Tokyo bit­coin ex­change boss pleads not guilty to em­bez­zle­ment charges

The Star Early Edition - - INTERNATIONAL - Thomas Wil­son

DE­FUNCT Mt Gox chief ex­ec­u­tive Mark Karpe­les yes­ter­day pleaded not guilty to charges re­lat­ing to the loss of hun­dreds of mil­lions of dol­lars worth of bit­coins and cash from what was once the world’s big­gest bit­coin ex­change.

The 32-year old French na­tional filed the plea in re­sponse to charges of em­bez­zle­ment and data ma­nip­u­la­tion at the Tokyo Dis­trict Court, ac­cord­ing to a pool re­port for for­eign jour­nal­ists.

Mt Gox once han­dled 80 per­cent of the world’s bit­coin trades, but filed for bank­ruptcy in 2014 af­ter los­ing some 850 000 bit­coins – then worth around half a bil­lion US dol­lars – and $28 mil­lion (R375.3m) in cash from its bank ac­counts.

In its bank­ruptcy fil­ing, Tokyo-based Mt Gox blamed hack­ers for the lost bit­coins, point­ing to a soft­ware se­cu­rity flaw.

Mt Gox sub­se­quently said it had found 200 000 of the miss­ing bit­coins.

In­dicted

Karpe­les was in­dicted for trans­fer­ring ¥341m yen (R40.04m) from a Mt Gox ac­count hold­ing cus­tomer funds to an ac­count in his name dur­ing Septem­ber to De­cem­ber 2013. The pros­e­cu­tion also al­leged Karpe­les boosted the bal­ance of an ac­count in his name in Mt Gox’s trad­ing sys­tem.

In its open­ing state­ment to the court, Karpe­les’ defence team did not dis­pute that the trans­fers took place, but de­nied they amounted to em­bez­zle­ment.

Karpe­les told the court he was an in­for­ma­tion tech­nol­ogy en­gi­neer.

“I swear to God that I am in­no­cent,” he said in Ja­panese to the three-judge panel hear­ing his case, ac­cord­ing to the pool re­port.

The col­lapse of Mt Gox badly dam­aged the image of vir­tual cur­ren­cies, par­tic­u­larly among risk-averse Ja­panese in­vestors and cor­po­ra­tions.

But the bank­ruptcy also prompted Ja­pan’s govern­ment to de­cide how to treat bit­coin, and pre­ceded a push by lo­cal reg­u­la­tors to li­cence vir­tual cur­rency ex­changes.

Ja­pan this year be­came the first coun­try to reg­u­late ex­changes at the na­tional level, part of a govern­ment ef­fort to ex­ploit fi­nan­cial tech­nol­ogy as a means of stim­u­lat­ing the econ­omy.

Recog­ni­tion

In­ter­est in bit­coin among Ja­pan’s le­gions of in­di­vid­ual in­vestors – en­cour­aged by Tokyo’s recog­ni­tion of the vir­tual cur­rency as le­gal ten­der – has spiked in re­cent months.

Still, in­sti­tu­tional in­vestors re­main wary, say those run­ning vir­tual cur­rency ex­changes in Tokyo.

Ja­panese firms are also un­en­thu­si­as­tic: Only 4 per­cent of large and mid-sized firms plan to use bit­coin in the near to medium term, showed a poll last month.

The value of bit­coin is highly volatile. It hit a record high of $2 980 last month.

Like other vir­tual cur­ren­cies, such as Ethereum and Rip­ple, bit­coin has no cen­tral author­ity and re­lies in­stead on thou­sands of com­put­ers across the world that val­i­date trans­ac­tions and add new units to the sys­tem-tech­nol­ogy known as blockchain.

Bit­coin can be traded on ex­changes in the same man­ner as stocks and bonds. It has also be­come a mode of pay­ment for some re­tail­ers, and a way to trans­fer funds with­out the need for a third party. – Reuters

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.