trial Begins In Tokyo

Mark Karpeles, a 32-year-old French national, has officially pleaded not guilty in Tokyo District Court to the charges of embezzlement and data manipulation he faces in the aftermath of the collapse of his Bitcoin exchange, Mt. Gox.

Mt. Gox, once the world’s largest Bitcoin exchange, collapsed several years ago after hundreds of millions of dollars worth of Bitcoin seemingly disappeared into thin air after a hacking.

At its peak, Mt. Gox handled 80 percent of the world’s Bitcoin trades. It filed for bankruptcy three years ago after the 850,000 Bitcoin went missing. At the time, that Bitcoin amount represented a value of approximately half a billion U.S. dollars. Mt. Gox lost an additional $28 million in cash from its Japanese bank accounts.

Mt. Gox maintains that hackers were to blame for the lost Bitcoin, and that the hackers gained access to the digital currency through a security flaw in the system. The exchange was ultimately able to recover about 200,000 Bitcoin.

Karpeles is under indictment for transferring 341 million yen ($3 million) from a Mt. Gox account holding customer funds to an account in his name between September 2013 and December 2013. He is also charged with upping the balance of an account in his name in the Mt. Gox trading system.

Karpeles’ defense has argued the remittance was within the scope of the firm’s revenue and not the embezzlement of customer funds.

“I swear to God that I am innocent,” Karpeles said. He offered the sentiment in Japanese to the three-judge panel hearing his case.

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New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.

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