The former CEO of Mt. Gox – at one point the world’s biggest crypto exchange – has been given a suspended sentence of two-and-a-half years for his role in the loss of 850,000 Bitcoin and $28m in cash.
Mark Karpeles was found guilty of data manipulation but was cleared of embezzlement charges at a court in the Japanese capital of Tokyo. The 33-year-old had denied all of the charges against him, and prosecutors had been seeking a 10-year sentence during the trial.
At the height of its success, Mt. Gox was handling four in every five Bitcoin transactions. But in 2014, it was forced to file for bankruptcy – blaming malicious actors for stealing cryptocurrency worth $500m at the time. Today, the value of the Bitcoins stolen would exceed $3.3bn.
Karpeles’ trial was not connected to the mysterious disappearance, and instead, the charges he was convicted of focused on how he tampered with financial records. 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 conceal the fact that Mt. Gox had lost money to hackers in the first instance.
However, it was concluded that the French national was not acting with ill intent. As a result, he will be spared prison as long as he doesn’t commit another offence over the next four years.
According to Bloomberg, Karpeles bowed before the judge delivered the sentence.
Despite avoiding a jail term, the verdict featured strong language, and said Karpeles’ actions had caused “massive harm to the trust of his users.” It added: “There is no excuse for the defendant, who is an engineer with expert knowledge, to abuse his status and authority to perform clever criminal acts.”
The collapse of Mt. Gox had a huge impact on the crypto markets that lasted for more than two years – and indeed, its legacy has continued to weigh on prices.
Earlier in March, Karpeles remained defiant, writing in a post on Reddit:
“I’m not going to prison.”
He has claimed that he has been ill-treated by the Japanese justice system, claiming in media interviews that he was denied legal representation and coerced into signing a confession.