Mark Karpeles, 30, the ex-boss of the now defunct popular Bitcoin exchange MtGox, was arrested in Japan over the disappearance of millions of dollars worth of the cryptocurrency.
The French-born Mark Karpeles was accused of falsifying information on the outstanding balance of the Bitcoin exchange, which used to be the world’s largest hub for trading cryptocurrency. According to Japanese news reports, officials from the Tokyo metropolitan police claimed that Mark Karpeles allegedly manipulated the exchange computer system to inflate its assets.
After media reports emerged about his arrest, Mark Karpeles claimed that the allegations were “false” and he would “of course deny” them. When the exchange filed for bankruptcy last year, Karpeles explained that 750,000 customer Bitcoins and another 100,000 Bitcoins that belonged to MtGox disappeared due to a software security bug. At the time of the bankruptcy filing, these 850,000 Bitcoins were worth $480m. The cryptocurrency exchange also said that over $27m was missing from its Japanese bank accounts.
Mark Karpeles blamed hackers for the loss and later announced that he was never going to hide from justice and managed to recover 200,000 of the lost Bitcoins. He was known as a self-proclaimed geek saying he was uncomfortable in his native country and hadn’t been back in years. The MtGox founder became interested in Bitcoin when one of the clients of his web-hosting services offered to pay in cryptocurrency.
After a while, MtGox was dominating global trade in Bitcoin. However, back in 2012, employees at the Tokyo-based exchange have already challenged the founder on issues including client money being used to cover costs.