Mark Karpeles, the chief executive of the infamous bankrupt Japanese bitcoin exchange Mt Gox, pleaded not guilty in court to charges of embezzlement and data manipulation today, according to a report by Reuters.
The trial proceeded in the Tokyo District Court on July 11, where Karpeles was indicted for diverting $3m in customer funds to his own account in late 2013, and allegedly, fabricating his account balance inside the exchange platform. The 32-year-old defendant denied such allegations.
Kolin Burges, a software developer in London and a Mt Gox creditor also president at the trial, said in a Tweet that "Karpeles admits operating Willy bot...but says it was for good of company so not illegal."
As reported in 2014, the "Willy bot" was suspected of being the vehicle by which fraudulent trading activity was conducted on the exchange in 2013 during a rapid uptick in global prices.
The Japan-based bitcoin exchange first filed bankruptcy protection in February 2014, with an outstanding debt of ¥6.5bn ($63.6m), amidst a loss of 850,000 bitcoins, which according to Mt Gox's explanation was due to a software security flaw that was breached by hackers.
The case became prominent as many of the stolen bitcoins belonged to Mt Gox customers, a fact that did much to raise eyebrows regarding the security, safety and regulation issues around cryptocurrencies.
Still, it's worth noting the collapse has had a broadly positive impact on domestic markets, as in April this year, Japan became the first country in the world to regulate bitcoin as a legal payment method in response.
Mark Karpeles image via CoinDesk archieves
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.