Former Mt. Gox CEO Mark Karpeles Facing Possible Ten-Year Prison Sentence

Avi Rosten

The Mt. Gox saga continues to unfold as Japanese prosecutors today (December 12th) sought a ten-year prison sentence for the former CEO of the notorious cryptocurrency exchange.

According to a report in Japanese news outlet The Mainichi, prosecutors told the Tokyo District Court that 33-year old Mark Karpeles:

Diverted company funds to such uses as investing in a software development business for personal interest. [and] played a great role in totally destroying the confidence of bitcoin users.

Karpeles’ indictment claims that the Frenchman embezzled $3 million (341 million yen) worth of customer funds between September and December 2013 - diverting customer money into his own accounts.

Also accused of manipulating data for his own benefit, Karpeles pleaded not guilty during the trial’s first hearing in July 2017 saying in his statement “I swear to God I’m not guilty.”

Mt. Gox 

The now-defunct exchange’s collapse in February 2014 following the hack of 850,000 bitcoin - worth c. $450 million dollars at the time - sent cryptocurrency markets into a meltdown that saw bitcoin drop over 90% in price from a high of $1093 at the beginning of the year.

In July of 2018, a Japanese court approved the beginning of civil rehabilitation proceedings for victims of the exchange’s collapse. Although Karpeles was not linked directly to the infamous hack, he remains one of the more high-profile individuals connected to the exchange, but has consistently denied any wrongdoing.

In April this year, Karpeles took to Reddit to apologize in a lengthy statement to Mt Gox users, saying:

When I took over MtGox, I never imagined things would end this way and I am forever sorry for everything that’s taken place and all the effect it had on everyone involved.

Nikkei reports that the date of the trial’s conclusion remains unknown.