Former Mt. Gox CEO Karpeles Charged for the embezzlement of US$2.62 Million Worth of Bitcoin

Previously, the Tokyo District Public Prosecutors Office indicted Mark Karpeles with embezzlement. This week, The Guardian disclosed that the former Mt. Gox CEO has been alleged by the Japanese Prosecutors for the embezzlement of US$2.62 million worth of bitcoin.

Karpeles however, denied the charges and claimed that he “had intended to pay back the money,” reported the Yomiuri Shimbun.

Bitcoin Cannot be owned

On August 6, the Tokyo District Court ruled that the bitcoins lost during the collapse of Mt. Gox cannot be reimbursed, because virtual currency cannot be subjected to ownership. Some reasoned that the Japanese prosecutors cannot charge Karpeles with Embezzlement since bitcoin is a virtual currency, and according to the ruling of the Tokyo District Court, bitcoin cannot be owned.

Embezzlement is an act of deceitfully secreting assets by one or more persons that have been entrusted with such assets. Karpeles has admitted to manipulating the balance of a bitcoin account to test the computer system, but taking into account the ruling of the Tokyo District Court, this would be better defined as fraud.

On July 31, Karpeles was expected to face charges of fraud, for manipulating user account balances and using private electromagnet records. The Japanese police alleged Karpeles for embezzlement of deposited funds for deducting balances on Mt. Gox bitcoin wallets and for covering incoming bitcoin buy orders with fake accounts.

The allegations of the Japanese Police and law enforcement against Karpeles and the Mt. Gox saga infuriated the bitcoin community and influential figures of the industry, like Gavin Andresen, chief scientist of the Bitcoin Foundation.

“He had (has) the ego of someone wanting to prove themselves, some antisocial behaviours, some social behaviours, and everything in between. He’s still a complete mystery to me, and absolutely unpredictable. He’s a maverick, and that’s coming from someone who knows people (in my opinion) pretty well,” said Gavin.

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