TOKYO -- Prosecutors on Wednesday proposed a 10-year prison term for Mark Karpeles, the former CEO of Tokyo-based Mt. Gox, which at one time was the world's largest bitcoin exchange.

The prosecutors accuse Karpeles of embezzling about 340 million yen from accounts that Mt. Gox managed on behalf of clients, doing so in the final four months of 2013. The prosecutors also say Karpeles used the money for business acquisitions and paying rent.

Karpeles has denied embezzling the funds, saying the money was meant to be accounted as a temporary loan.

In their final argument at the Tokyo District Court, prosecutors said, "There was no documentation of loans and there was no intention of paying back" the money. They demanded a harsh sentence, saying Karpeles betrayed his clients and used a huge amount of their money.

"His responsibility," the prosecutors said, "is severe."

Prosecutors allege that Karpeles illegally manipulated accounts by falsifying exchange data. They have also leveled violation of corporate law allegations against him.

Mt. Gox went bankrupt in February 2014 after 48 billion yen ($423 million) worth of bitcoin and 2.8 billion yen worth of cash vanished. Karpeles denies any involvement in the swindle, saying Mt. Gox was hacked. Prosecutors are not investigating the cause of the incident.

The Tokyo District Court in April 2014 put Mt. Gox into bankruptcy proceedings. In June this year, it put the exchange into a civil rehabilitation process that allows for repayments in bitcoin, which had risen in price since 2014.