Mark Karpeles, who has been spending time in a Japanese jail for the past 10 months is finally out. The ex-CEO of now defunct Mt Gox Bitcoin exchange which declared bankruptcy after losing large amounts of bitcoin to hacking incidents has been granted bail by the Japanese court after he managed to deposit the bail amount of close to $100000.
The images of Mark walking out of the prison shows him to be a completely different person after he lost weight over the past few months. Mark Karpeles was arrested in August last year while investigating the fraud and theft of bitcoin from Mt Gox. Mt Gox was one of the largest bitcoin exchange in the world by 2013, while it was handling over 70 percent of total transactions happening over the Bitcoin Network. The troubles began after the exchange declared that over 850,000 bitcoin worth over $450 million was stolen from the exchange due to repeated hacking attempts. This forced the exchange to declare bankruptcy, leaving the investors short of their funds deposited in the exchange.
A history of trouble with regulations followed by reports of theft and ultimately the bankruptcy filing was subjected to investigation after investors filed lawsuits against the exchange. Apart from hacking incidents, the investigations determined that gross mismanagement and embezzlement to be the cause of Mt Gox’ meltdown. Mark Karpeles was arrested for embezzling funds belonging to the investors and channeling it to other accounts belonging to him and companies owned by him. Investigators also found that Mark had earlier falsified the exchange records to inflate total bitcoin holdings either to cover up the theft or to siphon the bitcoin himself.
The Japanese law enforcement authorities along with the court-appointed trustee and Payward Group – the company behind Kraken Bitcoin exchange were involved in the investigation of Mt Gox and Karpeles. According to Kraken, the investigation is said to be over and the exchange has reviewed claims for reimbursement from investors affected by the collapse of Mt Gox. Kraken is expected to reimburse the approved claims in part or entirety depending upon the number of claims against the available bitcoin for distribution.
Not many customers are happy with the developments as a significant number of claims are said to have been rejected by the Mt Gox trustee. However, with Mark Karpeles out on bail combined with the delay in publication of findings from the investigation, the actual outcome is yet unknown. There are questions now being raised by the Bitcoin community about the huge amount of funds used to pay for the bail. The question everyone seems to be asking is whether the bail amount came from the funds that went missing from Mt Gox.
Anyways, Mark Karpeles won’t be going anywhere for some time as his bail conditions require him to stay in Japan until his fate is decided by the Japanese legal system based on the Mt Gox investigation.
Ref: News24 | Kraken | Image: NewsBTC