Mt. Gox: Tokyo Court acquits Mark Karpeles on embezzlement charges; finds him guilty of electronic data tampering

Mark Karpeles, owner and CEO of the now-defunct Bitcoin exchange, Mt. Gox, has been convicted of falsifying electronic data, but was acquitted of embezzlement charges by Tokyo District Court on 15 March.
The French businessman was found guilty on charges of record tampering, and was subsequently granted a suspended jail sentence for two and a half years. This means that Karpeles wouldn’t have to serve time in prison if he does not commit any crime for a period of four years. Additionally, the court also ordered Mark Karpeles to compensate for trial costs.
Yuji Nakamura, a Bloomberg tech reporter, summarized the Tokyo District Court’s verdict on Karpeles,
“In summary, the court found that the way he ran Mt. Gox was a total mess and that he tampered with records to hide the fact it was missing a lot of Bitcoin, but he did not do it for personal gain or have ill intent.”
According to his translations, the court stated that the use of tampered data involving a large sum of funds caused severe damage to the customers of Mt. Gox. However, there was no criminal evidence of the serious allegations Karpeles was charged with. He also stated that the defendant’s criminal responsibility cannot be undermined.
Tokyo prosecutors had previously accused Karpeles on multiple accounts of fraud, including embezzlement and aggravated breach of trust, demanding a 10-year prison term for him. Maintaining his innocence since the very beginning, the CEO of the infamous exchange said that he was happy to be found not guilty of the serious charges of embezzlement and breach of trust.
The Mt. Gox fiasco accounted for a loss of 850k BTC, out of which only 200k coins have been recovered. The breach resulted in a loss of over 7% of the entire Bitcoin circulation in early 2014. Later, the company filed for bankruptcy and ceased its operations.
The post Mt. Gox: Tokyo Court acquits Mark Karpeles on embezzlement charges; finds him guilty of electronic data tampering appeared first on AMBCrypto.
Source: AMB Crypto

6500000 Bitcoins Lost Forever, Mt. Gox Owner to Meet His Fate in Court on Friday March 15

The infamous Mt. Gox saga will finally meet an end in the Japanese Courts on 15th March 2019. The owner of the exchange, French Mark Kerpeles, 33, is accused of ‘faking digital data and embezzling millions of dollars ($3 million).’; If found guilty he will be heavily penalized and might serve a sentence of ten years. Here is a small recap of the entire episode:
2014 Mt. Gox Shutdown
In February 2014 Mt. Gox had stopped withdrawals and trading on its exchange reportedly due to maintenance issues. However, on 28th February 2014, it filed for bankruptcy claiming that the most significant exchange of the world at the time had been hacked of 850000 Bitcoins.
The Bitcoin market soon plummeted, and investors lost around $425 million worth of Bitcoins at the time. The case was brought to light at the Japanese Court, and Mark Karpeles, the owner of the exchange, was held accountable.
In March 2014, a public release on the website announced that they had recovered 200000 Bitcoin from the cold storage wallets of Mt. Gox Exchange. The funds were held in ‘trust’ by the Japanese Authorities for credit protection.
2015 Case Proceedings: 650000 Bitcoins Lost Forever?
After the revelation of the 200,000 Bitcoins, the investigation reached a dead-end due to lack of KYC and ALM compliances at the time.
Mark Karlepes was later arrested in Japan in August 2015. Kerpeles is alleged to have manipulated the exchange data for years during the running of the exchange embezzling almost $3 million. He served one year of imprisonment until July 2016 when before he was released on bail.
This is a very small amount with respect to the value of 6500000 Bitcoins still reported missing at the exchange. Nevertheless, if found guilty, he would be penalized heavily.
Satoshi Mihira, chief attorney at Mizuho Chuo law firm, said: “If it was an outside hacker who stole the currency, it’s a problem. But if he stole even part of the money, it would be embezzlement.”
How Much Did The Investors Actually Lose?
The proceedings against Mark Karpeles could add some funds to total credit amount, however, the illicit owner of 6500000 Bitcoins from Mt. Gox still looms at large.
Nevertheless, all is not lost for its investors. In June 2018, when the price of Bitcoin was $6200, the Tokyo District Court had initiated a credit reimbursement program known as civil rehabilitation. Funds to the tune of 170,000 each of Bitcoins and its hard fork Bitcoin Cash, worth roughly $1.2 billion were credited back its ex-customers and debtors. The amount is still almost three times the amount that was reportedly lost during the heist.

“Enormous assets…will be returned to creditors of Mt. Gox,” Shin Fukuoka, a leading attorney, and partner at Japan’s Nishimura & Asahi law firm, he also wrote in a statement. “This is the creditors’ victory.”

First creditors meeting since Civil Rehabilitation completed today for #MtGox – next one will be on March 20th 2019. Remember, deadline for filing Civil Rehabilitation claims is on October 22nd 2018, so if you have a claim against MtGox, remember to file on time!
— Mark Karpelès (@MagicalTux) September 26, 2018

Prosecutors’ Claims Against Kerpeles
The prosecutors against have filled for a 10-year sentence and reimbursements to creditors from his personal assets. According to the prosecutor, they have reports of extravagant spending and investments by Mark Karpeles which might indicate that the funds were ill-founded.
They have found considerable investment in a 3D-printing software business that had nothing to do with the exchange. Furthermore, a $54,000 worth canopy bed, thousands of dollars on overseas trips for his distanced wife,  and spent thousands of dollars on living a luxurious life (reportedly $120,000 annually).
Karpeles’ Defence
The owner of the disputed exchange has been active on social media ever since his release. Although he has been accused of fraud, and the investors and ‘Twitterati’ have bad mouthed Karpeles; He continues to maintain a non-guilty stand.
“Most people will not believe what I say. The only solution I have is to actually find the real culprits,” he told reporters after the hearing.”
 

