1. Skip to content
  2. Skip to main menu
  3. Skip to more DW sites
Live TV
Latest audioLatest videos
In focus
Israel-Hamas warUkraineExtreme weather

Reports: Japan arrests bitcoin mogul

August 1, 2015

Police have arrested the head of the defunct bitcoin exchange Mt. Gox, according to local media reports. The arrest is reportedly linked to the loss of more than $400 million in bitcoin when Mt. Gox filed for bankruptcy.

https://p.dw.com/p/1G8Fw
US-Regierung versteigert Bitcoins in Millionenhöhe
Image: picture-alliance/dpa

Japanese police on Saturday arrested 30-year-old French citizen Mark Karpeles, the former CEO of the defunct bitcoin exchange Mt. Gox, according to local media reports.

Karpeles' arrest was reportedly linked to the disappearance of around 750,000 bitcoins of the exchange's clients and 100,000 owned by Mt. Gox.

The lost funds in the virtual currency were equivalent to $480 million (436 million euros) at the time of the exchange's bankruptcy filing.

Mt. Gox filed for bankruptcy in February 2014 after reporting that the bitcoins in question had been targeted in a bug in the software underpinning the virtual currency, allegedly allowing hackers the ability to pilfer digital wallets.

Mark Karpeles PK Gericht Tokio 28.02.2014
Karpeles stopped plans to rebuild Mt. Gox under bankruptcy protectionImage: Reuters

Karpeles later said he was able to retrieve around 200,000 bitcoins he discovered in a "cold wallet," a storage device not connected to the virtual currency's network.

Bitcoin is produced through a series of complex chains of processes that safeguard the decentralized network of the virtual currency and process transactions, also known as "mining."

Before it collapsed, Mt. Gox was considered the Internet's largest hub for trading bitcoin.

Bitcoin entered the digital marketplace in 2009, selling for $0.05 per unit and peaked in November 2013 at $1,135.

Following its peak, the European Banking Authority (EBA) warned consumers of the digital currency, saying "no specific regulatory protections are in place in the EU that would shield consumers from financial losses," if a platform were to fail or go out of business.

ls/cmk (Reuters, AFP)