according toaccording toKyodo News

According to news on December 12, Japanese prosecutors demanded a 10-year sentence for Mark Karpelès, the former CEO of Mentougou Exchange (Mt.Gox). Mark Karpelès has asserted his innocence.

It is still unknown whether Mark Karpelès will be sentenced to 10 years in prison as the prosecution said, but this incident has brought the Mentougou Exchange, which has gradually been forgotten, back into the public eye. Filing for bankruptcy, and now the former CEO may also face a long prison sentence, which is embarrassing.

The Mentougou website was originally an online trading platform for the card game "Magic: The Gathering Online eXchange". Its name comes from the acronym (Mt.Gox) of (Magic: The Gathering Online eXchange).

Jed McCaled, the original founder of Mentougou, transformed it into a bitcoin trading platform in 2010 and sold the website to Mark Karpelès in 2011. Under the latter's management, Mentougou once became the largest bitcoin exchange in the world, taking on More than 70% of all Bitcoin transactions worldwide. Users registered on Mentougou Exchange have two sub-savings accounts, one is used to store bitcoins, and the other is used to store US dollars or other foreign exchange. Users need to buy bitcoins with the money in the cash account.

It is said that before Mark Karpelès took over Mentougou, the exchange had been the target of hackers and lost a lot of bitcoins. However, under the instigation of Jed McCaled's rhetoric, Mark Karpelès still chose to buy Mentougou Exchange. This email picture shows that Jed McCaled gave Mark Karpelès 4 (bad) ideas to make up for the loss of stolen bitcoins:

1. Slowly use the company's US dollars to buy bitcoins to make up.

2. Hoard Bitcoin, if Bitcoin appreciates, the money will be earned back.

3. Attract big bitcoin investors to invest in Mentougou.

4. Why don't you try mining by yourself?

Under the instigation of Jed McCaled, Mark Karpelès took over the mess of Mentougou. Unfortunately, Mentougou was attacked by hackers in the first year of acceptance.

The incident may have started when the computer of one of the company's auditors was first attacked by hackers. Hackers used access to the exchange to change the price of bitcoins to a penny and transfer nearly 2,000 bitcoins.

Perhaps due to good luck, although Mark Karpelès himself insisted on the principle of "the weekend is the biggest without me", and insisted on not working overtime on the weekend when the accident happened in Mentougou, Mentougou still maintained its No. 1 position in the industry at that time and still assumed the global More than 70% of all Bitcoin transactions.

The crisis in Mentougou began to emerge in February 2014

On February 7, 2014, Mentougou suspended all bitcoin withdrawal services. The exchange wrote in a statement, “There is a loophole in the system. If this loophole is not resolved, the transaction details may be tampered with. For example, in the absence of Bitcoin transfer, the system may display that the user will Bitcoins are transferred to electronic wallets.”

On February 23, 2014, Mark Karpelè resigned as a member of the Bitcoin Foundation's Board of Directors. On the same day, Mentougou deleted all posts from its Twitter account.

On February 24, 2014, Mentougou suspended all trading activities, after which the exchange went offline completely. According to leaked internal documents, hackers stole a total of 850,000 bitcoins, the price of which exceeded $470 million at the time, and the exchange was already insolvent. The hacking incident was actually planned for a long time, but the exchange has been unaware of it for many years.

Mark Karpelès then held a press conference to announce the bankruptcy of Mentougou. Customers can apply to become bankrupt creditors. The remaining 170,000 bitcoins on the exchange will be returned to creditors, and compensation will be obtained in 2019 at the earliest.

At this time, the Mentougou Exchange is basically about to withdraw from the stage of history. But the trouble left for Mark Karpelès continues. As the head of Mentougou, customers complain why he didn't take enough security measures to protect assets?

More skeptics believe that there was no hack at all, but that Mark Karpelès took the bitcoin away. Although this sounds unbelievable, it is not groundless. In 2013, a customer named Willy created a new account every 5-10 minutes on the Mentougou Exchange, and then bought 10-20 bitcoins. It went on for months.

It is said that Mark Karpelès has admitted to the court that he is Willy, but he did not do this to make money, but to make up for the shortfall of the exchange. Before Mark Karpelès was imprisoned, he said that he found the missing 200,000 bitcoins in a cold wallet, which added to the mistrust of the outside world.

In 2015, Mark Karpelès was arrested by the Japanese police for misappropriating and illegally occupying exchange funds. He was released on bail in July 2016, but could not leave Japan.

In a public trial at the Tokyo District Court on October 10, 2018, Mark Karpelès denied the victim's challenge of misappropriation of funds, and said that he would conduct detailed accounting of "funds suspected of misappropriation" in the future. Mark Karpeles said that the funds transferred from the company to his personal account are company loans, and he has been using his personal account to advance the company's expenses. As for why he didn't manage private assets and company assets separately, it was "troublesome."