But the Tokyo District Court on Friday found Karpeles not guilty of the other charges and handed down a suspended prison sentence for the falsification conviction, where he was found guilty of illegally tampering with Mt. Gox's electronic records to deceitfully inflate the company's holdings by United States dollars 33.5 million. These cases are setting precedents for future exchange hacks and the responsibilities of the company and executives at cryptocurrency exchanges. The incident with Mt.Gox pushed the country to introduce a licensing framework for cryptocurrency exchanges. After a long-fought court battle, the court has declared Karpeles guilty of data manipulation.
Tokyo-based Mt. Gox suddenly closed its doors in 2014, taking 850,000 Bitcoins with it. The selling of such massive volumes could be a big part of the reason Bitcoin fell from its high of $20,000 to its current price of $9,300. In summer 2015, just before the charges were brought against him, Karpeles supposedly found 200,000 of the missing BTC in a cold storage.
"When buying Mt. Gox I should have had people around me to advise me and help with the management starting with the Mt. Gox transfer contract". He was handed a 33-month suspended sentence, Bloomberg reports. The court ruled him not guilty of embezzlement, saying he acted without ill intent. As reported by Bloomberg, Mark used his personal finances to hide the negative balances on the exchange's financial records.More news: Cheltenham Festival gets the go-ahead
Prosecutors had claimed that Karpeles had embezzled some 341 million yen ($3 million) of clients' money and splashed it on a lavish lifestyle. He must maintain a good record over the next four years to avoid jail time.
We find the charge of electronic record tampering to be true and that it deserves punishment, but there's no criminal evidence re embezzlement (dominant or reserve type) or violations of company laws, resulting in a not guilty ruling.
"Harmed the users' trust greatly" by manipulating data and abused his expertise as an IT engineer and his position and authority".More news: Far-Right Australian Politician Fraser Anning Egged By Teen
The legal woes for Mark Karpeles are not truly over.
Founded in 2011, Mt. Gox was one of the first well-received Bitcoin exchange which reportedly once handled 70 percent of the world's Bitcoin transactions. However in early 2014 there was speculation that two accounts on Mt. Gox (nicknamed "Willy" and "Markus" by researchers) had exhibited odd patterns of trading activity that may have contributed to BTC's rapid rise.More news: Phil Mickelson reveals he used college counselor tied to bribe scandal