Ex-boss of MtGox bitcoin exchange arrested in Japan over lost $390m

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Mark Karpeles, the former head of defunct bitcoinexchange MtGox, has been arrested in Japan, and is reportedly to be questioned over the 2014 disappearance of nearly $390m (£250m) worth of the virtual currency.

A spokesman for the Tokyo police said French-born Karpeles, 30, was suspected of accessing the exchange’s computer system in February 2013 and inflating his cash account by $1m.

But local media reported that police are also investigating his possible involvement in the vanishing of hundreds of millions of dollars of the virtual currency when the exchange collapsed in 2014. It was not immediately clear if Karpeles was set to be charged with any offences.

After the Japanese news website nikkei.comreported that he was going to be arrested, Karpeles told the Wall Street Journal that the allegations were false and he would “of course deny” them. Kyodo News service quoted Karpeles’s lawyer as saying his client denied any wrongdoing.

If found guilty, Karpeles could face up to five years in prison, or a fine of up to 500,000 yen (£2,650).

When it filed for bankruptcy in February 2014, MtGox said 750,000 customer bitcoins and another 100,000 belonging to the exchange were stolen due to a software security flaw.

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