TOKYO (Sputnik) – Former CEO of the Mt.Gox bitcoin virtual currency exchange Mark Karperles is facing fraud charges in Japan, the London-based Inside Bitcoins organization reports.
Inside Bitcoins said on Friday citing Japanese media sources that Karperles, a 30-year-old French citizen, is accused of "fraudulently manipulating the [MtGox] system and inflating the bitcoin balance of fake accounts."
According to the organization, if additional charges are put forward against Karpeles the Mt.Gox bankruptcy proceedings could be sped up significantly and former customers of the failed bitcoin exchange could recover their lost funds if there is enough proof of the virtual currency system having been manipulated.
Japanese TV reports showed footage early on Saturday which appeared to capture the arrest of former Mt.Gox CEO Karperles.
Tokyo-based Mt. Gox, which became the world’s largest bitcoin exchange in 2013, declared bankruptcy in February 2014, saying that it had lost nearly $473 million worth of their customer's bitcoins likely due to theft. This was equivalent to approximately 750,000 bitcoins, or about 7% of all the bitcoins in existence. Due to this crisis, the price of a bitcoin fell from a high of about $1,160 in December to under $400 in February.
The Bitcoin virtual currency was first introduced in 2009. Unlike the US dollar, or any other traditional currency, bitcoins aren't printed or backed by a central government. They are created by individuals and businesses using high-powered computers. Creators of bitcoins are allowed to keep some of what they create as payment for the service. The rest is sold on unregulated online exchanges.