Mark Karpelès, the former Mt. Gox CEO who oversaw the collapse of the platform in 2014, was cleared of embezzlement charges at a Japanese court yesterday. The ruling by the Tokyo District Court stated that evidence to support a claim of embezzlement was not strong enough, although he was found guilty of producing illegal records, for which he was given a two and a half year sentence, suspended for four years. Karpelès had been facing up to ten years had he been convicted.
Convicted of Data Manipulation
Karpelès’ case is not actually connected to the fall of Mt. Gox and the 850,000 BTC that were stolen. Rather it relates to $3 million worth of customer funds he was alleged to have siphoned off between September and December 2013, money he claims was a temporary loan that he intended to pay back. Karpelès was cleared of this charge, and another charge of violating company law, but he was found guilty of manipulating exchange data, which involved illegally producing electronic records in connection with Mt. Gox’s accounts. For this, he received a suspended sentence, meaning that he will not face jail time unless he commits another crime within four years. Karpelès did admit to running the Willy bot, but denied all the other charges brought against him.
Further Trials Await
Karpelès, the self-titled ‘King of Bitcoin’, took over Mt. Gox in 2010 and turned it into the biggest Bitcoin exchange in the world, but the wheels began to fall off just three years later when the FBI seized $5 million of Mt. Gox funds and a $75 million lawsuit was lodged from investors who couldn’t withdraw money. The site went offline in 2014 having failed to honor withdrawals for some time, and shortly afterwards the scale of the troubles with the exchange were laid bare when it was found that hackers had been skimming Bitcoin off the exchange for years.
Karpelès is not thought to have been involved in stealing Bitcoin. However, his poor management of the exchange and his laissez-faire attitude at the time of the crisis, plus the later confirmation that he artificially inflated the price, have contributed to making him a scapegoat for those who lost money in the 2014 collapse. Karpelès still faces a civil suit in Illinois by former Mt. Gox clients, which he is now free to face in person should he wish.