Former Mt. Gox founder and Chief Executive Officer Mark Karpeles is now a free man after a court in Japan dismissed all charges against him except a minor one related to record-keeping.

Mt. Gox was a bitcoin exchange that shut down in 2014 after hackers allegedly stole all the funds in the exchange, worth around $450 million at the time. Where the money went remains a mystery five years later.

Karpeles was never accused of being involved in the main theft of funds from Mt. Gox, but an investigation into the theft uncovered all sorts of alleged unbecoming behavior. Karpeles was arrested twice in 2015, the first time on a charge of fraudulently producing and using private electromagnetic records. It was based on evidence that indicated Karpeles manipulated the cryptocurrency system and inflated the bitcoin balance in bogus accounts that belonged to Mt. Gox.

The second arrest was related to an embezzlement charge. Police alleged that he misappropriated $2.6 million of deposits from the trading accounts of Mt Gox customers. After that arrest, it was revealed that at least some of this money had been spent on “an unspecified sum on prostitutes” that involved “several women whom he met at venues that offer sexual services.”

A court in Tokyo found Karpeles not guilty on charges of embezzlement and abusing his position in the company for personal gain. The court did, however, find Karpeles guilty on a charge of producing illegal records related to his mixing personal expenses with company expenses.

Given time already served — 12 months from July 2015 through obtaining bail in July 2016 — the court gave Karpeles a suspended sentence of two and a half years with a good-behavior bond of four years. Should Karpeles misbehave in any fashion during the four-year period, he will be forced to serve the two and a half years in jail.

Although this is the final act for Karpeles and the Japanese legal system, it provides no justice to those who lost millions when Mt. Gox collapsed.

To put the size of the theft in perspective, 850,000 bitcoins were stolen, though 200,000 were “found” later, for a total of 650,000 bitcoins lost. Valued at about $450 million at the time they were stolen, today they are worth $2.6 billion and at the peak of the bitcoin boom would have been worth $13 billion.

Photo: Mark Karpeles