Mt Gox, the largest bitcoin exchange at one time before its downfall attributed to alleged hacking attack is in the news again. This time, it is due to the arrest of the now defunct exchange’s former head.
The Japan based Mt Gox allegedly lost over 850,000 bitcoins amounting to over $450 million at that time when their systems were compromised by hackers in 2014. The main reason for disappearance of such a huge amount of bitcoin still remains unknown. The investigations hasen’t yielded any clear results so far and it is speculated that the disappearance of bitcoins from Mt Gox was due to theft, fraud, mismanagement or a mixture of all.
Mark Karpeles, who was in charge of Mt Gox during the time of the incident was picked up by the Japanese police yesterday after he was suspected of manipulating the exchange data in February 2013. According to Tokyo police’s official version, The French born Mark Karpeles might have inflated his account by over $1 million after making changes to Mt Gox’ computer system.
The Japanese media including Kyodo News has reported that Mark Karpeles is also a subject of an ongoing investigation to determine his involvement in the disappearance of thousands of bitcoin from Mt Gox. The Mt Gox incident had a huge impact on the Bitcoin industry, resulting in bitcoin prices skyrocketing to cross the $1000 mark. It also damaged the reputation of the virtual currency and got people second guessing their choice of digital currency and related services.
Reports about the disappearance of bitcoins from Mt Gox first surfaced after the company filed for bankruptcy in 2014. Mark Karpeles had put the blame on hackers for stealing those bitcoins. On a later date, he announced that he had managed to recover about 200,000 lost bitcoins in a cold wallet.
It is still unclear whether Mark Karpeles will be charged or not and if charged, the offences he might be charged with.