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Japanese Police Arrest Mount Gox CEO Mark Karpeles

Posted by timothy on from the well-he-looks-guilty dept.

McGruber writes with the news as carried (paywalled) by the Wall Street Journal that Mark Karpeles, who headed bitcoin exchange Mt. Gox, has been arrested by Japanese police: In February 2014, Mount Gox filed for bankruptcy, saying it had lost 750,000 of its customers' bitcoins as well as 100,000 of its own, worth some $500 million at the time. A police spokesman said Mr. Karpelès is suspected of manipulating his own account at the company by making it appear that $1 million was added to it. The BBC reports the arrest as well, and notes that the coins missing from Mt. Gox represent 7% of all Bitcoins in circulation.

2 of 104 comments (clear)

  1. No sweat, just act like a bankster. by Anonymous Coward · · Score: 2, Interesting

    Nothing will happen to you - in fact, demand the government give back all that money they stole from you after you stole it.

  2. Re:Found? by DanielRavenNest · · Score: 4, Interesting

    > The fishy part has always been that the theft occurred from offline, "cold storage" wallets,

    According to a Reddit AMA today from a former Mt. Gox employee (he had kept silent until the arrest, because his testimony was part of the investigation), there were no cold storage wallets. It was total amateur hour on Karpeles' part: no proper security, no proper accounting, customer funds used for business and personal expenses, etc. The likely situation is the "missing" bitcoins never actually existed. Customer accounts were credited with fake coins to cover the fact that their funds were being used for other things. Eventually customer demands for cash or sending out their bitcoins elsewhere could not be met, and they declared bankruptcy.