Japanese Court Slaps Suspended Sentence To Ex-Mt. Gox CEO
Bloomberg has reported that Mark Karpeles, ex-CEO of the inoperative Bitcoin (BTC) exchange Mt.Gox, has been slapped with a suspended jail term after being found guilty of fudging of financial statements.
Reportedly, the Tokyo District Court subsequently found Karpeles culpable of combining his personal funds with those of the exchange to hide the financial losses of the platform caused by hackers. He has been sentenced to two years and a half in prison, which he will not be required to fulfill unless he perpetrates another offense in the next four years.
While acquitting Karpeles of alleged misappropriation of funds, the court said: “The charge of electronic record tampering is true and deserves punishment, but there’s no criminal evidence of embezzlement.”
Mt. Gox was compromised in 2011, as earlier reported, with approximately 24,000 creditors alleged to have been impacted. The exchange’s consequent demise in early 2014 resulted in the loss of 850,000 Bitcoins (BTC), priced at about $460 million at that time at the time (~$3.3 billion at the time of press).
While the allegations of forgery and embezzlement were not directly linked to robbery, the behavior of Karpeles in the aftermath of the hack of the platform sparked distrust. Karpeles allegedly traced 200,000 of the lost BTC in a cold storage in the summer of 2015, even before the charges were filed against him.
Bloomberg has highlighted the court of saying that it cannot “look lightly upon the criminal responsibility of the defendant.” The court accused Karpeles of resulting precipitating “massive harm to the trust of his users. [T]here is no excuse for the defendant, who is an engineer with expert knowledge, to abuse his status and authority to perform clever criminal acts.”
Karpeles has defended his actions his since his trial began in July 2017 and has blamed the Japanese legal system of poor treatment, which, as Bloomberg documents, has 99% punishment rate. He alleges to have been questioned for months without legal aid and to have been “bullied” into signing a guilty plea.
As announced earlier this month, in the light of rehabilitation process in Japan, a U.S. court turned down Karpeles ‘ request to stay a distinct lawsuit accusing him of personal responsibility for losses to investors. Karpeles rejected the so-called “GoxRising” movement in February, championed by contentious cryptographic figure Brock Pierce, who claimed he could relaunch the trading platform and speed up remuneration for Mr. Gox’s creditors.