Mt Gox CEO Mark Karpeles (Photo : Facebook)
Mark Karpeles, the Chief Executive Officer of Mt Gox, once the world’s biggest Bitcoin exchange company, has been arrested by the Japanese police, on suspecting of illegally manipulating the company’s systems to falsify its assets.
The Tokyo Metropolitan Police have Karpeles detained and was sent to the Tokyo District Public Prosecutors’ Office for further questioning on Aug 2, Sunday. Karpeles can be held for a period of up to 23 days, without any formal charges, under Japanese Law, with no possibility of bail, BBC reported.
Karpeles is suspected of creating over $1 million in Bitcoins artificially in the year 2013, by manipulating Mt Gox’s system, while spending customer deposits worth about $8.9 million, according to Wall Street Journal.
The officials are reportedly investigating Karpeles’s involvement in the massive virtual currency loss of 850,000 Bitcoins worth $397 millions in February 2014 that resulted in the exchange filing for bankruptcy a month later.
Karpeles claimed that the loss was due to a bug in the system, and not any hack or other malicious activity. His lawyer even denied Karpeles having anything illegal to do with in the issue.
Following the bankruptcy filing, Mt Gox revealed that over 200,000 Bitcoins were found in a cold digital wallet from 2011, worth $116 million, reducing the missing Bitcoins count to 650,000. The exchange is the midst of liquidation proceedings.
Karpeles is suspected to have used the funds privately and send them to his other firms. He is expected to be rearrested on the basis of professional embezzlement over the suspected misuse of funds.
However, the CEO of Mt Gox has denied any allegations on him once again. Karpeles’ lawyers are yet to comment on this matter.
