Wednesday, May 27, 2020

Ex-Mt. Gox CEO Guilty Of Record Tampering, Says Japanese Court

Mark Karpeles, the ex-CEO of the now-defunct Bitcoin exchange Mt. Gox, has been found guilty of financial records tampering and has received a suspended jail sentence as a result, according to Bloomberg.

Karpeles, who was accused of concealing the losses the platform incurred from the attack of hackers by combining the funds of the exchange with his personal finances, has been found guilty after a series of court battles by the Tokyo District Court. He was given a two and a half years jail sentence by the court, which will stay suspended unless he fails to keep his record spotless within the next four years.

Regarding the case of embezzlement also leveled against Karpeles, the court stated he’s not guilty:

“The charge of electronic record tampering is true and deserves punishment, but there’s no criminal evidence of embezzlement.”

The Origin of Karpeles’ Woes

It is no longer news how Mt. Gox was attacked by hackers in 2011 which saw to the loss of funds that affected around 24,000 creditors. Subsequently, due to the severity of the attack, the exchange fell in early 2014 and accompanying its fall was the loss of 850,000 Bitcoin (BTC) worth about $460 million at the time or $3.3 billion presently.

Though there was no link between the embezzlement and fraud charges to the theft, the way Karpeles handled the issue painted him in a bad light. Before he was charged with anything, in summer 2015, Karpeles allegedly discovered 200,000 of the Bitcoin that was supposed to be missing in cold storage.

The court was quoted by Bloomberg saying that it could not “look lightly upon the criminal responsibility of the defendant,” blaming Karpeles for the cause of “massive harm to the trust of his users”:

“[T]here is no excuse for the defendant, who is an engineer with expert knowledge, to abuse his status and authority to perform clever criminal acts.”

Karpeles’ Claim on Innocence

Ever since his trial started in July 2017, Karpeles has had one word to say about his ordeal, innocence. He has maintained that he’s innocent of all he was charged with and also accused the Japanese justice system of unjust treatment. He complained of lack of adequate legal representation during his months of interrogation and how a confession was “bullied” out of him.

Karpeles, in February, dismissed the “GoxRising” movement led by Brock Pierce, a controversial crypto figure, who claims to be able to restart the trading platform and expedite the process of repayment for Mt. Gox’s creditors.

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