Mark Karpelès, former CEO of Mt. Gox (via Twitter).
Asia & Australia,  Bitcoin

Mt. Gox CEO acquitted on most serious charges, receives suspended sentence on the rest

Mark Karpelès’ year-long detention and interrogation in Japan was a nightmare; lost 77 pounds

A Japanese court handed Mt. Gox founder Mark Karpelès a suspended sentence for tampering with financial records, but acquitted him of the far more serious charges of embezzlement and breach of trust on March 15.

Karpelès, founder of what was the world’s largest cryptocurrency exchange before it imploded following a massive half-billion-dollar hack in 2014, had been on trial in Japan since last July. He was given a two-and-one-half year suspended sentence and four years’ probation.

“The charge of electronic record tampering is true and deserves punishment, but there’s no criminal evidence of embezzlement,” the court verdict read. It found that he had falsified records by mixing his own money with the exchange’s to try and hide the loss of 850,000 Bitcoin.

While he had apologized for the failings in Mt. Gox’s security that allowed the hack, Karpelès had always denied any involvement. His case was strengthened by the July 2017 American indictment of Alexander Vinnick on charges of laundering the funds stolen from Mt. Gox. Vinnick has denied the charges and is being held in Greece during an extradition battle.

The fallout from the Mt. Gox collapse continues to this day. There was speculation last month that huge sales of Bitcoin (BTC) and Bitcoin Cash (BCH) recovered from Mt. Gox by the Japanese court-appointed trustee beginning early in 2018 may have been behind the price crash of Bitcoin and other cryptocurrencies.

The Karpelès case garnered notice recently after the arrest and detention of former Nissan Renault CEO Carlos Gosn focused attention on the Japanese “hostage justice” system, in which nearly indefinite detention and interrogation without an attorney present has led to a nearly 99 percent conviction rate, and nearly 90 percent of those being brought to trial confessing. Karpelès was held and questioned for nearly a year, including 50 days straight, eventually signing a confession. He called the process a “nightmare” that caused him to lose 77 pounds.

Leo Jakobson, Modern Consensus senior editor, is a New York-based journalist who has traveled the world writing about meeting and incentive travel, as well as the consumer and employee loyalty business. He also covered the East Coast side of the Internet boom and bust, small businesses, and New York City crime, nightlife, and politics. Disclosure: Jakobson owns no cryptocurrencies.

Subscribe to MODERN CONSENSUS Newsletter