Former CEO of collapsed Mt.Gox bitcoin exchange arrested in Japan

It’s been months since Tokyo police revealed their belief that the Mt. Gox bitcoin heist was an inside job, and tonight they arrested its former CEO, Mark Karpeles.

The Metropolitan Police Department suspects Karpeles, a Frenchman, made unauthorised access to the computer system of the exchange to falsify data on its outstanding balance, investigative sources said. Karpeles could be in serious trouble if his legal defense does not hold up.

The Tokyo-based digital currency exchange was once the biggest and most important trading platform in the Bitcoin ecosystem, holding a 70% market share within the cryptocurrency market.

The newspaper said Japanese media broadcast footage of Karpeles being led by police officers from his Tokyo apartment before 7 a.m. Saturday local time.

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.

No police statement could be obtained immediately on Saturday morning in Tokyo. Some of the Bitcoins Karpeles claimed were lost may not have existed, the official said.

However, a new report released by the Japanese group WizSec in April 2015 showed that Mt. Gox actually started leaking BTC in 2011 and was “practically depleted of Bitcoins by 2013”.

Known as a self-proclaimed geek who said he was uncomfortable in his native France and hadn’t been back in years, Karpeles became interested in bitcoin when a customer of his web-hosting services wanted to pay in the virtual currency. He wore a blue T-shirt with the logo “Effortless French”. Mt. Gox additionally stated greater than $27 million was lacking from its Japanese financial institution accounts.