6500000 Bitcoins Lost Forever, Mt. Gox Owner to Meet His Fate in Court on Friday March 15

Mt.Gox-founder

6500000 Bitcoins Lost Forever, Mt. Gox Owner to Meet His Fate in Court on Friday March 15

The infamous Mt. Gox saga will finally meet an end in the Japanese Courts on 15th March 2019. The owner of the exchange, French Mark Kerpeles, 33, is accused of ‘faking digital data and embezzling millions of dollars ($3 million).’; If found guilty he will be heavily penalized and might serve a sentence of ten years. Here is a small recap of the entire episode:

2014 Mt. Gox Shutdown

In February 2014 Mt. Gox had stopped withdrawals and trading on its exchange reportedly due to maintenance issues. However, on 28th February 2014, it filed for bankruptcy claiming that the most significant exchange of the world at the time had been hacked of 850000 Bitcoins.

The Bitcoin market soon plummeted, and investors lost around $425 million worth of Bitcoins at the time. The case was brought to light at the Japanese Court, and Mark Karpeles, the owner of the exchange, was held accountable.

In March 2014, a public release on the website announced that they had recovered 200000 Bitcoin from the cold storage wallets of Mt. Gox Exchange. The funds were held in ‘trust’ by the Japanese Authorities for credit protection.

2015 Case Proceedings: 650000 Bitcoins Lost Forever?

After the revelation of the 200,000 Bitcoins, the investigation reached a dead-end due to lack of KYC and ALM compliances at the time.

Mark Karlepes was later arrested in Japan in August 2015. Kerpeles is alleged to have manipulated the exchange data for years during the running of the exchange embezzling almost $3 million. He served one year of imprisonment until July 2016 when before he was released on bail.

This is a very small amount with respect to the value of 6500000 Bitcoins still reported missing at the exchange. Nevertheless, if found guilty, he would be penalized heavily.

Satoshi Mihira, chief attorney at Mizuho Chuo law firm, said: “If it was an outside hacker who stole the currency, it’s a problem. But if he stole even part of the money, it would be embezzlement.”

How Much Did The Investors Actually Lose?

The proceedings against Mark Karpeles could add some funds to total credit amount, however, the illicit owner of 6500000 Bitcoins from Mt. Gox still looms at large.

Nevertheless, all is not lost for its investors. In June 2018, when the price of Bitcoin was $6200, the Tokyo District Court had initiated a credit reimbursement program known as civil rehabilitation. Funds to the tune of 170,000 Bitcoins and its hard fork Bitcoin Cash (BCH) worth roughly $1.2 billion were credited back to its ex-customers and debtors. The amount credited is still almost three times the amount that was reportedly lost during the heist.

“Enormous assets…will be returned to creditors of Mt. Gox,” Shin Fukuoka, a leading attorney, and partner at Japan’s Nishimura & Asahi law firm, he also wrote in a statement. “This is the creditors’ victory.”

Prosecutors’ Claims Against Kerpeles

The prosecutors against have filled for a 10-year sentence and reimbursements to creditors from his personal assets. According to the prosecutor, they have reports of extravagant spending and investments by Mark Karpeles which might indicate that the funds were ill-founded.

They have found considerable investment in a 3D-printing software business that had nothing to do with the exchange. Furthermore, a $54,000 worth canopy bed, thousands of dollars on overseas trips for his distanced wife,  and spent thousands of dollars on living a luxurious life (reportedly $120,000 annually).

Karpeles’ Defence

The owner of the disputed exchange has been active on social media ever since his release. Although he has been accused of fraud, and the investors and ‘Twitterati’ have bad mouthed Karpeles; He continues to maintain a non-guilty stand.

“Most people will not believe what I say. The only solution I have is to actually find the real culprits,” he told reporters after the hearing.”

 

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6500000 Bitcoins Lost Forever, Mt. Gox Owner to Meet His Fate in Court on Friday March 15
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6500000 Bitcoins Lost Forever, Mt. Gox Owner to Meet His Fate in Court on Friday March 15
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The infamous Mt. Gox saga will finally meet an end in the Japanese Courts on 15th March 2019. The owner of the exchange, French Mark Kerpeles, 33, is accused of 'faking digital data and embezzling millions of dollars ($3 million).'
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Nivesh Rustgi 43 Articles

Nivesh from Engineering Background is a full-time Crypto Journalist at Coingape. He is an atheist who believes in love and cultural diversity. He believes that Cryptocurrency is a necessity to deter corruption. He holds small amounts of cryptocurrencies. Faith and fear are two sides of the same coin. Reach out to him at [email protected]