Trial Begins in Japan for CEO of Failed Bitcoin Exchange Mt. Gox

The former chief executive officer of the failed Bitcoin exchange Mt. Gox pleaded not guilty to charges that he stole hundreds of millions of dollars’ worth of the virtual currency.

French-born Mark Karpeles appeared Tuesday in Tokyo District Court at the start of his trial on embezzlement and data manipulation charges.  Prosecutors have accused the 32-year-old of manipulating Mt. Gox’s data and moving millions of Bitcoins into his personal account before the exchange shut down in February 2014.

Mt. Gox filed for bankruptcy after losing about 850,000 bitcoins, then worth close to half a billion U.S. dollars.  The exchange blamed the loss on hackers who exploited a security flaw.  The company later claimed it found about 200,000 of the missing bitcoins in another location.

The collapse of Mt. Gox, which handled much of the world’s Bitcoin trading activity, angered investors and damaged the reputation of the alternative currency.  The scandal prompted Japanese lawmakers to enact laws regulating the use of bitcoins and other digital-based currencies.

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