TOKYO (Reuters) - A Tokyo court on Friday handed the founder of the now-defunct Mt. Gox bitcoin currency exchange a 2-1/2-year suspended sentence for his role in the loss of hundreds of millions of dollars worth of bitcoins and cash, Kyodo news agency reported.

The court suspended the sentence for Mark Karpeles for four years, finding the French national guilty of data manipulation but innocent on charges of embezzlement, Kyodo said.

Karpeles had pleaded not guilty on both charges.

Prosecutors had sought a sentence of 10 years against the 33-year-old Karpeles, it said.

Tokyo-based Mt. Gox once handled 80 percent of the world’s bitcoin trades but filed for bankruptcy in 2014 after losing some 850,000 bitcoins - then worth around half a billion U.S. dollars - and $28 million in cash from its bank accounts.

In its bankruptcy filing, it had blamed hackers for the lost bitcoins, pointing to a software security flaw.

The collapse of Mt. Gox damaged the image of virtual currencies, particularly among risk-averse Japanese investors and corporations. But the bankruptcy also prompted Japan’s government to decide how to treat bitcoin, and preceded a push by local regulators to license virtual currency exchanges.

Japan in 2017 became the first country to regulate exchanges at the national level, part of a government effort to exploit financial technology as a means of stimulating the economy.