Mark Karpeles, 30, is charged with embezzling 321 million yen from clients of Mt. Gox

Head of failed bitcoin exchange Mt. Gox charged

The former head of defunct bitcoin exchange Mt. Gox has been charged with stealing £1.7m of clients' money by Japanese prosecutors.

The charges filed on Friday accuse French-born Mark Karpeles, 30, of embezzling 321 million yen (£1.73m) by transferring clients' funds deposited at Mt. Gox's bank account to other accounts, according to the Jiji newswire.

Karpeles was arrested last month in connection with the disappearance of hundreds of millions of dollars' worth of the virtual currency after MtGox – then one of the biggest online exchanges – suddenly shut down in February 2014.

The incident precipitated a rapid fall in the value of the so-called cryptocurrency, which enables anonymous transactions, seeing it crash from more than £700 to its current value of around £150.

Sources familiar with the matter told Jiji that the money appears to have been spent on buying computer software development rights and an expensive custom-built bed.

At the time of his arrest Japanese media reported Karpeles was suspected of falsifying data on the outstanding balance of the exchange, but sources involved in the investigation told newspaper Yomiuri that he has denied the charges, telling investigators the data falsification was done for the company and he had intended to pay back the money.

The prosecutors' office was not available for comment.

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