Bitcoin CEO spent embezzled funds on prostitutes: reports

The head of collapsed Bitcoin exchange MtGox was facing fresh embezzlement charges Wednesday, as Japanese media said some of the allegedly stolen funds were spent on prostitutes.

Tokyo police said they had arrested France-born Mark Karpeles, 30, for moving 20 million yen ($166,000) in client money to his bank account, as he faces fraud allegations over the disappearance of hundreds-of-millions-of-dollars-worth of the virtual currency.

Japan’s top-selling Yomiuri newspaper reported that the defunct firm’s chief had spent an unspecified sum on prostitutes, while the Jiji Press news agency, citing police, said it involved “several women whom he met at venues that offer sexual services”.

Karpeles was first arrested in August over claims he fraudulently tinkered with data and transferred funds to other firms controlled by him dozens of times between 2011 and 2013.

He was later re-arrested for allegedly pocketing about 321 million yen worth of Bitcoin deposits, extending an initial three-week incarceration allowed under Japanese law. It (Other OTC: ITGL – news) was not immediately clear if the latest charges involved money cited in the earlier allegations.

Karpeles’ new arrest mean authorities can detain him for another several weeks, giving them further time to grill him over MtGox’s demise.

The Tokyo-based exchange shuttered last year after

Read more ... source: TheBitcoinNews