In March 2014, a month after filing for bankruptcy, the firm said it had found 200,000 lost bitcoins.
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At the time, the total amount of missing bitcoin was worth almost $500 million, although prices have dropped significantly since then. However, fraudulent system manipulation might not be the only reason to arrest the French entrepreneur, as the authorities are also looking to charge Karpeles with corporate embezzlement.
Today, local media, citing police, said investigators suspect Karpeles knew details about the missing Bitcoins which were reportedly transferred to an account controlled by him-without notifying depositors.
But Japanese news service NHK says police believe Karpeles “padded his Bitcoin outstanding balance by illegally manipulating [the Tokyo-based] company’s computer system”.
Unlike the US dollar, or any other traditional currency, bitcoins aren’t printed or backed by a central government.
The exchange later filed for liquidating its assets following its failure to restructure its business under the country’s bankruptcy protection scheme. He told the paper that he planned to deny them.
Interestingly, even when Mt. Gox fell, Karpeles maintained that the most likely reason for the collapse of the exchange was a series of external cyber attacks that led to the disappearance of the digital coins.
Karpeles IM’d Mochizuki stating the current allegations were “false”.
Regulators have scrambled to respond to the use of Bitcoins, with the European Banking Authority last year calling on the region’s banks not to deal in virtual currencies until rules are developed to stop them being abused.
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The Bitcoin virtual currency was first introduced in 2009. His lawyer was not avaiulable for comment, the WSJ said.
