Mt. Gox Founder Mark Karpeles Acquitted Of Bitcoin Embezzlement

Japanese Court Finds Former Mt Gox CEO Guilty of Data Manipulation

Mt. Gox’s Mark Karpelès could avoid prison, despite faking financial records

According to the verdict translated by Nakamura, the court found that Karpeles was running a mess while tampering with official records to hide the missing Bitcoin, but he did not do it for personal gain.

Mark Karpeles opponents in court had wanted a 10-year sentence claiming that he embezzled the funds and channeled it into another project, a situation that the current court decision has found untrue. The incident with Mt.Gox pushed the country to introduce a licensing framework for cryptocurrency exchanges. In an interview with Decrypt, Ver-who held a "life changing amount of bitcoins" on the exchange when it was hacked-argued that Karpeles failed to keep the exchange secure.

From time to time, Mt.Gox liquidates its cryptocurrency holdings and gives the fiat equivalent to its clients. "In April 2011 there was an article in Forbes which changed Bitcoin forever, and I found myself managing emergencies every day without any time to do the work that'd need to be actually done".

A former Mt. Gox employee has also described the Mt Gox's trading platform software as "spaghetti code", and Karpeles has been accused of spending more time trying to establish a bitcoin-friendly French restaurant in Tokyo than attending to the exchange affairs as it collapsed. However, the former Mt. Gox CEO has been skeptical of such plans. Due to the lack of auditing structure and vigilance, as well as the previous thefts at Mt. Gox, it is not far-fetched to believe the "sinister" actions of Mark Karpeles were no more than negligent financial monitoring infrastructure and poor operational security procedures. He received a suspended jail sentence of two and a half years.

Karpeles had pleaded not guilty on both charges. He is likely to avoid prison, unless he commits another crime in the next four years.

In a summary of the ruling, the court said Karpeles had "harmed the users' trust greatly" by manipulating data and "abused his expertise as an IT engineer and his position and authority".

The charge of electronic record tampering is true and deserves punishment, but there's no criminal evidence of embezzlement.

"Karpeles has said he was interrogated for months without a lawyer and bullied into signing a confession, a "nightmare" process during which he lost 77 pounds over 11 months".

What do you think about this verdict for the Mt. Gox CEO?

Images courtesy of Shutterstock, Channel News Asia, and Fortune.

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