Bitcoin exchange Mt. Gox has been out of operations for quite some time, with its CEO recently admitting to tweaking the accounts to test the computer system. Mark Kapeles is currently under arrest in Tokyo for suspicions of manipulating with the cryptocurrency accounts.
After several investigations, authorities determined that a series of fraudulent activity led to the collapse of the bitcoin exchange and the loss of funds. Interestingly enough, this shutdown was seen as one of the major factors that drove bitcoin prices all the way down in 2014.
Bitcoin Exchange Fraud
Karpeles continues to deny all allegations against him, maintaining that the bitcoin exchange suffered a hacking incident. However, sources say that accounts were tweaked by several thousands of yen to create about $1 million in bitcoin.
In addition, Karpeles is also facing investigation on his alleged misuse of 1.1 billion yen in customer deposits. According to him, he was manipulating some data in order to test-trade the currency with a customer, but police suspect that he has transferred these funds to his own personal accounts.
Karpeles lawyers were not available for comment while police are still working