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Mt. Gox CEO Charged With Stealing $2.7 Million

Posted by Soulskill on from the all-about-the-bitjamins dept.

An anonymous reader writes: After being arrested six weeks ago in Japan, Mt. Gox CEO Mark Karpeles has now been formally charged with the theft of $2.66 million worth of clients' money. "Tokyo-based MtGox shuttered last year after admitting 850,000 coins — worth around $480 million at the time, or $387 million at current exchange rates — had disappeared from its digital vaults. The exchange, which once said it handled around 80 percent of global Bitcoin transactions, filed for bankruptcy protection soon after the cyber-money went missing, leaving a trail of angry investors calling for answers." Karpeles still denies doing anything illegal. The case is proving difficult for Japanese authorities to unravel, and they're taking it as slowly as they legally can.

8 of 99 comments (clear)

  1. just copy the bitcoins by known_coward_69 · · Score: 5, Funny

    they are digital, you can't steal them

    1. Re:just copy the bitcoins by SScorpio · · Score: 5, Funny

      Sounds like he didn't have the Wright defense attorney.

    2. Re:just copy the bitcoins by TheCastro1689 · · Score: 4, Insightful

      In Japan there are at least two courts you go through, kind of like a grands jury in the States first. But if you're found guilty in the "grand jury" you're definitely going to be found guilty in the regular court.

    3. Re:just copy the bitcoins by Fire_Wraith · · Score: 4, Interesting

      They do tend to bring only cases they think they'll win - there aren't any plea bargains (which is a huge improvement over the current US justice system). That said, they also have a big problem with police/prosecutors relying on (often coerced) confessions to win convictions.

      Also, there has been something of a tradition that many judges are inclined to trust the prosecutors/police, that's only more recently been whittled away at with some of the evidence that's come to light in old cases with DNA evidence brought in. Consider Hakamada Iwao, who was found guilty of murder, only to be exonerated 45 years later when DNA testing proved his innocence. One of the original judges reportedly considered committing suicide out of shame over it:

      http://www.theguardian.com/wor...
      http://www.nytimes.com/2014/03...

  2. But what about the MTG cards? by mrthoughtful · · Score: 4, Funny

    What happened with all the MTG cards?! They've got to be worth something!

    --
    This comment was written with the intention to opt out of advertising.
  3. Caveot Emptor by Moof123 · · Score: 4, Insightful

    Hard to have any sympathy for the situation. If you sign up for an currency that is designed to be outside of the world governments, don't come crying to the government that dumb ass idea blew up in your face.

    1. Re:Caveot Emptor by njnnja · · Score: 4, Informative

      Although your conclusion

      there's no guarantee that those people will get their money back - unlike with a government-issued, government-insured currency.

      is sound, it's actually a little more subtle than that. The reason that people who lost money in Mt Gox can't get their money back isn't because it was in Bitcoin. In theory, the US government could decide to insure Bitcoin deposits in FDIC-regulated banks (of course they don't currently), even though the US government can't print Bitcoin (of course, the value of that guarantee is only as good as the US government's ability to get its hands on Bitcoin if a bank goes under). The reason people won't get their money back from Mt Gox is because Mt Gox isn't an FDIC insured bank. Even if people just deposited US Dollars in Mt Gox, they would have lost everything when it was stolen because there is no "deposit insurance" for a company that isn't FDIC-insured.

      While it may seem like I am being pedantic for the sake of a silly "gotcha," that is not my intent. Instead, the very important point that this illustrates is that there is a big difference between Bitcoin as a currency, versus "Bitcoin" as a financial system. As strong as Bitcoin as a currency may be, the Bitcoin financial system is barely embryonic and needs to do a lot to develop the kind of institutional heft that the current financial system has. Note that this does not have to be centralized (and certainly doesn't have to be done through a government), but it's much more likely that large numbers of ordinary Joes will use Bitcoin only if the larger system is more robust.

  4. embezzlement: taking for your own use ANYTHING en by raymorris · · Score: 4, Informative

    embezzlement:
    The fraudulent appropriation to his own use or benefit of property or money in trusted to him by another
    -Black's Law Dictionary

    One can embezzle any type of property, including horses, currency, and chocolate. The distinguishing feature of embezzlement is that the culprit as been entrusted with the property. Theft would be if he took the thing from you without your permission. Embezzlement is when you hand him the thing, expecting him to hold it for you, but he uses it for himself.

    Embezzlement applies to Mt Gox because people sent their stuff to Mt Gox willingly.