Mon | Aug 21, 2017

Head of failed bitcoin exchange arrested

Published:Sunday | August 2, 2015 | 8:00 AM

TOKYO (AP):

The head of the failed Japan-based bitcoin exchange, Mt Gox, was arrested in Tokyo yesterday on suspicion of inflating his cash account by US$1 million, authorities said.

Mark Karpeles, 30, is suspected of accessing the exchange's computer system in February 2013 and inflating his account.

If found guilty, the France-born Karpeles could face up to five years in prison or a fine of up to 500,000 yen (US$4,000).

Karpeles' lawyer said his client denies any wrongdoing.

Mt. Gox went offline early last year. Karpeles said then that tens of thousands of bitcoins worth several hundred million dollars were unaccounted for, and suggested they were stolen by hacking.

The relationship between the lost bitcoins and the inflated account was not immediately clear.

The Mt. Gox debacle served to highlight the perils of bitcoin transactions. Bitcoins are not regulated by central banks or other financial authorities. Bitcoin proponents have

long said Mt Gox is just an exception.