Japanese police have arrested Mark Karpeles, head of the collapsed
MtGox Bitcoin exchange, over the disappearance of about $390m worth of
the virtual currency.
The global virtual currency community was shaken by the closure of
MtGox, which froze withdrawals in February 2014 because of what the firm
said was a bug in the software underpinning Bitcoin that allowed
hackers to pilfer them.
Karpeles is suspected of having accessed the exchange's computer
system to falsify data on its outstanding balance, Kyodo News and public
broadcaster NHK said on Saturday.
Police did not immediately confirm Karpeles' arrest but local television footage showed authorities taking him into custody.
MtGox, which once boasted of handling about 80 percent of global
Bitcoin transactions, filed for bankruptcy protection soon after the
cyber-money went missing, admitting it had lost 850,000 coins worth
$387m.
Karpeles later said he had found about 200,000 of the lost Bitcoins
in a "cold wallet" - a storage device such as a memory stick that is not
connected to other computers.
Answers demanded
Bitcoins are generated by complex chains of interactions among a huge
network of computers around the planet and are not backed by any
government or central bank.
A cloud has been hanging over the Tokyo-based exchange and Karpeles
as investors have demanded answers, and called on the firm to publicise
its data so that hackers around the world can help analyse what happened
at MtGox.
"They say it's under investigation. That's all they say," a French
investor told the AFP news agency last year at a creditors' meeting in
Tokyo.
"They seem to refuse to make public more precise information about
MtGox's own [information] and how and when it was stolen, if it was
really stolen."
Karpeles had reportedly refused to travel to the US, where he was
being asked to appear for questioning in connection with MtGox's
collapse.
Regulators have scrambled to respond to the use of Bitcoins, with the
European Banking Authority last year calling on the region's banks not
to deal in virtual currencies until rules are developed to stop them
being abused.
Launched in 2009 by a mysterious computer guru, Bitcoin offers a
largely anonymous payment system and can be stored either virtually or
on a user's hard drive.
Backers say virtual currencies allow for an efficient and anonymous way to store and transfer funds online.
But regulators argue the lack of legal framework governing the
currency, the opaque way it is traded and its volatility make it
dangerous.
After MtGox, Bitcoin's reputation was also damaged when US
authorities seized funds as part of an investigation into the online
criminal enterprise Silk Road that made millions of dollars from drug
sales and other criminal enterprises.
During the trial of the man accused of masterminding the network, a
witness said investigators once suspected Karpeles of running the online
black market - a claim he denied.
Source: +AFP news agency
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