Blog / Articles / All about Karpeles’ arrest in Japan this weekend

All about Karpeles’ arrest in Japan this weekend

All about Karpeles’ arrest in Japan this weekend

Mark Karpeles, the CEO of Mt. Gox, the bankrupt Bitcoin exchange which totalled the cryptocurrency’s reputation back in 2014 was just arrested by Japanese law enforcement in Tokyo, Japan. The arrest comes after hundreds of man-hours spent in order to investigate whether he is guilty for all the accusations that have been brought upon him.

If you’re not yet aware, Mt. Gox was the world’s biggest exchange, handing more than 70% of the world’s Bitcoin transactions. It operated for a couple of years until 2013-2014, when Karpeles came under investigation for fraud-related activities. Soon after, the exchange filed for bankruptcy, and investors quickly began taking their money back, but as the liquidation process begun, the exchange announced that over 850,000 Bitcoins had been either stolen or lost. At that moment, this was worth over $800 million.

With this in mind, police believe that he manipulated the servers in order to transfer the bitcoins to his personal wallets. Additionally, he is also under investigation for creating around $1 million through some further exchange rate manipulation. No answers were given at the beginning, therefore, the criminal investigation started, making him one of the most hated members of the Bitcoin community, as the loss of reputation that Bitcoin suffered brought its value down by over $800, which is a massive amount considering the fact that the value of one Bitcoin currently oscillated between $250-$290.

Once the exchange collapses, ex-employees of the company went ahead and accused Karpeles of fraud, and of manipulating the servers to generate profit. Together with this, there are also a couple of reports pointing out that he paid for the exchange’s operating costs using money which belonged to the public, but which was stored in their public accounts. While Karpeles supposedly found a large sum of the money on a USB drive, most of the Bitcoins are officially considered as gone forever, although someone obviously has them.

Karpeles was also accused a while back of running Silk Road, the giant drug marketplace where millions of Bitcoins were traded in exchange for a variety of narcotics, drugs and some illegal objects as well. While its founder, Ross Ulbricht was recently sentenced to life in prison, police still believe that Karpeles had something to do with the store as well.

His arrest will likely reveal some more information about how the scams were carried out, how the man managed to create money by manipulating the system and whether he had anything to do with the Silk Road store.

What do you personally think about Karpeles? Is he guilty, or is there something else to this matter that we don’t know yet?

⏴ Back to Blog