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Mt Gox Trial: Mark Karpeles Pleads Not Guilty to Bitcoin Embezzlement Charges

Last Updated March 4, 2021 4:58 PM
Samburaj Das
Last Updated March 4, 2021 4:58 PM

Founder and former CEO of Mt Gox, once the world’s largest bitcoin exchange, has denied charges of embezzlement and data manipulation of customers’ bitcoins as his trial gets underway.

32-year-old French-born Karpeles appeared at the Tokyo District Court today to claim he wasn’t guilty of embezzling any customer funds stored at the exchange, according to the Japan Times .

To the charge of embezzling a total of ¥341 million in customers’ funds between September and December 2013 into an account in his name, Karpeles stated the following, a prepared statement in Japanese:

I swear to God I am not guilty.

A pre-trial consultation saw Karpeles’ defense argue that the transfer of funds was, in fact, remittance that fell under the scope of Mt Gox’s revenue, rather than the embezzlement of customer funds.

Instead, Karpeles insisted that losses – of an estimated 750,000 bitcoins, just under $2 billion in value today – was due to hacking.

Karpeles stated in court:

The main reason for the bitcoins’ disappearance was an external hacking attack.

Prosecutors alleged that ¥315 million of the ¥341 allegedly embezzled was to be used to purchase a 3D printer business. A further ¥6 million (approx. $52,000) was set aside for the purchase of Karpeles’ own canopy bed, prosecutors said.

Karpeles added:

I offer my sincere apology for causing inconvenience to many clients with the bankruptcy of Mt Gox.

As proceedings began in court, Karpeles was reportedly asked by Judge Takeshi Irei to state his occupation. To this, Karpeles claimed he was merely an “IT engineer” since MtGox had already gone bankrupt.

Karpeles reportedly said:

As a person responsible for Mt Gox, I have to recover the stolen bitcoins and determine where they are gone, but this trial is not aimed at finding the cause of bankruptcy.

The case of Mt Gox, a milestone event in bitcoin’s history, has led to Japan becoming one of the earliest countries in the world to regulate digital currencies. In April, revised Japanese legislature regulated bitcoin and digital currencies nationally, now recognizing bitcoin as legal tender.

For Karpeles, a guilty verdict would see the former bitcoin executive face up to five years in prison or a fine of up to 500,000 yen ($4,000).

The trial continues.

Featured image from TheBitcoinMovie /YouTube.