Bitcoin CEO released on bail in embezzlement case

Bitcoin CEO released on bail in embezzlement case

Tokyo (AFP) – The head of collapsed Bitcoin exchange MtGox has been released on bail nearly a year after his arrest on embezzlement charges, according to one of his lawyers.

Television footage showed France-born Mark Karpeles, 31, leaving the Tokyo Detention House on Thursday after reportedly paying more than 10 million yen ($95,000) to secure his release.

It was the first time that Karpeles — noticeably thinner with long hair in a pony tail and wearing a baseball cap — has been out of custody since his arrest in August following the demise of the Tokyo-based Bitcoin exchange.

“He is very pleased,” lawyer Nobuyasu Ogata said of his client’s release.

Karpeles is facing allegations that he fraudulently manipulated data and pocketed millions of dollars worth of the virtual currency.

It was not clear when he would go to trial.

The French national — who cannot leave Japan as a condition of his bail — was arrested and re-arrested several times, extending an initial three-week incarceration allowed under local law.

MtGox shuttered in 2014 after admitting 850,000 coins — worth around $480 million at the time — had disappeared from its digital vaults.

The company initially said there was a bug in the software underpinning Bitcoins that allowed hackers to pilfer them.

Karpeles later claimed he had found some 200,000 of the lost coins in a “cold wallet” — a storage device, such as a memory stick, that is not connected to other computers.

MtGox, which once said it handled around 80 percent of global Bitcoin transactions, filed for bankruptcy protection soon after the cyber-money went missing, leaving a trail of angry investors calling for answers and denting the virtual currency’s reputation.

Bitcoins are generated by complex chains of interactions among a huge network of computers around the planet, and are not backed by any government or central bank, unlike traditional currencies.