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Newsflash: Bitcoin Exchange Mt. Gox: Mark Karpeles Receives Suspended Sentence

Last Updated March 4, 2021 3:19 PM
P. H. Madore
Last Updated March 4, 2021 3:19 PM

The Wall Street Journal reports that the verdict is in on Mark Karpeles. He was found guilty on just one charge: producing illegal records. The rest of the charges, including the loss of millions of dollars in Bitcoin, were dropped. Further, he was handed a suspended sentence.

Karpeles Beats Most Charges, Receives Suspended Sentence for Producing Illegal Records

In the US justice system, at least, a suspended sentence basically means that as long as the accused keeps their nose clean, they never have to go to jail.

Karpeles’ defense attorneys used the fact that he hid the true state of the exchange from investors and users to his advantage. According to the Journal , they argued:

Mt. Gox did not collapse because of the defendant’s wrongdoing. On the contrary, the defendant was trying his hardest every day to prevent its collapse.

Also crucial to his defense is the fact that authorities arrested a man believed to have stolen a large portion of Gox’s coins and laundering them through other exchanges. The ruling came Friday morning from the Tokyo District Court, which is Thursday evening for the entire United States – the home of a huge number of people victimized by the collapse of Mt. Gox.

The Fallout of Mt. Gox Is Ongoing

A sum total of around 200,000 BTC (and subsequently Bitcoin Cash/Bitcoin SV) were eventually recovered from Mt. Gox. About a third of that has so far been liquidated, and next month a plan will be submitted on how to distribute the proceeds.

Collectively, people who held money on the exchange at the time of its implosion are called “the creditors.”

Recently billionaire Brock Pierce claimed to this reporter that he had a legitimate and abiding ownership interest in the remaining assets of Mt. Gox, but Mark Karpeles has since publicly refuted that claim. Pierce provided CCN.com with legitimate documents, but Karpeles claims these are not binding. Pierce said of Karpeles’ claim to have rescinded the agreement:

Mark said, ‘Please rescind this so we can tell the bankruptcy trustee our plans and then we will sign another binding agreement.’ I didn’t believe Mark, considering his reputation and history of lying, so I refused — leaving our deal in place.

Karpeles has yet to follow up about an interview with CCN.com, presumably because he has been busy with his defense.

Pierce seeks a full rehabilitation of Mt. Gox, with full distribution of all assets to creditors, along with a share in the new Mt. Gox Pierce wants to launch.

Karpeles is not on board with any plans by Pierce or his company Sunlot. Neither party have followed up with this reporter. These claims are based on public twitter exchanges.