Mt Gox CEO embezzled $2.6 million in customer funds and may face arrest again

Mark Karpeles, CEO of defunct bitcoin exchange Mt Gox, could face new embezzlement charges from Japanese police tomorrow, according to reports.

Previously, Caples was detained by Japanese police for three weeks on suspicion of manipulating the trading platform, which was the maximum length of time a person could be detained without formal charges.

The 30-year-old French national embezzled $2.6 million in client deposits to support his other personal projects, including a 3D software company, according to the Yomiuri Shimbun newspaper. If enforced, the Tokyo Metropolitan Police Department could detain him for an additional 23 days.

Mt Gox, once the world's largest Bitcoin trading platform, was responsible for 80% of Bitcoin trading volume at its peak. However, a shocking scandal broke out after its closure. It was reported that the company lost as many as 744,400 Bitcoins when it went bankrupt. Calculated at the market price at the time, these Bitcoins were worth US$340 million.

Since then, about 200,000 bitcoins have been found in a cold wallet controlled by Karpeles, but the question of insider involvement and how much customer funds have been lost remains a mystery.

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