2 min read

A Tokyo District Court has found Mark Karpeles guilty of tampering with financial records but has been cleared of embezzlement charges. He was also given a suspended two years and six months jail sentence unless he commits a violation within that period.

The highly anticipated ruling comes following what has been a hugely turbulent time for both Karpeles and investors of the now-defunct exchange Mt. Gox, which Karpeles was the head of.

The court stated in its verdict:

“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.”

In summary, the court agreed that how Karpeles ran the exchange was extremely bad, and he did tamper with records to hide the missing Bitcoin. However, he did not do so for personal gain and most importantly, had no ill intent. He instead used his finances to hide the massive losses the hack had left Mt. Gox from investors.

“The creation and use of tampered records involved a monetary amount that was extremely large, resulting in severe damage to the trust of the users.”

The judge further added:

“There is no excuse for the defendant, who is an engineer with expert knowledge, to abuse his status and authority to perform clever criminal acts. We cannot look lightly upon the criminal responsibility of the defendant.”

The end to this saga caps a tremendous fall for Karpeles, who after initially buying Mt. Gox in 2011, turned it into the biggest exchange in the industry, accounting for over 70% of Bitcoin trades.

However, the hack which resulted in the loss over 850,000 Bitcoins, now valued at well over $2 billion, caused the insolvency of the exchange and a two-year slump in the cryptocurrency markets.

Karpeles later recovered 220,000 Bitcoins. However, this led to increased scrutiny into the nature of the hack and brought questions as to whether Karpeles himself had somehow instigated or been involved at least in the crime.

Source