MtGox CEO Mark Karpeles Formally Charged in Japan

The Tokyo District Public Prosecutor's Office charged the Bitcoin kingpin with embezzlement after months of investigations

After several months of investigations the former CEO of MtGox Mark Karpeles was arrested by the Tokyo Metropolitan Police department last month amid allegations of fraud. Today, the Tokyo District Public Prosecutor’s Office has finally filed formal charges against him.

According to the documents, the embezzlement charges allege that Mr. Karpeles misappropriated more than $50 million from corporate accounts belonging to MtGox.

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A report detailing claims towards the company in excess of $22 billion has been released by Japanese authorities. At the time of its bankruptcy, MtGox disclosed that it had lost more than 750,000 bitcoin of client funds.

Later claiming to have found 200,000 of the lost bitcoins in an offline wallet. Typically held in a storage device, the so called “cold” wallets are never connected to the internet.

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Mr. Karpeles has been held in custody for just under 6 weeks, which is allowed under Japanese law.

Initially, the former CEO of MtGox was connected to doctoring data and transferring money to companies connected to him. In August, he was arrested due to an alleged connection with $480 million worth of lost bitcoin.

The Japanese exchange MtGox suspended withdrawals in the beginning of 2014, after many clients reported months of delays. After the bankruptcy filing the firm claimed that a software bug was to blame for the disappearance of funds.

It seems that Japanese authorities are not so convinced and the endgame for Mr. Karpeles is far from near. According to unofficial trading volume information, before bitcoin prices crashed, the MtGox exchange was behind as much as 80 percent of daily bitcoin transactions.

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