Police arrested Mt Gox CEO Mark Karpeles today in Japan on allegations that he manipulated volume on the then-market leading bitcoin exchange platform prior to its 2014 collapse.
A report by The Wall Street Journal indicated Karpeles denied he was facing imminent arrest as early as Friday, calling accusations "false" and suggesting that he would deny formal charges.
The news source stated that Karpeles has not yet been charged with any crimes, meaning he could be detained for up to 23 days before a formal charge without the possibility of bail. Other media outlets are reporting that the arrest took place at 6am local time.
The exchange is currently undergoing a process of liquidation. Claims management is being conducted with the assistance of Payward Inc, the parent company of bitcoin exchange Kraken, which serves markets in Europe and Japan.
At the time of its insolvency, Mt Gox was alleged to have lost as much as 744,4000 BTC or $350m in customer funds.
Though part of this amount has been recovered, independent reports produced in conjunction with the policy investigation in Japan suggest the exchange had in fact lost much of its funds prior to its collapse.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.