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Former Mt. Gox CEO Says He Is Sorry But Maintains His Innocence as Trial Closes

Mark Karpeles, the former chief executive officer of the now-defunct Mt. Gox, has reportedly apologized for the losses that led to the demise of the cryptocurrency exchange. However, the embattled Frenchman insisted on his innocence regarding charges of embezzlement in closing arguments during his trial in Tokyo on Dec. 27.

Also read: Wine Retailer to Buy Majority Stake in Japanese Bitcoin Exchange for $30M

Sorry But I’m Not Guilty, Says Karpeles

Former Mt. Gox CEO Says He Is Sorry But Maintains His Innocence as Trial Closes
Mark Karpeles

Karpeles is facing charges of transferring $3 million of client funds to his own account for investment in a software development business. According to prosecutors, who are pushing for a 10-year jail term, the ex-CEO falsified Mt. Gox’s trading system to make customer balances appear healthier than they in fact were.

Karpeles has throughout the period of his trial consistently denied the charges. He claims that the money, moved in the last four months of 2013, was meant to serve as only a temporary loan. He also argued, earlier in the trial, that the funds in question did not belong to clients but were his collapsed company’s revenue.

Appearing in the Tokyo District Court for the closing arguments on Thursday, Karpeles said he was “sorry” for failing to prevent the hack, but insisted on his innocence of the charges he was facing, according to a report by the Japanese broadcaster NHK. Prosecutors aren’t investigating the hack, rather the $3 million alleged embezzlement. The Court is now expected to deliver its ruling, on a case that has run since July 2017, on March 15 next year.

Multi-Million Dollar Theft

Mt. Gox went from handling 70 percent of global bitcoin trades in 2013 to bankruptcy in 2014 after about $480 million was supposedly lost to hackers, with 200,000 bitcoins recovered two weeks later. The current lawsuit is not investigating the cause of this theft.

Former Mt. Gox CEO Says He Is Sorry But Maintains His Innocence as Trial Closes

As the effects of the discrepancy became apparent, the exchange initially delayed withdrawals for up to three months before completely ceasing them altogether, ostensibly over the theft of bitcoins. The company entered bankruptcy proceedings in 2014 but has since undergone civil rehabilitation processes to enable it to pay bitcoin still owed to investors. It has yet to be determined how much users will be repaid, given the numerous fluctuations in bitcoin’s trading price since 2014.

In early December, Japanese prosecutors said they will seek a 10-year jail term for Mark Karpeles over the embezzlement charge. Citing a lack of documentary evidence to support the “temporary loan,” prosecutors argued that Karpeles must be slapped with a harsh sentence for betraying the confidence of investors who trusted him with their money.

“I never imagined things would end this way and I am forever sorry for everything that’s taken place and all the effect it had on everyone involved,” Karpeles said earlier during the bankruptcy saga. Regardless of how the matter plays out in Japan, Karpeles faces more legal trouble in the U.S. where former Mt. Gox clients filed a lawsuit against him several months ago. Karpeles’ lawyers want the lawsuit dismissed on the basis that a U.S. court has no jurisdiction over the matter.

What do you think of the continuing Mt. Gox saga? Let us know in the comments section below.


Images courtesy of Shutterstock.


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Tags in this story
Bitcoin, Cryptocurrency, Exchange, Hack, Japan, Mark Karpeles, Mt Gox, N-Featured, prosecution, Tokyo District Court, Trial
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Jeffrey Gogo

Jeffrey Gogo is an award winning financial journalist based in Harare, Zimbabwe. A former deputy business editor with the Zimbabwe Herald, the country's biggest daily, Gogo has more than 15 years of wide-ranging experience covering Zimbabwe's financial markets, economy and company news. He first encountered bitcoin in 2014, and began covering cryptocurrency markets in 2017