MtGox chief found guilty of inflating cash balance

Mt. Gox's Karpeles verdict acquitted for embezzlement convicted for electronic data tampering

A former Mt. Gox employee has also described the Mt Gox's trading platform software as "spaghetti code", and Karpeles has been accused of spending more time trying to establish a bitcoin-friendly French restaurant in Tokyo than attending to the exchange affairs as it collapsed.

Karpeles was issued a 2.5-year sentence, suspended for four years.

In those emails, which TDB said were verified as genuine by law enforcement and Karpeles' lawyers, McCaleb suggested using automated trading bots to edge the bitcoin price upward and use United States dollars to purchase back the missing BTC.

Mt. Gox was the original Bitcoin exchange, transformed from a website that sold Magic: The Gathering playing cards to the largest Bitcoin exchange in the world, with over 80% market share. Authorities arrested a man previous year wanted in connection with laundering the missing Mt. Gox Bitcoins through the now defunct BTC-e exchange.

Since the fall of Mt. Gox, efforts to revive the cryptocurrency from the rambles have been staged by Brock Pierce, a crypto investor.

Not long after, Mt. Gox actually "found" 200,000 of the "lost" Bitcoins.

"When buying Mt. Gox I should have had people around me to advise me and help with the management starting with the Mt. Gox transfer contract". However, the former Mt. Gox CEO has been skeptical of such plans.

After the sentencing, the judge asked if Karpeles understood the sentence.

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But the court rejected prosecutors' claims of embezzlement, saying Karpeles's acquisition of a software developer business was reasonable and transfers of money to his personal account from that of Mt. Gox were loans he had meant to return.

"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", the court said.

The court also bashed Karpeles harming the "trust of his users" and stated: "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". Greene and Motto, both IL residents, relied on those representations when they created their Mt. Gox accounts in 2012 and early 2014, respectively.

Still, Mark Karpeles has to feel good about this verdict.

"Upon discovery the BTC were moved to a safer environment and lawyers worked on how to announce this to the court", Karpeles said.

Leading up to the conviction, Karpeles was held in a Japanese prison for 12 months where he says he was interrogated for 50 days in a row, with sessions lasting up to eight hours at a time.

Images courtesy of Shutterstock, Channel News Asia, and Fortune.

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