Mark Karpeles, the former CEO of Mt. Gox, who was once known as the “Baron of Bitcoin,” was acquitted of all charges against him, except falsifying financial records. Karpeles was found guilty of electronic tampering. For that crime, Karpeles received a suspended two-and-a-half-year prison sentence. The suspended sentence implies that Karpeles may not have to serve time at all, with one exception. If Karpeles is found guilty of any other violation within four years of his suspended sentence, then he will have to serve time, according to Coin Desk.
“The charge of electronic record tampering is true and deserves punishment, but there’s no criminal evidence of embezzlement,” the court said in its verdict, according to Bloomberg. The court says that Karpeles did do “massive harm to the trust of his 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.”
Prior to 2014, Karpeles’s Tokoyo-based corporation, Mt. Gox, was the worldwide leader in the cryptocurrency exchange. However, that changed in 2014, when Mt. Gox experienced a cyber theft that resulted in $500 million worth of bitcoin vanishing. Karpeles claims that he did try to recover the disappearing cryptocurrency, and at one point announced he was able to recuperate about one fourth of the missing bitcoins. However, Karpeles’s bitcoin recovery claims wound up creating a vast amount of legal problems for him. As soon as he was questioned about the bitcoin recovery, he was indicted on a bevy of allegations.
Mt. Gox CEO Mark Karpeles cleared of embezzlement charges https://t.co/ocHpPJkUzQ
— Celebrity&Tech News (@CelebTechNews) March 15, 2019
In fact, Karpeles has been on trial since 2017, and prosecutors were initially hoping to imprison him with at least a decade’s worth of prison time. However, the Tokoyo District Court felt that the prosecution was never able to prove that Karpeles was the reason the bitcoin vanished, or that he was trying to manipulate the system for his own benefit. The one charge Karpeles was found guilty of, that of electronic tampering, was proven because Karpeles had tried to hide the fact his company had money stolen by hackers by transferring over some of his personal funds, according to Bloomberg.
Karpeles purchased Mt. Gox in 2011, and through his leadership, the company became the world’s largest organization for purchasing and selling virtual currencies, including bitcoin. However, when word came out about the Mt. Gox hacking, many investors pulled their money from the markets, and the cryptocurrency exchange then experienced a serious slump. Since there is a lack of regulation over the cryptocurrency market, bitcoin and other currencies like it have never quite recovered their status with their former investors.