In a recent move, Mark Karpeles, the Ex CEO of the Japanese Bitcoin Exchange, Mt. Gox was under the trial for allegations pertaining to embezzlement of investors’ money. The former Crypto Tycoon may face up to 10 years in jail if convicted in the ongoing trial at the Tokyo District Court.
It may be recollected that in the year 2011, Karpeles purchased Mt.Gox from Jed McCaleb. Two years down the lane, Mt.Gox handled over 80 percent of Bitcoin’s transactions.
The Shut Down
Later in 2014, the Bitcoin Exchange brusquely shut down its operations, without providing investors with an opportunity to withdraw, transfer or liquidate their Bitcoins, and allegedly duped them of 850,000 Bitcoins.
Thereafter, Mt. Gox went on to file for a bankruptcy in Japan and subsequently in the US. The Bitcoin Exchange blamed 3rd Party attackers of stealing the 850,000 Bitcoins. However, later it claimed to have found around 200,000 Bitcoins in an old wallet.
Trouble in the US
Tokyo is not the only place where Marpeles is in trouble, as a US citizen Mt.Gox, has initiated a class-action against him in the US. This lawsuit holds the former Mt.Gox CEO responsible for causing losses of over $400 million, money that rightly belonged to Mt.Gox customers.
Marpeles, aged 33 is currently in prison since his arrest on 1st of August, 2015. According to Breaker, Marpeles reportedly believes that despite being innocent, he is likely to be convicted. He stated that going by the outcomes of similar cases in Japan, he is likely to be convicted in Japan. However, he has more trouble waiting for him in the US. Experts blame the Mt. Gox episode to have caused investors to lose faith in Bitcoin. However, whether this is a case of embezzlement of investors’ money or a case of lack of adequate security measures, that remains a matter of judicial scrutiny.