Mt. Gox CEO Karpeles arrested in Japan

CEO is suspected of illegally altering financial data, involvement in disappearance of 650,000 bitcoins

karpeles

Mt. Gox CEO Mark Karpeles bows in ritual apology on Japanese TV while at a press conference on Feb. 28, when the bitcoin exchange filed for bankruptcy protection at the Tokyo District Court.

Credit: ANN News

The CEO of failed Bitcoin exchange Mt.Gox was arrested in Japan early Saturday by police, according to media reports.

Mark Karpeles faces charges related to the loss of 650,000 bitcoins worth hundreds of millions of U.S. dollars when the Tokyo-based trading exchange collapsed in February 2014.

karpeles 100571469 orig Tibanne

Mark Karpeles, the former head of failed Bitcoin exchange Mt. Gox.

Karpeles, a French citizen, is suspected of accessing the company's computer systems and falsifying financial data, according Japan's Kyodo News.

Japanese broadcaster NHK showed video of a man that appeared to be Karpeles being led to a car by police in a residential district of Tokyo. The TV station said the footage was recorded around 6:40am Saturday, or Friday afternoon U.S. time.

Under Japanese law, Karpeles can be held in custody without charge for up to 23 days. He will have access to a lawyer, but the lawyer is not permitted to be present during questioning by police and prosecutors. If indicted, Karpeles could remain in jail under a court case has been held. Japan has a conviction rate of roughly 99 percent.

The Tokyo Metropolitan Police Department has been investigating the collapse of Mt. Gox for more than a year.

It was the world's largest Bitcoin exchange when it failed, hitting investors who had rushed into the Bitcoin market during a bubble at the end of 2013. The price of Bitcoins shot up from around $118 at the end of September 2013 to almost $1,000 less than two months later. It retreated a little to around $800 at the beginning of February and is at $283 today, according to Coindesk.

Karpeles has previously denied any wrongdoing at Mt. Gox and shown contrition for the victims of the crash. Mt. Gox had around 1.2 million customers when it failed.

"While I believe I did everything I could do to prevent this from happening, it still happened," he told IDG News Service in an interview last November, blaming hackers for the loss of bitcoins. At the time, 850,000 Bitcoins were thought to have been lost, but Mt. Gox later said it had "found" 200,000 of them.

Martyn Williams covers mobile telecoms, Silicon Valley and general technology breaking news for The IDG News Service. Follow Martyn on Twitter at @martyn_williams. Martyn's e-mail address is martyn_williams@idg.com

To express your thoughts on Computerworld content, visit Computerworld's Facebook page, LinkedIn page and Twitter stream.
Windows 10 annoyances and solutions
Shop Tech Products at Amazon
Notice to our Readers
We're now using social media to take your comments and feedback. Learn more about this here.