Free Press Journal

Japan charges defunct Bitcoin bourse CEO with embezzlement


Tokyo : Japanese prosecutors said  that they have charged the head of collapsed Bitcoin exchange MtGox with embezzlement, amid fraud allegations over the disappearance of hundreds-of-millions-of-dollars-worth of the virtual currency.

The indictment of France-born Mark Karpeles, 30, comes after he was taken into police custody in Tokyo last month over the affair. He remained in custody today but has the option of petitioning the court for release pending trial.

The charges are tied to allegations that Karpeles falsified data while another relates to claims he pocketed millions of dollars of Bitcoin deposits.

He has been held without formal charge for six weeks, as allowed under Japanese law. Karpeles was first taken into custody over claims he fraudulently tinkered with data and transferred funds to other firms controlled by him dozens of times between 2011 and 2013.

He was later rearrested for allegedly pocketing about 321 million yen (USD 2.7 million) worth of Bitcoin deposits, extending an initial three-week incarceration during which time police likely grilled him over the incident. Bitcoins are generated by complex chains of interactions among a huge network of computers around the planet, and are not backed by any government or central bank, unlike traditional currencies.

Tokyo-based MtGox shuttered last year after admitting 850,000 coins — worth around USD 480 million at the time, or USD 387 million at current exchange rates — had disappeared from its digital vaults. The exchange, which once said it handled around 80% of global

Bitcoin transactions, filed for bankruptcy protection soon after the cyber-money went missing, leaving a trail of angry investors calling for answers.               -AFP