A verdict is due tomorrow for charges of manipulating computer data and embezzling $3 million of customer money.
Former MtGox CEO Mark Karpeles is facing a lengthy prison sentence when a Tokyo court hands down its verdict tomorrow. Karpeles is accused of misappropriating millions of dollars of client money, while faking data to hide the thefts. He is alleged to have spent the money on luxury goods and items unrelated to the operation of the exchange, according to the Japan Times.
Gox has become a byword for shadiness, theft and incompetence in the crypto world as a result of the collapse of the exchange in 2014, with the loss of 650,000 customer bitcoins. To be ‘Goxxed’ means to be robbed or defrauded of bitcoins by an exchange, through hacking, insider theft or loss due to negligent security practices.
Karpeles has talked about his experiences in Japanese prison on social media in the time since his release. As he summarised in one post, ‘Poor service, bad food. Would not recommend.’ He also discussed being forced to sit upright and motionless in a hard chair for many hours on end, and others with knowledge of the Japanese prison system talk about forced marches and harsh, structured regimes.
Known for being overweight and informally dressed in his days as CEO, Karpeles emerged from prison not only far wealthier – thanks to bitcoin’s rise in price in the time he was inside – but a lot slimmer and healthier-looking too (prompting one bitcointalk user to comment, ‘my wife needs to go to jail in Japan’).
Karpeles has sworn that he is innocent, blaming hackers for the theft. However, the bar for innocence is high in Japan, and the case would not have progressed this far if there was not the likelihood of conviction. If he loses his case and is sentenced, he can still appeal, which will keep him out on bail.
And so the Gox saga rumbles on, five years after the collapse of the world’s largest bitcoin exchange catalysed the 2014 bear market. Surely, an end must be in sight?
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