During his arrest, the CEO, tilting his baseball cap forward, did not reply to reporters’ questions as he got into a police auto. Police now suspect Karpeles knows what happened to the approximately 650,000 Bitcoins and also manipulated the MtGox computer system.
Karpeles has not responded to an e-mail seeking comment. On Friday, following a local media report that he was going to be arrested, Karpeles said in instant messages to the newspaper that the allegations were “false” and he would “of course deny” them.
Karpelès has not been formally charged, and he can be detained for up to 23 days without a formal charge or the possibility of bail, as per Japanese rules. Mt. Gox ruled the market for a long period until it collapsed in 2014 amidst rumours of foul play. Furious customers flew to Mt. Gox’s headquarters in Tokyo for a sit-in, noted the Wall Street Journal.
Mt. Gox, based in Tokyo and once the world’s biggest bitcoin exchange, collapsed in February last year after announcing the loss of about 850,000 bitcoins, worth around 48 billion yen (HK$3 billion) at the time, from customers’ accounts and its own reserves.
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″. Mt. Gox additionally stated greater than $27 million was lacking from its Japanese financial institution accounts. Based on information from sources close to the exchange, the police have specified Karpeles was the only one able to manipulate the data.
When it went bankrupt, Mt. Gox had some 127,000 creditors.