Tech by VICE

Mt. Gox CEO Mark Karpeles Has Been Arrested

Tokyo police finally get around to naming names in its lengthy investigation into the sudden disappearance of $473 million​ in Bitcoin.

by Michael Byrne
Aug 1 2015, 4:31am

Image: Getty

Mark Karpeles, the former CEO of spectacularly failed Bitcoin exchange MtGox, has been arrested in Japan. While he's not yet been charged, officials are holding Karpeles on suspicion of "manipulat[ing] the company's computer system to inflate its assets," according to the Wall Street Journal. The arrest comes as no surprise: It had been reported early Friday that the Tokyo Metropolitan Police Department was planning to take Karpeles into custody. Allegations include Karpeles falsifying data through the use of MtGox's computer system.

If you'll recall, MtGox collapsed abruptly in early 2014 after months of increasing customer complaints relating to delays in withdrawals. The delays culminated in the MtGox exchange suddenly halting all withdrawals on February 7. Two weeks later, the site suspended all trading activity and went completely offline. On February 28, the company filed for bankruptcy, citing the loss of $473 million in Bitcoin, or about 7 percent of the total value of the entire currency. The company blamed the loss on outside hackers, which Karpeles has continued to maintain.

Read more: How MtGox Imploded

Now, it seems that the Tokyo PD have finally gotten around to blaming Karpeles after revealing back in January that the vast majority of the missing currency had actually been stolen through the work of inside fraudulent transactions, according to investigators. Karpeles told the WSJ through IM that the allegations were "false" and that he would "of course deny" them.

Stay tuned: We'll be unpacking all of this in much greater detail this weekend.