Prosecutors Seek 10-Year Jail Term Over Money Laundering in Bitcoins and Link to Silk Road

A Former CEO has run into deep trouble with the Japanese legal system. Tokyo based prosecutors are seeking to have the former CEO sentenced to over ten years in prison for the embezzlement of company’s funds, money laundering in bitcoins, and his link to the infamous dark web marketplace called the Silk Road.

Mark Karpeles, the former CEO at Mt. Gox, is facing charges for abuse of power, embezzlement of the company’s funds and money laundering in virtual currencies during his term in office.

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According to the report by a local Tokyo-based news outlet, Mark Karpeless embezzled over $3 million (340 million yen) in digital currencies – money that belonged to the company. He is said to have transferred the loot into his several e-wallet personal accounts to minimize the chance of being tracked by the law enforcement authorities. The indictment further accuses him of manipulating regulations to allow him to reduce consultation among stakeholders in decision making as well as manipulation of the company’s data trading systems to loot and mask his illegal doings.

Since Mt. Gox is based in Tokyo, Japan, on March 2015, the Japanese legal system declared the company as bankrupt following an application by the prosecution before the proceeding to prosecute Mark Karpeles. By the time the company was shut down, it had lost more than 48 billion yen in bitcoins and more than 2.8 billion in fiat currencies. Since the beginning of his prosecution, Mark Kerpeles has held his ground claiming that the loss was due to a hack.

The name, Mark Karpeles, is a well-known, notorious name in the world of cryptocurrencies. He is a long-term crypto player, who was involved in the most infamous crypto business connected to the first major bitcoin price surge. In 2013, Mt. Gox was involved in the biggest functional cryptocurrencies exchange globally.

Apparently, the indictment also alleges involvement of Mark Karpeles in the bankrolling of the infamous and notorious online dark web marketplaces called the Silk Road. Since its shutdown by the Federal Bureau of Investigation (FBI), more and more dark web online vendors, admins, and moderators have continually been convicted and others are being arrested as the illegal online trade saga continues to unfold. However, the investigation has pointed out that Mark Karpeles has been able to cover his involvement with the dark web marketplace for a long time. He is believed to fund and facilitate illicit drug and weapons trafficking on the illegal platform.

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The French-born Mark Karpeles seems to run into many legal problems. “The defendant is a well-known, notorious businessman in the world of virtual currencies, and it’s not surprising that he has a bad reputation looking at his recent conduct,” said the Tokyo prosecutors. “He single handedly manipulated almost all the company’s trading systems to divert finances into such uses as the business in software development investment for his interest. We can’t also forget that he distorted the bitcoin market, lowering the confidence of most bitcoin users,” they alleged.

In response, during the first healing in July 2017, Mark Karpeles entered an innocent plea to the charges, saying “I swear to the heavens, I am not guilty.” He is expected to appear in court in the near future for his next set of trials with unclear prospects for him.