Bitcoin Exchange MtGox Former CEO Mark Karpeles Arrested In Japan

Mark Karpeles, the former CEO of the collapsed bitcoin exchange MtGox, was arrested Saturday by Japanese police over his alleged connection with the loss of bitcoins worth hundreds of millions of dollars. Authorities said that the 30-year-old French-born is suspected of manipulating the company’s computer system to falsify its outstanding balance, Reuters reported.

Tokyo-based MtGox, which was once the world’s largest hub for trading the virtual currency, filed for bankruptcy in February 2014. The company said at the time that it had lost 750,000 customer bitcoins and another 100,000 that belonged to the exchange due to a computer bug.

The lost bitcoins were said to be worth $480 million at the time of the bankruptcy filing. Karpeles had blamed hackers for the loss, and later said that he had recovered 200,000 bitcoins, worth nearly $116 million, in an old digital wallet from 2011.

According to the Wall Street Journal, Japanese media aired footage of Karpeles being taken away by police officers from his apartment Saturday morning. A local official familiar with the investigation told the Journal that some of the bitcoins that Karpeles said were stolen may not have existed.

Japan’s Nikkei reported Friday that Karpeles was going to be arrested over the disappearance of the virtual currency. Following the report, Karpeles told the Journal that the allegations against him were “false” and he would “of course deny” them.

Karpeles, who moved to Japan in 2009, has not been formally charged. In Japan, authorities can detain a suspect for up to 23 days without a formal charge, the Journal reported.