The former owner of the now-defunct Mt.Gox bitcoin exchange, Mark Karpeles, has been sentenced to two and half years in prison by a prosecutors in Japan. The Tokyo District Court found him guilty for falsifying computer data in connection with the colossal heist, an event that saw half a billion dollars worth of bitcoin disappear from the exchange in 2014, reports the Japan Times on March 15, 2019.
Mark Karpeles Acquitted of Embezzlement
The Tokyo District Court acquitted Mark Karpeles, 33, of embezzlement but has slapped a two and half years jail term on him for data manipulation and falsification in the prolonged Mt.Gox bitcoin exchange saga.
Interestingly the embattled founder of seminal bitcoin trading venue and exchange will not be jailed immediately, as the Tokyo District Court has reportedly suspended the sentence until 2023.
A Long Time Coming
Founded in 2010 in Shibuya, Tokyo, Japan, Mt.Gox is one of the earliest bitcoin exchanges, handling more than 70 percent of the entire bitcoin transactions globally, as at 2013.
Mt. Gox suffered its first security breach in 2011 when a bad actor allegedly transferred a vast amount of the flagship digital asset to his account using the credentials stolen from the exchange’s auditor’s personal computer, forcing the price of bitcoin to crash from $17 to some cents.
Fast forward to 2014 and Mt. Gox experienced another deadly hack.
Touted as the greatest crypto exchange heist of all time at the time, the heist saw 850,000 bitcoins valued at nearly half a billion dollars then, mysteriously vanish from its cryptocurrency hot wallet.
Though Karpeles claimed to have found 200,000 bitcoins out of the missing cryptoassets, things still fell apart for the exchange.
In February 2014, Mt. Gox closed shop and filed for bankruptcy protection from creditors, before beginning liquidation proceedings a few months later.
The Trial, Investors’ Promised Refunds
As reported by BTCManager in 2015, the Japanese police arrested Karpeles, alleging that the self-acclaimed computer geek had manipulated data on the exchange’s servers to create about $1 million in 2013, however, Karpeles denied all allegations leveled against him.
In July 2016, Karpeles was granted bail with the sum of 10 million yen, pending a trial and in 2017, the prosecution began officially, with Karpeles pleading not guilty of all charges of embezzlement and data manipulation at the Tokyo District Court.
In April 2018, BTCManager informed that Karpeles had apologized to creditors for the Mt. Gox bankruptcy, stating categorically that he wanted no part in the billion-dollar settlement entitled to him as a shareholder of the firm.
On June 26, 2018, BTCManager reported that the Mt.Gox creditors would get paid all their stolen funds in bitcoin instead of fiat, as the court had approved a petition to move the case from criminal bankruptcy to civil rehabilitation, but up till now, the battle is still not over.