Bitcoin firm MtGox CEO Mark Karpeles arrested in Japan

mtGox CEO Mark Karpeles was arrested in Japan on suspicion of fraud of lost bitcoins.

mtGox CEO Mark Karpeles was arrested in Japan on suspicion of fraud of lost bitcoins.

The CEO of the failed MtGox company that once acted as the world’s largest exchange of the virtual currency, bitcoin, was arrested in Japan. Born in France, he moved to Japan in 2009.

Mark Karpeles, 30, the CEO of MtGox was held for the loss of virtual currencuy amounting to bitcoins worth $387million in February 2014. Police suspect that he must have accessed the exchange’s computer system to manipulate data and its balance. MtGox, however, said it was due to a bug and he later filed for bankruptcy.

Karpeles, a French-born was found in Japan when he was arrested last weekend. He was suspected to have manipulated $1 million worth bitcoin currency last February and a month later he said to have had found 200,000 lost bitcoins. Later the firm said $116million worth bitcoins were found in an old digital wallet from 2011.

Bitcoin is a virtual currency that uses cryptographic protocol and a global network of computers that oversees which coin was used where and by whom.

Karpales was a founding member of the Bitcoin Foundation, founded in 2012 to standardize Bitcoin, and served on its board until February 2014.

He acquired 88% of the Tokyo-based company Mt. Gox from programmer Jed McCaleb in 2011 but his firm MtGox filed for bankruptcy in Japan on February 28, 2014 and for Chapter 15, Title 11, United States Code bankruptcy in the United States (Texas) in March 2014.

Karpelès was subpoenaed by the United States Department of the Treasury’s Financial Crimes Enforcement Network to appear in Washington, D.C. to provide testimony on April 18, 2014. Karpelès, in a court filing by Mt. Gox lawyers, responded that he does not have a lawyer for this matter and therefore declined to appear.

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