The story of Mt.Gox is getting murkier; reports in Japanese media suggest that the disgraced Bitcoin exchange Mt. Gox’s CEO, Mark Karpeles, could have used the embezzled funds on sex workers.
As per a report in The Japan Times, the erstwhile CEO was facing fresh charges while Jiji Press, another news outlet, citing the police, said that he used the funds on “several women whom he met at venues that offer sexual services.”
Mt.Gox was based in Tokyo and was shut down last year after it acknowledged that 850,000 Bitcoin, worth around $480 million at that time, had disappeared from its digital vaults and went on to file for bankruptcy protection.
France-born Mark Karpeles, 30, was first arrested by Japanese law enforcers in August for transferring ¥20 million ($166,000) of the client money to his bank account during 2011 and 2013.
At present, he is facing fraud charges over the disappearance of the virtual currency Bitcoin worth millions of dollars.
The fresh charges, however, are not out of the blue for Mark who was called the “disgrace to the cryptocurrency industry” along with Charlie Shrem, by his fellow co-founder Gavin Andresen.
Mt. Gox once was the biggest Bitcoin exchange around, however, later it was hit by a hack, and in that, it claims, that it lost several Bitcoins.
Investigations led the law enforcers to Mark and later it emerged that he had tweaked accounts, allegedly, to divert the funds to his own account.
However, Mark continues to deny all the allegations and had even penned a post where he pointed out that the market needs to learn a lot from this tragic episode.
In the post, the former CEO of the now-defunct Mt.Gox said that “the current situation (of Bitcoin exchanges) is nothing but another disaster waiting to happen.”
Mark had earlier made startling claims insisting that the stealing of the cryptocurrency Bitcoin was the work of US agents, stating, that the aim of these agents was to destroy Mt.Gox.
He had even claimed that some of the lost 200, 000 coins were discovered in a cold wallet.