CEO of MtGox Bitcoin exchange arrested in Japan

Mark Karpeles, CEO of Bitcoin exchange Mt.Gox, has been arrested in Japan, the media have reported on Monday.

The arrest is being linked to the millions of missing bitcoins that dissapeared together with Mt.Gox last year. According to The Inquirer, he has been threatened with a $5,000 fine (£3200).

According to a report by the BBC, he is suspected of having accessed the exchange's computer system to falsify data on its outstanding balance. MtGox claimed it was caused by a bug but it later filed for bankruptcy.

Mt Gox filed for bankruptcy in Japan in February 2014, and its CEO Karpeles said the exchange was hacked.

"We found that approximately 750,000 bitcoins deposited by users, and approximately 100,000 bitcoins belonging to us, had disappeared," he said.

A week later Mt Gox filed for bankruptcy protection in the US, and lawyer Steven Woodrow said the case involves a “massive fraud” and that Karpeles’ operations need oversight.

Roughly two weeks later Mt Gox found some 200,000 bitcoins, worth around $100m (£64m), that it had left in an old wallet and forgotten about.

"Mt Gox Co Ltd had certain old-format wallets which were used in the past and which, Mt Gox thought, no longer held any bitcoins," said the firm.

His lawyer denied his client's role in the case and the allegations made against him. A report on the Nikkei website said that if he is charged and submitted to the full weight of the law Karpeles would face five years in prison or a fine of $5,000.