Former Mt. Gox CEO Mark Karpeles Arrested In Japan
Last year’s collapse of one of the largest Bitcoin exchanges Mt. Gox led many at the time to surmise that it was the beginning of the end of virtual currencies. At the time the rumors around the almost $500 million going missing were rife. The head of Mt. Gox Mark Karpeles at the time claimed that the Bitcoins were stolen due to a security hole in their system which was exploited by hackers.
It is being reported by Japanese media that the French Born Karpeles has been arrested in Japan in connection with the mysterious vanishing funds. Mt. Gox was once the largest global Bitcoin exchange and Karpeles is facing charges of falsifying data on the exchanges computer system in 2013 to artificially create $1 million. According to other Japanese media Karpeles is also under investigation for his possible part in the disappearance of the $473 million of Bitcoin at the time.
Karpeles claimed that he had managed to recover some 200,000 of the lost Bitcoins. The collapse of Mt. Gox shook the Bitcoin world to the core when all withdrawals were frozen in 2014. There are also reports in the Yomiuri newspaper that claim that Karpeles repeatedly transferred Bitcoins to his own account for the purpose of manipulating the value.
The collapse of Mt. Gox is the exact nightmare scenario that opponents to virtual currencies have warned of. Added to that is the volatility of Bitcoin that was trading at $40 a coin in 2011 and spiked to $1,100 in 2013. The current rate is around the $280 mark.