Tokyo-based bitcoin exchange launched in 2010, Mt Gox, was at its peak handling 70%-80% of global bitcoin transactions impressively within two years’ time.
Its explosion to being the largest exchange for the cryptocurrency ultimately led to an implosion disaster by 2014.
How about the company’s former CEO? Mark Karpeles has been spending time at the Tokyo detention house up until around mid-July of this year.
The Story behind the Mt. Gox Heist
Mt. Gox closed down and filed for bankruptcy in February 2014 with 850,000 million or roughly $473 of the company and users’ bitcoins nowhere to be found.
Though 200,000 BTC was later discovered in March 2014 in an old digital wallet from 2011, the rest of the money remains unaccounted for.
What was the reason behind this collapse that swallowed many people’s money out of their pockets? The bitcoin disappearance was attributed to either theft, fraud, or mismanagement.
Things may not be certain just yet, but it’s very own former CEO is thought to be among the responsible parties who took advantage of the bitcoin exchange site, who inevitably ended up being charged with embezzlement.
The day before the Mt. Gox’s website went offline, Karpeles resigned from Bitcoin Foundation Board of Directors and soon expressed how the bitcoin exchange platform was at a turning point.
He further stated that technical issues paved the way for hackers to get a hold of Mt. Gox’s bitcoins and performed fraudulent withdrawals.
He sure wasn’t lying, but he wasn’t telling the whole truth either.
Arrested Once, Twice, Only to be Released
Tokyo Metropolitan Police investigations on Mt. Gox led to his arrest in August of 2015, on allegations of volume manipulation on the bitcoin exchange platform.
Investigators found that the ex-CEO falsified exchange records to inflate Mt Gox’s total bitcoin holdings as he siphoned the bitcoin for his own gains.
Karpeles was held in custody for the maximum period suspects can be detained, for three weeks’ time, without formal charges.
New allegations followed through in the same month. He was re-arrested on charges of embezzlement.
He was suspected of embezzling $2.7 million of Mt. Gox customers’ deposits.
Where did the money and all the bitcoins go? It was discovered that he channeled Mt. Gox bitcoins to his own accounts in order to support his personal projects.
Ten months after being charged with embezzlement, the former Mt. Gox CEO Mark Karpeles was released on bail and now walks free.
Not many are happy with this bitcoin related Mt. Gox saga development, and one can’t help but wonder where the huge bail funds actually came from.
Well, Kerpeles isn’t really going anywhere for the time being since his bail conditions restrict him from leaving the country.