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Ex-MtGox chief apologises for firm's losses, but denies all charges

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Mark Karpeles, former CEO of collapsed bitcoin exchange MtGox, is accused of embezzlement and fraudulently manipulating data related to the firm.

Tokyo

THE former head of collapsed bitcoin exchange MtGox apologised on Thursday for losses that bankrupted the firm but insisted he was innocent of charges including embezzlement at closing arguments in his Tokyo trial, local media reported.

France-born Mark Karpeles, 33, faces charges that he pocketed about 340 million yen (S$4.2 million) and fraudulently manipulated data related to MtGox.

His trial began in July 2017 and the Tokyo District Court is scheduled to announce a verdict on March 15, 2019. He denies all charges.

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MtGox - once the world's biggest bitcoin exchange - collapsed in 2014 after cryptocurrency worth half a billion dollars disappeared from its virtual vaults, a mystery that remains unsolved.

In early December, Tokyo prosecutors demanded a 10-year jail term for Karpeles, claiming his alleged acts "were extremely vicious, as they completely undermined confidence in trading."

Karpeles on Thursday apologised for failing to prevent the disappearance of the coins but insisted he was not guilty of the charges he is facing, public broadcaster NHK said.

Those charges are not directly related to how MtGox lost 850,000 bitcoin - worth around US$480 million at the time. MtGox was shuttered in 2014 after admitting the massive disappearance of the coins.

The company initially said there was a bug in the software underpinning bitcoins that allowed hackers to steal them. Karpeles later claimed he had found some 200,000 of the lost coins in a "cold wallet" - a storage device that was not connected to other computers.

The French national - who cannot leave Japan as a condition of his bail - was originally arrested in August 2015.

MtGox, which once said it handled around 80 per cent of global bitcoin transactions, filed for bankruptcy protection soon after the cyber-money went missing, leaving a trail of angry investors calling for answers and denting the virtual currency's reputation. AFP