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Tokyo cops: Mt. Gox CEO used embezzled funds on prostitutes

Mark Karpeles
Mark Karpeles

TOKYO (TR) – In applying additional embezzlement charges to the head of the bankrupt Mt. Gox exchange, Tokyo Metropolitan Police on Wednesday revealed that a portion of the funds were used on prostitutes, reports Nippon News Network (Oct. 28).

Beginning in September of 2013, Mark Karpeles, the 30-year-old chief executive officer of the Tokyo-based firm, which traded the bitcoin virtual currency, is alleged to have transferred 20 million yen of customer funds to his own bank accounts.

According to police, a portion of the embezzled funds were used for living expenses and provided to women he met at fuzoku (or commercial sex) businesses.

Karpeles, a native of France, denies the charges, telling police that the funds were not used for private purposes, according to TV Asahi (Oct. 28).

On August 1, Tokyo police first arrested Karpeles for fraudulently transferring funds to companies he controlled between 2011 and 2013.

The following month, he was arrested again for embezzling more than 320 million yen worth of bitcoin deposits.

In February of last year, Mt. Gox shut down after losing 850,000 bitcoin, valued at 48 billion yen at the time.