Former Court Building in Japan

The former CEO of now-defunct Bitcoin (BTC) Exchange Mt. Gox, Mark Karpeles, was found guilty of of tampering with financial records, but innocent on the charges of embezzlement, Bloomberg reported on March 15.

Karpeles received two and a half years of suspended sentence, after being found guilty of mixing his personal finances with those of the exchange, so as to conceal the platforms losses. In order to avoid jail time, he must maintain a good record over the next four years. The Tokyo District Court, however, cleared Karpeles of the embezzlement charges, stating that:

“The charge of electronic record tampering is true and deserves punishment, but there’s no criminal evidence of embezzlement.”


This verdict came almost five years after the exchange filed for liquidation back in 2014, when it claimed it was hacked and lost 850,000 BTC, valued at roughly $500 million at the time. Karpeles allegedly found 200,000 of the missing Bitcoins in a cold storage in the summer of 2015, just before charges were brought against him.

Karpeles has maintained his innocence from the beginning of his trial back in July 2017. He has also accused the Japanese Justice system of unfair treatment, which Bloomberg noted has a 99% conviction rate. According to an interview with various media outlets, he was interrogated for months without a lawyer and “bullied” to sign a confession, a process which caused him to lose 77 pounds over 11 months.

The Japanese bankruptcy court, which oversaw the case initially, sided with creditors in June of last year to move the case to civil rehabilitation. This allowed the creditors to file for receiving their bitcoins in their original form, rather than receiving them in fiat currencies. This January, the deadline for creditors to file a proof of claim was extended to March 15, after which Mt. Gox’s trustee will submit a rehabilitation plan to the court.