Chief executive of bitcoin exchange Mt Gox sentenced by Japanese court

Japanese Court Finds Former Mt Gox CEO Guilty of Data Manipulation

Japanese Court Finds Former Mt Gox CEO Guilty of Data Manipulation

A Japanese court has found the man who masterminded the collapse the giant Mt. Gox cryptocurrency exchange guilty of tampering with data but acquitted him of all other charges.

In December, Japanese prosecutors were seeking a 10-year sentence for Karpeles for embezzlement, alleging he used about $3 million of customers' funds for his own personal use.

Mt. Gox was the original Bitcoin exchange, transformed from a website that sold Magic: The Gathering playing cards to the largest Bitcoin exchange in the world, with over 80% market share. Karpeles has maintained his innocence, but many have always felt that he had been at the center of the exchange's losses, which amounted to over $400 million at the time. Gox researcher Kim Nilsson has said Vinnik was the main suspect in several early bitcoin thefts including Mt. Gox, Bitcoinica, and Bitfloor. However, back then, the price per Bitcoin was quite low.

Shortly after shuttering the exchange, Mt. Gox announced that it had found a paper wallet containing 200,000 BTC, which was turned over the the bankruptcy trustee. The laws for exchanges in Japan also requires that investors and creditors get fair compensation and protection.

The court's decision marks the closure of another chapter in the Mt. Gox story.

"Most people will not believe what I say".

But the court rejected prosecutors' claims of embezzlement, saying Karpeles's acquisition of a software developer business was reasonable and transfers of money to his personal account from that of Mt. Gox were loans he had meant to return. The court ruled that he mixed his own financial affairs with those of his company's - and it seems that the motivation for this was to hide the fact that Mt. Gox had lost money to hackers in the first instance. As a result, he will be spared prison as long as he doesn't commit another offence over the next four years.

According to the court, Karpeles had "harmed the users' trust greatly" by manipulating data and "abused his expertise as an IT engineer and his position and authority".

Mt. Gox was the largest bitcoin exchange from 2013-2014, handling nearly three-quarters of the total global bitcoin transactions.

"The charge of electronic record tampering is true and deserves punishment, but there's no criminal evidence of embezzlement", the court said, Bloomberg reported. Overall, he described his legal odyssey in Japan as a "nightmare", citing the fact he lost 77 pounds during his incarceration of 11 months.

What do you think about this verdict for the Mt. Gox CEO?