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Mt Gox's Mark Karpeles arrested in Japan

Police move on boss of collapsed Bitcoin exchange

French-born Mark Karpeles, head of the failed Mt Gox Bitcoin exchange, has been arrested in Japan.

The arrest comes eight months after Japanese police said they were confident the incident that saw most of the Bitcoin held by Mt Gox evaporate was the result of fraudulent transactions.

Karpeles had previously claimed the lost Bitcoin – worth hundreds of millions of dollars – were stolen in cyber-attacks, which led to the collapse of Mt Gox.

This Agence France Presse report adds that Tokyo police have told local media they're investigating Karpeles “possible involvement” in the disappearance of Bitcoin worth around US$390 million in today's rates.

The Yomiuri newspaper says police believe Karpeles “repeatedly transferred clients' Bitcoins into his own account for speculative trading”.

Japan's Kyodo News reports Karpeles' lawyer's statement that he denies having done anything illegal, reports the BBC.

Karpeles' claim that Mt Gox's losses stemmed from Bitcoin's transaction malleability bug lay at the heart of the exchange's problems was later debunked by researchers.

Earlier this year, an analysis by Tokyo-based WizSec investigators suggested that the Mt Gox exchange had leaked Bitcoin for a number of years. ®

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