Today, Tokyo police re-arrested former Mt. Gox CEO Mark Karpeles for the embezzlement of $166,000 worth of U.S. funds, according to local Japanese newspaper Yomiuri.

Karpeles is currently in custody for fraud and money-laundering allegations and will be held by Japanese police for further interrogation.

Over the past two months, the Karpeles investigation has developed into a national scandal, involving the Japanese government and various law enforcement agencies, due to the inaccurate reporting from both international and Japanese media networks including Yomiuri and MSN.

Since the beginning of the investigation, Microsoft news network MSN and a few other mainstream Japanese media outlets have misreported Karpeles as the “bitcoin CEO,” confusing viewers who are not fully aware of the situation.

This morning, MSN reported, “Bitcoin CEO spent embezzled funds on prostitutes,” infuriating many bitcoin entrepreneurs and developers.

In response, security expert, author and Let’s Talk Bitcoin podcast host Andreas Antonopoulos said, “If your local journalists are reporting about the “Bitcoin CEO” today, they understand neither bitcoin nor journalism.’