Now-Defunct Bitcoin Exchange MtGox CEO Heads to Trial !
Mark Karpeles, the former CEO of the now-defunct bitcoin exchange Mt. Gox, is set to face a trial next week in Tokyo for several charges including embezzlement and data manipulation.
In 2013, four years back,prior to the establishment of proper regulation and the emergence of major bitcoin trading platforms such as Coinbase’s GDAX, Bitfinex, Kraken, China’s BTCC, OKCoin and Bithumb, Mt. Gox was the most dominant bitcoin exchange in the market, processing the vast majority of bitcoin trades.
Mt. Gox was primarily based and headquartered in Japan but it processed fiat-to-bitcoin trades from both regional and international users, serving millions of consumers in the US, Europe and Asia.
By late 2013, Mt. Gox was processing 80 percent of global bitcoin trading, which is unthinkable in consideration of the current standards of the bitcoin exchange market. The global bitcoin exchange market is well distributed across the world, with the US, the largest bitcoin exchange market, only holding around 33 percent of the market share.
At the time, Mt. Gox suffered from a major hacking attack and security breach, leading to the loss of around 850,000 bitcoin. Around four years ago, the stolen funds totaled to $480 million but at the current bitcoin price, the total amount of bitcoin lost during the 2013 Mt. Gox hack amounts to $2.21 billion, or 5 percent of bitcoin’s market cap.
Still, some investors including Kolin Burges, a British investor who held several hundred bitcoin on the Mt. Gox trading platform, are hopeful that the bankruptcy distribution would grant creditors a small percentage of their funds back.
"The charges (against Karpeles) only cover a subset of the issues which were happening at MtGox, so I don't expect that we will find out most of the information we want to know. I've not had any back yet but hopefully, eventually all the creditors will get a small percentage of their money back from the bankruptcy distribution," Burges said in an interview with AFP.
Although the Mt. Gox hacking attack and the loss of $2.21 billion in funds was a disastrous event for investors and traders, it triggered the Japanese government to regulate the bitcoin exchange market as well as legalize the digital currency for proper adoption and trading.
Hence, the involvement of law enforcement agencies and the Japanese government in the investigation into the former bitcoin exchange Mt. Gox led to strict regulation over the Japanese bitcoin markets and industries.
Today, Japanese bitcoin exchanges are properly licensed and bitcoin trading in the region in tax-free. Such positive and practical regulation on the bitcoin market led to nationwide adoption, with some of the largest and most influential companies in Japan integrating bitcoin as a legitimate payment method.
Author : Joseph Young