Mt Gox CEO May Face Rearrest Over $2.6 Million Customer Fund Theft

The CEO of bankrupt bitcoin exchange Mt Gox may face fresh embezzlement charges from Japanese police tomorrow, reports claim.

Mark Karpeles has been in custody for three weeks, the maximum time suspects can be detained without formal charges, following claims he manipulated volumes on the once-leading exchange prior to its collapse last February.

New allegations, reported by the Yomiuri newspaper, claim the 30-year-old embezzled ¥321m ($2.6m) of customer deposits to support other personal projects, including a 3D software company. If enforced, these will ‘reset the clock’ on how long the Tokyo Metropolitan Police can hold Karpeles, giving him up to another 23 days in custody.

Mt Gox was once responsible for 80% of bitcoin trading volume, however it has been rocked by scandal following its closure. At the time of the company’s insolvency, as much as 744,400 BTC (then worth $340m) was reported missing.

Some 200,000 BTC was later discovered in a cold wallet under Karpeles’ control, however questions remain about insider involvement and just how long customer funds had been missing.

For the full history of the failed exchange, check out our timeline.

Tokyo image via Shutterstock