Japanese Court Finds Former Mt Gox CEO Guilty of Data Manipulation

The Tokyo District Court has recently found Mark Karpeles, the former CEO of the defunct bitcoin exchange Mt. Gox, guilty of charges relating to data manipulation, although it also saw him escape some charges.

According to a report published by the Wall Street Journal, the court found Karpeles guilty of creating electronic records connecting to the cryptocurrency exchange’s books, but did not find him guilty of charges of breach of trust and embezzlement.

Karpeles was given a suspended sentence of two and a half years, and is required to maintain a clean record over the next four years in order to avoid going to jail. The court’s verdict comes years after Mt Gox filed for bankruptcy, in 2014, after allegedly being hacked for 850,000 BTC.

His lawyers reportedly noted in that he wasn’t responsible for the collapse of the exchange, but rather that he tried to prevent it. They wrote:

Mt. Gox did not collapse because of the defendant’s [Karpeles’] wrongdoing. On the contrary, the defendant was trying his hardest every day to prevent its collapse.

After the exchange went down roughly 200,000 BTC were later on found. The exchange’s collapse saw bitcoin’s price crash at the time, as at one point Mt Gox handled over 70% of the flagship cryptocurrency’s trading volume.

In December of last year, prosecutors were looking to get a 10-year sentence for Karpeles for embezzlement, alleging he used 340 million yen (about $3 million) of customers’ funds for his own use. In his defense, Karpeles insisted he didn’t illicitly used customers’ money, and pleaded not guilty while claiming he received loans from the exchange, which he planned on settling in the future.

Last year, a Japanese bankruptcy court sided with creditors who petitioned for the case to be moved to civil rehabilitation, allowing them to receive their locked up bitcoin in its original form, instead of having it converted into fiat according to the exchange rate of the time, of around $500 per BTC.

The cryptocurrency exchange’s trustee, Nobuaki Kobayashi, has set a deadline for creditors to file proof of their claims, after which he will submit the rehabilitation plan. In September of last year, he confirmed he sold $230 million worth of Bitcoin and Bitcoin Cash.

Sub-accounts in Crypto: What They Are and How They Work

 

Julia Gerstein, a crypto trading bots enthusiast and a content writer at TradeSanta. My final goal is to help readers find what they need, understand what they find, and use what they understand appropriately.


Speaking generally, a sub-account is a segregated smaller account that is tied to a larger primary account. Sub-accounts may serve different functions depending on the objectives of their owners. The term can refer to multiple email addresses linked to one user or secondary accounts tied to a primary account with a financial institution or a bank.

For this article, we will be looking at sub-accounts as they exist in the crypto industry, and specifically on trading platforms.

Built-in Sub-Accounts

On trading platforms, the sub-accounts feature allows users to create a set of subsidiary accounts with different trading strategies, funds and end customers. On some platforms, general accounts already come with built-in sub-accounts.

For example, exchange platform Crypto Facilities provides each user with cash and margin accounts when they sign up. While deposits and withdrawals are completed with the cash account, trading an instrument requires users to make an internal transfer from a cash account to their margin account that corresponds to the instrument in question.

Each instrument has its own margin account. This grants users more control over their funds and allows them to manage risks for each instrument separately from their main balance.

Optional Sub-Accounts

Other cryptocurrency exchanges, such as Gemini and Binance, have launched sub-accounts as an optional feature for institutional investors.

As an optional feature, sub-accounts can serve to introduce additional security measures and different access levels between the main account and its subsidiaries. Binance has underlined the differences between a master account and its subsidiaries, providing the former with the exclusive ability to view all data and balances, transfer funds between accounts, and have full managerial control and access to a range of asset audit tools.

Here master accounts have sole control over the movement of assets between sub-accounts, and can grant each of them different access levels and permissions. This ensures that the main account has the power to direct and monitor the actions of all its associated accounts, while each sub-account can perform its function independently from other sub-accounts.

Not Only for Institutional Investors

While institutional investors have been able to create sub-accounts for a while, this feature is still being introduced by more and more major exchanges.

Now even individual investors can create subsidiary accounts to try and assess the performance of distinct trading strategies. For example, HitBTC recently introduced its own sub-accounts feature that is now available per user’s request.

At HitBTC, sub-accounts enable users to create separate subsidiary accounts with which they can utilize various trading styles and strategies with operational autonomy. While each sub-account is separate, all of them are still tied to a master account and contribute to the cumulative volume of all accounts connected to the master.

Because trading volume is measured cumulatively, the use of the subaccounts feature can open up additional benefits for traders such as lower commissions due to progressive fee tiers that reward users for contributing to the liquidity on the trading platform.

Therefore, users can perform a variety of different trading activities unconnected to each other, and all the activities will still weigh in the financial favor of the parties involved. Master accounts also have access to important data such as the performance of each sub-account and total trading fees of all linked accounts combined. While the feature is designed with institutional and corporate clients in mind, on HitBTC any user can create sub-accounts upon request.

The adoption of this feature by more and more trading platforms will be beneficial for both institutional and individual traders. Some users can utilize it to execute different trading strategies or try various algorithms with a clear picture of their effectiveness, others to manage their team and analyze the performance of each account securely and conveniently.

Featured image by Tyler Franta on Unsplash