Mark Karpeles, the former chief executive of the now-defunct Mt. Gox cryptocurrency exchange, has been found guilty of tampering with financial records but will likely avoid jail time after being awarded a suspended sentence.
The former executive, a well-known individual in the Bitcoin space most often linked to the abrupt and sudden collapse of the Mt. Gox cryptocurrency exchange in 2014, was on trial over the alleged embezzlement of funds and account manipulation.
The Tokyo District Court has now concluded that while Karpeles fiddled the books, often mixing personal and business cash flows to hide the loss of funds caused by cyberattackers, he did not participate in any embezzlement schemes, as reported by Bloomberg.
Karpeles was issued a 2.5-year sentence, suspended for four years. As long as the former Mt. Gox chief toes the line and does not get in trouble with the law over the next four years, Karpeles will not have to go to prison.
As reported by the publication, the court said there was “no criminal evidence of embezzlement,” but the “charge of electronic record tampering is true and deserves punishment.”
Karpeles was not on trial in relation to the loss of Bitcoins which have not been recovered since the Mt. Gox crash.
Tokyo-based Mt. Gox suddenly closed its doors in 2014, taking 850,000 Bitcoins with it. This figure was later revised to 650,000 Bitcoins lost after 200,000 Bitcoins were ‘found’ in an old wallet, and Karpeles was arrested a year later.
“Upon discovery the BTC were moved to a safer environment and lawyers worked on how to announce this to the court,” Karpeles said. “Announce[ment] was made after those BTC were moved to a new paper-based cold wallet with approval of the court.”
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Karpeles has always maintained his innocence in relation to the theft. In a Reddit Ask Me Anything (AMA) session conducted last year, he said, “I am innocent. Proving this in front of a Japanese court is a challenge but I’m not giving up.”
The court’s decision marks the closure of another chapter in the Mt. Gox story. There is still an ongoing battle between ownership rights and contract claims, creditor cases, and many former investors still hope to one day recover their lost Bitcoin, a possibility which is now controlled by the court and civil rehabilitation trustees.
When asked what Karpeles would do if he could go back and change one thing about Mt. Gox during the AMA, the former Mt. Gox CEO said last year:
“When buying Mt. Gox I should have had people around me to advise me and help with the management starting with the Mt. Gox transfer contract.
I’m a tech guy, and Bitcoin was a tech thing at the time. In April 2011 there was an article in Forbes which changed Bitcoin forever, and I found myself managing emergencies every day without any time to do the work that’d need to be actually done.”