Court Ruling — Mt Gox Founder Mark Karpeles Didn’t Embezzle Funds

The Tokyo District Court has ruled that Mark Karpeles, former CEO of the now-defunct crypto exchange, Mt Gox is not guilty of embezzlement and breach of trust leading to the hack and subsequent collapse of the business in 2014.

However, according to a Bloomberg report on March 15, the exchange operator was found guilty of manipulating electronic records of the business and will now face less severe punishment. Specifically, the court found that Karpeles had mixed personal finances with that of the exchange, possibly as a way to conceal the exact amount stolen by hackers.

Bloomberg quotes a section of the court ruling as reading,

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

Additionally, it blamed Mark Karpeles for causing “massive harm to the trust of his users,” alleging that “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.”

The court thus handed Karpeles a suspended sentence for thirty months (2 years and 6 months), meaning that he will only go to jail if he commits another offense within the period he is under watch.

The court decision gradually brings to a climax one of the longest cases in the crypto industry with Karpeles and Mt Gox under fire since 2014 when it lost roughly 800,000 BTC, worth around $460 million at the time of the incident to hackers.

Mark Karpeles opponents in court had wanted a 10-year sentence claiming that he embezzled the funds and channeled it into another project, a situation that the current court decision has found untrue.

Meanwhile, Coinfomania has previously reported efforts to pay back users who lost funds on the exchange, which arguably handled 90% of Bitcoin trading volumes globally before the unfortunate incident.