Former Mt. Gox CEO’s Fate Was Sealed, Sentenced to 2.5 Years in Prison

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By Maud Guon Mar 15, 2019
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Mark Karpelès, former CEO of defunct Bitcoin exchange Mt. Gox, has been found guilty of tampering with financial records.

Four years after Mark Karpelès was arrested in Japan, the 33-year-old French-born businessman was sentenced to 2 years and 6 months in jail on March 15.

Mark Karpelès Found Guilty, Given a Suspended Sentence

According to Yuji Nakamura, a tech reporter at Bloomberg, Mark Karpelès was found guilty of tampering with financial records but innocent on charges of embezzlement. The Tokyo District Court suspended the sentence for Mark Karpelès for four years.

“The court found that the way he ran Mt. Gox was a total mess and that he tampered records to hide the fact it was missing a lot of Bitcoin, but he did not do it for personal gain or have ill intent,” the reporter added.

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Tokyo-based Mt. Gox was once the largest Bitcoin exchange in the world, controlling 80% of the Bitcoin trading volume at its height. The exchange, however, had a tough time in 2014 when around 850k bitcoin—valued at roughly $473m at the time—was “stolen by hackers”.

The disappearance of the hefty 850k bitcoin and the collapse of Mt. Gox not only dismayed the Mt. Gox victims, but also ricocheted throughout crypto land. The market quickly lost confidence in the crypto bellwether, resulting in massive sell-offs in Bitcoin and other crypto assets.

The fallout from the collapse of Mt. Gox has continued to weigh on cryptocurrencies and investors after so many years, even though the crypto space experienced a boom in 2017 that was unparalleled in history. As a Bloomberg report put it, “Last year’s tumble in Bitcoin was partly blamed on the trustee overseeing Mt. Gox’s remaining holdings, who has offloaded about 60,000 Bitcoins and plans to distribute the rest to investors who were affected by the exchange’s closure -- a process that’s unaffected by the Karpelès case. The worry is that some of those investors will turn around and sell, further weighing on prices.”

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Doubts Over “Gox Rising”

Naturally, Mt. Gox victims are very much concerned about where the missing Mt. Gox Bitcoin flowed to and how can they get their money back.

As Cryptonews Hub previously reported, billionaire Brock Pierce, Founder of Blockchain Capital, is now ramping up efforts to revive Mt. Gox. Pierce claimed that he wants Mt. Gox creditors to be reimbursed for all of their losses, while getting back the hefty lost bitcoins.

The movement, dubbed “Gox Rising”, has created temptation like there has never been temptation before, as creditors are now expected to cover all of their losses. Yet there are too many uncertainties facing the exchange revival plan, especially the progress of civil rehabilitation, lack of financial transparency and unknown challenges ahead.

Reddit user Soft_Bit argued that what Pierce plans is nothing but a huge scam. The Reddit user pointed out that Pierce is very likely to pay exchange users in the prior value of BTC rather than the current value. In this way, the billionaire is able to rake in massive profits. “For example, around the time it was $600 BTC or so. Current is $3300 or so. If we figure 200k bitcoins then Brock will net a $540,000,000 Profit,” Soft_Bit explained.

Cryptonews Hub is an emerging blockchain media and information services company specializing in crypto assets. Its team of experts is committed to editorial independence and journalistic professionalism, providing key insights on the latest developments involving cryptocurrency regulations around the world and innovations in blockchain technology.
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