Former CEO of Mt. Gox bitcoin exchange arrested

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By Larry Banks

The former head of the collapsed bitcoin exchange Mt. Gox, Mark Karpeles, was arrested at the weekend in relation to the disappearance of hundreds of millions of dollars of the virtual currency, according to Japanese media.

Mt. Gox bitcoin head arrested in Japan

French born Karpeles, 30, is suspected of falsifying data regarding the balance left in the exchange, which was at one time the largest hub in the world for trading in the digital currency.

Police have so far not been able to confirm the reports, however.

In February 2014, Mt. Gox filed for bankruptcy and said that 750,000 bitcoins and another 100,000 belonging to the exchange were stolen due to a software security issue.

Those lost funds were worth around $480 million when the company filed for bankruptcy. My. Gox also said that over $27 million was missing from its bank accounts in Japan.

Karpeles blamed hackers for the loss and later said that he had managed to recover 200,000 of the stolen bitcoins. He is known as a geek who has previously said he was uncomfortable in France and had not been back in years. He became interested in bitcoin when one of the customers of his web-hosting services wanted to pay in the currency.

Mt. Gox soon became dominant in the global trade in bitcoins, but in 2012 employees at the Tokyo-based company challenged Karpeles on various issues such as whether client’s money was being used to cover the costs of running it.

SOURCE: Reuters.

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