When you lose an argument, what better way to score a win than to attack the person themselves rather than the argument. There’s a word for that thankfully: argumentum ad hominem. Look it up.https://t.co/jA1Zp4Atrh
— Mark Karpelès (@MagicalTux) February 10, 2019

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Source: CoinGape

Japan to Launch Blockchain Payment Experiment for Tokyo 2020 Olympics

Japan’s famously conservative financial system is set to receive the biggest shakeup in decades as one of the world’s largest financial institutions is building a blockchain-based consumer network designed to handle a million transactions per second in time for the Tokyo 2020 Olympics.
The MIT Technology Review reports that Mitsubishi UFJ Financial Group (MUFG), which is Japan’s largest bank by assets and the fifth biggest bank in the world is collaborating with American internet startup Akamai, to build and deploy what is set to be the world’s fastest payment network, far superior to Visa and Bitcoin, which are currently the largest fiat and crypto networks.
If the experiment succeeds in time for the Olympics, it would signal a new era of financial innovation in a country still dominated by cash transactions despite the world leading electronic transaction infrastructure that is obtainable in many of its Asian neighbors like South Korea and China. It would also become the first large-scale deployment of a blockchain payment solution in Japan following similar experimental efforts by Mizuho Financial Group and SBI Holdings.
Japan’s Cash Problem
Despite its reputation for world-leading technology innovation in so many areas, Japan’s financial system remains a stubborn holdout, in part due to a stubborn cultural preference for paying in cash for goods and services. Japanese citizens are the world’s most prolific users of physical cash, with the cost of running the country’s 200,000-strong ATM network along with cash registers and bullion vans estimated at $18 billion annually.
While the Japanese financial industry may be willing to endure the cost of this status quo in exchange for keeping its stranglehold on the famously patriotic Japanese consumer market, the siting of next year’s Olympic Games in Tokyo will make the situation untenable. With hundreds of thousands of international visitors expected in Tokyo alone.
As many of these visitors are from countries where electronic transactions are par for the course, it is estimated that Japan could miss out on hundreds of millions of dollars which the stolid Japanese economy could really use at this point.
Primed to Leapfrog?
MUFG may likely have its eyes on some key facts about cryptocurrency use in Japan that has convinced it that this is the way to go. First of all, while Japanese consumers might be notorious for their cash preference, cryptocurrency is also wildly popular in the country, and at one point the defunct bitcoin exchange Mt. Gox processed as much as 70 percent of the world’s bitcoin exchange transactions.
The Japanese Financial Standards Agency (FSA) is also one of the world’s most experienced authorities in the field of cryptocurrency regulation, and MUFG’s bet is that these factors make Japan uniquely positioned to leapfrog from cash to cryptocurrency, skipping two decades worth of legacy electronic transaction technology in the process.
The only existing reference for leapfrogging on such a grand scale is probably the GSM revolution in sub-Saharan Africa which saw the world’s last population to come online become one of the tech-savviest in the space of 15 years, by leapfrogging legacy telecoms technology and going straight into GSM and CDMA networking. A similar move in Japan would see it overnight become the world’s biggest staging point for cryptocurrency adoption and a possible starting point for similar national or supranational network deployments around the world.
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Source: CoinGape

Bitcoin Cash [BCH] hard fork was more of an upgrade than a fork, says Bitcoin.com’s Roger Ver

The Bitcoin Cash [BCH] hard fork has been creating waves in the cryptocurrency market with several proponents talking about the two new tokens: Bitcoin ABC which is now treated as Bitcoin Cash and Bitcoin SV.
During the Bitcoin Cash Meetup in Tokyo, Roger Ver, the Chief Executive Officer of Bitcoin.com, spoke about the network split as well as the effects of the hard fork on existing tokens. Ver started by saying that the BCH event was not really a fork but was an ‘upgrade’.
He stated that the BSV tokens are still present in the users’ Bitcoin.com wallet and admitted that he does not know how long it is going to exist. Ver said:
“ You needn’t worry because both the tokens are present in your Bitcoin.com wallet. I really don’t know how long SV is going to last, it may last for years to come or it may disappear after a couple of days.”
The Bitcoin.com official also informed users that Koinex, a popular cryptocurrency exchange, was crediting users with both BCH and BSV with the same addresses. A Kraken official, who was present at the meetup stated that the company is trying to work on the credits system.
Ver then talked about Craig Wright, the Chief Scientist at nCHain and one of the biggest proponents of Bitcoin SV. Roger said that the rumours spread around by Wright about people using ABC for illegal activities were false and completely unfounded. In his words:
“Craig may say a lot of things and then ask people to ban ABC. That’s like saying if I beat anyone with my shoes, then all shoes should be banned. We played out all the cards and the fork wasn’t even a close competition. Bitcoin Cash is still going strong while BSV is struggling to even get off the ground.”
To a question posed to Ver about the BSV camp attacking the ABC network, the CEO simply said that “they can try whatever they want but nothing is going to happen”. He also said that SV is filled with false promises and there is no product on their end that has the ABC team worried.
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Source: AMB Crypto