Mark Karpeles, former CEO of the infamous bitcoin exchange Mt. Gox, may spend up to 10 years in prison for embezzlement.
Prosecutors at the Tokyo District Court sought a 10-year sentence for Karpeles on December 12, citing how the 33-year-old used Mt. Gox for personal investments. Prosecutors also told the court Karpeles “played a great role in totally destroying the confidence of bitcoin users.”
Karpeles, who stands accused of embezzling about $3 million worth of Mt. Gox users’ money, has been out on bail and living in Tokyo after spending 11 months in prison (BREAKER spoke to him recently and he was lying low, worried for his security). He’s previously pleaded not guilty to embezzlement and data manipulation for his acts as the CEO of Mt. Gox.
Meanwhile, people who lost their bitcoin to the exchange have been filing claims to get their money back, and one U.S.-based Mt. Gox customer has put forward a class action lawsuit claiming Karpeles was “responsible for the loss of more than $400 million from users on the exchange through either gross negligence or outright theft.”
Karpeles purchased the bitcoin exchange from its creator, Jed McCaleb, in 2011, turning it into the largest crypto exchange of its time. About two years later, the exchange was processing 80 percent of all bitcoin transactions across the globe. The company filed for bankruptcy in February 2014 in Japan, and the next month, also filed for bankruptcy in the U.S. Karpeles’s first arrest took place in Japan on August 1, 2015.
Talking with BREAKER in October, Karpeles said he believes he will be found guilty of embezzlement and data manipulation. “I declared at the beginning of the trial I am innocent of the charges brought against me,” he said. “But the fact is I’m fighting an uphill battle because in Japan there’s a lot of cases like this ending with conviction. Something like 99%.”