Mark Karpeles, former CEO of the long-defunct bitcoin exchange Mt. Gox, has been found guilty and given a suspended sentence of two years and six months.
According to a report from The Wall Street Journal on Friday, the Tokyo District Court found Karpeles guilty of wrongfully making electronic records connecting to Mt. Gox’s books, but innocent on charges of embezzlement and breach of trust.
However, Karpeles will be suspended for four years, meaning he won’t do time in jail if staying on good records in the next four years.
The court’s verdict comes almost five years after Mt. Gox filed for liquidation in April 2014 after claiming to have been hacked for 850,000 bitcoin, some of which was later found.
According to the WSJ report, Karpeles’ lawyers wrote in their final argument to the court:
“Mt. Gox did not collapse because of the defendant’s [Karpeles’] wrongdoing. On the contrary, the defendant was trying his hardest every day to prevent its collapse.”
In December, Japanese prosecutors were seeking a 10-year sentence for Karpeles for embezzlement, alleging he used about $3 million of customers’ funds for his own personal use.
Karpeles, on the other hand, reiterated his innocence and apologized several times over the years. He once said, “I never imagined things would end this way and I am forever sorry for everything that’s taken place and all the effect it had on everyone involved.”
In August last year, the Japanese bankruptcy court that initially oversaw the case sided with creditors who made a petition to move the case to civic rehabilitation. As such, creditors could file for receiving their bitcoin locked up at Mt.Gox in their original form rather than having them converted to fiat currencies.
In January, Mt.Gox’ trustee Nobuaki Kobayashi announced the deadline for creditors to file proof of their claims was extended to March 15, after which the trustee will submit the rehabilitation plan to the court.
Mark Karpeles image via CoinDesk archives