Former CEO of failed Bitcoin exchange MtGox to go on trial

TOKYO: The former CEO of collapsed Bitcoin exchange MtGox heads to trial in Tokyo this week on charges stemming from the disappearance of hundreds of millions of dollars worth of the virtual currency from its digital vaults.

Frenchman Mark Karpeles – once the high-flying head of the world’s busiest Bitcoin trading platform – is facing embezzlement and data manipulation charges.

“He is keeping calm as the trial gets underway,” his lawyer Kiichi Iino told AFP, adding that Karpeles plans to plead his innocence.

The 32-year-old was first arrested in August 2015 and released on bail nearly a year later over allegations he fraudulently manipulated data and pocketed millions worth of Bitcoins.

MtGox, which claimed it once hosted around 80% of global Bitcoin trading, shuttered in 2014 after admitting that 850,000 coins – worth around US$480 million at the time – had disappeared from its vaults.

The company initially said there was a bug in the software underpinning Bitcoins that allowed hackers to pilfer them.

Karpeles later claimed he had found some 200,000 of the lost coins in a “cold wallet” – a storage device, such as a memory stick, that is not connected to other computers.

Tokyo-based MtGox filed for bankruptcy protection soon after the cyber-money went missing, leaving a trail of angry investors calling for answers and denting the virtual currency’s reputation.