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Police Arrest Mark Karpeles of Mt. Gox 17 Jul 2016, midnight

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9 Aug 2015 by Japanese police arrested Mark Karpeles on Saturday, of collapsed Bitcoin exchange Mt. Gox, for accusations that he manipulated the company’s system to increase the balance of user accounts. The Tokyo based company was once the world’s most prominent Bitcoin exchange platform by trading volume. In February 2014, it filed for bankruptcy, stating losses of 750,000 of its customers Bitcoins as well as 100,000 of its own, worth around $500 million at the time. Japanese media broadcast footage of Mr. Karpeles being led by police from his apartment Saturday morning. A police spokesperson explained how Mr. Karpeles is suspected of manipulating his own account, by making it appear that a million dollars was added to it. The association between the arrest and the missing Bitcoins was unclear, however, another official said many of the Bitcoins Mr. Karpeles claimed to be stolen may have never existed in the first place. When troubles at Mt. Gox began early 2014, it led to world-wide accusations from Bitcoin users and exchanges. Enraged account holders flew out to Mt. Gox’s headquarters in Tokyo’s Shibuya district for a sit-in protest. Mr. Karpeles is yet to be formally charged; in Japan, suspects can be detained for up to 23 days without formal charge or the possibility of bail, he was detained on Saturday. Mr. Karpeles blamed hackers for the disappearing Bitcoins and said the company’s security measures were weak. Mt. Gox stated it later salvaged some of the missing Bitcoins, but says the whereabouts of the majority of the missing currency remain lost and its unclear how much of the companies assets is salavageable. Mt. Gox, now in liquidation had Payward Inc. appointed as trustee. Payward Inc. another Bitcoin exchange, based in San Francisco, is tasked with helping the court with the work. A spokesperson at Payward declined to comment on the allegations about Mr. Karpeles or Mt. Gox. After the Mt. Gox bankruptcy, Mr. Karpeles relocated from his skyscraper residence in Tokyo’s upmarket Shibuya district to a lower rent location. Karpeles an anime fan, moved to Japan in 2009 with his cat and purchased the exchange which was initially started as a trading platform for playing cards back in 2011.


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