- Mark Karpeles was convicted for tampering with computer data
- He was acquitted over embezzlement charges
- Mt. Gox was shut down in 2014 after 850,000 Bitcoins disappeared from its virtual vaults
A Japanese court has found the man who masterminded the collapse the giant Mt. Gox cryptocurrency exchange guilty of tampering with data but acquitted him of all other charges. The man is therefore unlikely to cool his heels in jail over the loss of over USD 500 million worth of Bitcoin belonging to investors.
Harmed the Users’ Trust Greatly
The court sentenced the 33-year-old French businessman Mark Karpeles to a suspended two and a half year jail term on Friday, March 15, 2019, after it found him guilty of manipulating data. However, the high-flying computer whizz was acquitted of charges relating to the embezzlement of millions from client accounts. The summary ruling by the court said that Karpeles:
“Harmed the users’ trust greatly” by manipulating data and abused his expertise as an IT engineer and his position and authority.”
The prosecution had accused Karpeles on some charges that included embezzlement and aggravated breach of trust calling for a ten-year prison sentence. However, the Tokyo District Court cleared Karpeles of all other charges and only convicted him for the falsification charges. The court has also ordered to pay for part of the cost of the trial.
Suspended Prison Sentence for the Falsification Conviction
Tokyo prosecutors had indicted Karpeles, who was arrested in 2015, on a series of charges, including embezzlement and aggravated breach of trust. The prosecutors claimed the man had pocketed over USD 3 million of his clients’ money to furnish his lavish lifestyle and called for a 10-year prison sentence.
But the Tokyo District Court on Friday found Karpeles not guilty of the other charges and handed down a suspended prison sentence for the falsification conviction, where he was found guilty of illegally tampering with Mt. Gox’s electronic records to deceitfully inflate the company’s holdings by USD 33.5 million.
The judge handed Karpeles a two and a half year sentence with a four-year suspension. This technically means he will not be serving any time behind bars unless he commits a crime in the next four years.
More Questions than Answers
The acquittal of Karpeles on the more serious charges of embezzlement and aggravated breach of trust raises more questions than answers in a country where the conviction rate for criminal charges is over 99 percent. The judge said he threw out the embezzlement charges as there was no financial damage caused to Mt. Gox and added the Karpeles didn’t intend to cause any damage.
Mt. Gox was at the time of its collapse the leading Bitcoin exchange but was already struggling financially before the alleged hacking incident. Things went from bad to worse when U.S. government agents seized over USD 5 million from the exchange’s accounts in 2013 for falsifying bank documents. The loss of cash caused the exchange to go into bankruptcy in 2014 leaving behind 30,000 angry investors.