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The Former CEO of Mt. Gox Is Going to Trial for Allegedly Embezzling Bitcoins

The trial may close a notorious chapter in bitcoin’s history.

by Jordan Pearson
Jul 10 2017, 3:29pm

Few events in the wild history of bitcoin are as notorious as the fall of Mt. Gox. The Tokyo-based online exchange for buying and selling bitcoins was one of the biggest in the world before it unceremoniously went bankrupt and lost everyone's bitcoins, worth millions of dollars, in 2014. The event arguably sent bitcoin into a tailspin that the currency didn't recover from until this year.

Mt. Gox's former CEO, Mark Karpeles, has stated that the loss of coins was due to a hacker targeting the exchange. Still, the missing bitcoins have remained one of the most enduring mysteries in the bitcoin world, second only to the identity of the currency's anonymous inventor, Satoshi Nakamoto. Now, Karpeles will face criminal charges in a Tokyo courtroom on Tuesday for allegedly embezzling some of those coins.

Read More: How Mt. Gox Imploded

The trial has been years in the making. Karpeles is suspected of using the exchange to line his pockets with $1 million in 2013, according to the Associated Press. He was arrested by Japanese authorities in 2015, but let out on bail the following year. Karpeles has maintained his innocence over the years, and is expected to plead innocent, according to his lawyer, who spoke to The Japan Times.

Karpeles has been dogged by rumors of a lavish lifestyle since Mt. Gox imploded, giving fuel to incensed former customers who say they have yet to be reimbursed for their lost funds. Roughly 100 Canadians even attempted to launch a $500 million CAD class action lawsuit before eventually abandoning it in 2016, citing the cost of litigation. Often-cited media reports have described $11,000 penthouses and $48,000 beds, as well as more salacious allegations of spending money on escorts.

Whatever happens in the Karpeles trial, the people who are most likely to watch it closely are those who lost money in Mt. Gox. After all, it's possible that more details about the alleged hack will come forward during the proceedings.

For them, and especially those who believe Karpeles did embezzle funds, the trial offers an opportunity for some closure.