Mark Karpeles, the former CEO of Mt Gox, has stood his ground about his innocence even as his trial came to an end, according to a report by Japanese public broadcaster NHK.
The woes of Karpeles began when he was accused of data manipulation and the embezzlement of about $3.1 million during his reign as CEO of Mt Gox.
As the closing arguments were being delivered, Karpeles stated that he regretted not being able to stop the loss of 850,000 bitcoins, an occurrence which saw to the downfall of one of the world’s biggest Bitcoin exchange. Sadly, his apologies have little or no effect regarding his trial because what he was being charged with is the misappropriation of client funds and not Bitcoin loss.
The trial has been ongoing in Tokyo district court since July of last year and come March 15, 2019, a judgment is expected.
A Possible Prison Sentence?
If the outcome of the trial does not favour Mark Karpeles, he could bag a prison sentence of up to 10 years.
According to a report, earlier in the month, prosecutors pointed out that a 10-year prison sentence was their target in the Mt Gox case.
In the past, Karpeles has defended himself by saying that the allegedly embezzled funds were temporary loans. However, prosecutors were having none of that and stated clearly that no official record existed to back up his claim.
When the trial newly began, Karpeles said that the allegedly embezzled funds were revenues gotten from the crypto exchange and not funds belonging to clients. The prosecutors stated that the embezzled money was used by Karpeles to fund a technology startup, to buy items of luxury and to entertain prostitutes.
Proceedings for Civil Rehabilitation
The end of the trial incidentally falls in the same period that is significant for investors who suffered various degrees of loss during the hacking event of Mt Gox. This period is when these investors will receive compensation for their lost funds. Mt Gox had its online claim filing system opened in September to corporate creditors after doing the same for retail investors. The filing process came to a halt in late October, and a list of approved and rejected claims is expected to be submitted in court by the trustee latest January 24, 2019.
When the hacking occurred, Bitcoin was still enjoying a price of about $480. The 200,000 Bitcoin discovered in cold storage by Karpeles would have been sufficient to provide settlement for all the investors assuming the exchange remained in bankruptcy and even at current price, the former CEO would have had a couple of millions of dollars added to his name.
Anyway, a Japanese court has made it possible through a ruling at the middle of the year, for the exchange to leave bankruptcy and commence proceedings for civil rehabilitation which will allow creditors to receive their compensation in bitcoin instead of cash.