cryptovest.com
Japan’s prosecutors have proposed a 10-year prison sentence for Mark Karpeles, the former chief executive officer of the now-bankrupt cryptocurrency exchange Mt.Gox, Nikkei Asian Review reported on Wednesday. The authorities are accusing Karpeles of embezzling 340 million yen (nearly $3 million) from the platform’s clients. Karpeles denies all charges.
Prosecutors claim that the ex-CEO took the money from the Mt.Gox accounts and was using the funds for business acquisitions and paying rents in the period of September-December 2013. Karpeles rejected those claims during a court hearing on Wednesday by saying that the money was given as a temporary loan. However, according to the judicial authorities, the former CEO betrayed his customers, because the exchange was obliged to store the client’s money, not to invest it or give loans, as it was offering custodian services.
“There was no documentation of loans and there was no intention of paying back [the money],” prosecutors explained during their final argument at Tokyo District Court.
“His responsibility is severe.”
The court verdict is expected in the coming months.
Mt. Gox, which at one time was the largest global Bitcoin (BTC) exchange, went bankrupt in February 2014 after 48 billion yen ($423 million) worth of BTC suddenly disappeared. Karpeles claims that the trading platform experienced a hack attack and the accident was not related to an alleged theft of the funds by the company’s team, and he denied accusations of his direct involvement. Currently, Japan’s prosecutors are still not investigating the fund’s disappearance, according to the Nikkei Asian Review.
The Tokyo District Court began the Mt.Gox bankruptcy proceeding in April 2014. In June of this year, the court allowed a civil rehabilitation process, which paves the way for repaying victims in Bitcoins. The process for sending proof of rehabilitation claims ended on October 22, but later it was prolonged for two additional months. The victims must fill the repayment form until midnight Japan’s time (15:00 UTC) on December 26.