Mt. Gox, was the end and beginning of an era in the Crypto world. Faith for it’s CEO Mark Karpeles is finally coming to a verdict. According to reports, prosecutors against Mark Karpeles are pushing for a ten-year jail term, in the Tokyo District Court.
Allegations towards Karpeles include diverting funds to other ventures and also money laundering. A total of 340 million yen which is about $3 million US has reportedly been embezzled from Mt. Gox clients by Karpeles.
In his defense, Karpeles mentioned that the money transfers were temporary loans and not manipulation. He is still to prove the transfers were loans.
The allegations gathered by the prosecutors include transfers to a 3D printer business which Karpeles purchased for 315 million yen, a purchase of a canopy bed for 6 million yen and an unspecified amount in 2015 on prostitutes.
Worst of all Karpeles has lawsuits filed in the United States too, by former clients of Mt. Gox, to which his defence lawyers claim there are jurisdiction barriers.
Mt. Gox was the beginning of Bitcoin domination, and the first significant reason Bitcoin’s impression to mainstream public fell drastically. It led to severe financial watchdogs keeping an eye on Bitcoin and Cryptocurrencies.
Mt. Gox was launched in July 2010, and by 2013 and 2014 it handled a whopping 70% of all Bitcoin transactions. It was the world’s largest Bitcoin intermediary and the world’s leading Bitcoin exchange.
In February 2014 Mt. Gox came crashing down by a suspension of trading, and closure of its website and exchange service. It filed for Bankruptcy protection from creditors. Liquidation began in April 2014.
The main reason cited for the collapse was 850,000 Bitcoins belonging to customers reportedly missing. At that time 850,000 Bitcoins were valued at $450 million.
Since then only 200,000 Bitcoins were found. It all became clear in April 2015 when the Tokyo Security company WizSec concluded that Bitcoins were stolen from Mt. Gox’s hot wallet from 2011. Karpeles was arrested in August 2015 for manipulation of increasing the balance in the account along with moving Bitcoin into an account he controlled.
Overall an imprisonment of 10 years for Karpeles, will lead to Cryptocurrency exchanges ensuring that manipulation is considered a severe fraud!
Image Source – Flickr
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