Police arrested Mark Karpeles, the CEO of the failed bitcoin exchange Mt Gox, in Tokyo on August 1 over allegations he had manipulated data to artificially create nearly $1 million worth of Bitcoin. He has been in custody for the past three weeks, the maximum time suspects can be detained without official charges in Japan.



Tokyo police served another arrest warrant on Karpeles on Friday, suspecting he misappropriated ¥321m ($2.6m) of customer deposits into other personal projects. According to Yomiuri newspaper, the funds were spent on purchasing software rights and a $48,000 bed.



Karpeles lawyer denied the allegations, saying that the "the deposits were used for investments in new businesses while the bed was purchased as interior decoration for his guesthouse, both of which were meant as marketing tools to promote the use of bitcoins."



"Despite the long detention period, the fact that investigative authorities could only come up with these reasons to make their case for embezzlement is evidence that Mark was not involved for personal reasons in the disappearance of massive cash and bitcoins," the lawyer added.



Mt Gox once accounted for 80% of bitcoin trading volume but ever since it announced its bankruptcy, it has been surrounded by scandals.



At the time of the company's collapse, around 744,400 BTC (then worth $340m) was reported missing. Karpeles said he found some 200,000 of the lost coins in cold wallet later; however, speculations still exist over insider involvement.