Mt. Gox CEO Mark Karpeles Found Guilty of Record Tampering

By Prashant Jha

Tokyo District Court in its hearing of the Mt. Gox case has found the CEO of now defunct, MT. GOX Bitcoin exchange guilty of record tampering, while the embezzlement charges were dismissed. Mark Karpeles has been sentenced to a suspended jail term of 2.5 years.

The press note regarding the hearing read,

“The court convicted Mark Karpeles, a 33-year-old Frenchman, for falsifying computer data but acquitted him over charges of embezzling millions from client accounts.”

The verdict of the case was translated by a Bloomberg reporter Nakamura, in a series of tweets. The reporter while translating the verdict in English said that it’s unlikely that Mark Karpeles, would be jailed as it is suspended sentence where the CEO of the exchange has been suspended for 4 years if he does something against the law, he will be jailed for 2.5 years.

According to the verdict translated by Nakamura, the court found that Karpeles was running a mess while tampering with official records to hide the missing Bitcoin, but he did not do it for personal gain. The court order details,

“We find the charge of electronic record tampering to be true and that it deserves punishment, but there’s no criminal evidence re embezzlement (dominant or reserve type) or violations of company laws, resulting in a not guilty ruling.”

The Victims are Yet to Receive any Compensation

The 2014 Mt. Gox debacle led to a loss of 850,000 Bitcoins, out of which 20,000 were later recovered. Despite the involvement of the court and a bankruptcy trustee getting involved to sell-off the recovered Bitcoin, the process has been put on hold due to another lawsuit filed by a business partner amounting to $16 billion.

The court in its verdict as translated by Nakamura acknowledged the fact that,

 “the creation and use of tampered records involved a monetary amount that was extremely large, resulting in severe damage to the trust of the users. There is no excuse for the defendant, who is an engineer with expert knowledge, to abuse his status and authority to perform clever criminal acts. We cannot look lightly upon the criminal responsibility of the defendant.”

Karpeles Promises to proceed His Return to the Creditors

After the court verdict came in the public domain, one of the Twitter users urged him to keep his promise that he made back in February, where he said that he will proceed everything he receives from the partners to the Mt. Gox creditors, which is not certain of receiving at all.

When a user asked about his promise and whether he would still keep his words, to which the former CEO replied in affirmative.

The 2.5 years suspended jail sentence might not look a strict punishment, but the courts cannot be blamed as the embezzlement charges did not stick and the court gave a “non-guilty” verdict over it.