The altcurrency Bitcoin has endured a strenuous rise to widespread recognition. Created after the cataclysmic crash of Lehman Brothers in the wake of the 2008 financial crisis; Bitcoin has always been surrounded by persistent controversy. From the well-documented Silk Road incident to illicit and clandestine mining, now Bitcoin has been plunged back into disregard once again. Now, Mark Karpelès, creator and founder of one time major exchange Mt. Gox, has been detained and questioned by Japanese authorities.
Police, who detained the French national, are said to have focused their investigation around claims that Karpelès played a decisive part in losses of a colossal $390 million. The Ex-Boss of the now defunct Bitcoin exchange, is also alleged to have illegally inflated his own personal account to the tune of $1 million in the year of 2013. However at this present moment, it remains unclear whether any criminal charges will be pursued.
In 2014 the Bitcoin community was shaken to its core, as withdrawals from the largest Bitcoin exchange in the world were suspended. The crisis was claimed to have been caused by a serious and malicious bug, which had heavily affected the exchanges fundamental computer systems. The bug supposedly left the exchange extremely vulnerable to online hackers who then preceded to steal millions of dollars of Bitcoins. However it is becoming increasingly more likely that some of the missing Bitcoins were syphoned off to an account affiliated to Mr Karpelès.
In response to the losses, the former CEO claimed that some of the 850,000 missing Bitcoins were found on a “cold wallet” storage device, such as a memory stick or computer hard drive. Yet admittedly this has not been officially confirmed.
Whether criminal charges form a part of the case or not, the news has done nothing to help an already highly unstable and volatile market. One such way being in a possible delay in blockchain technology advancements. Many high profile players in the Bitcoin world have called for such implementation, however due to the stringent regulation associated with the financial sector, many banks have been reluctant to change operating procedures. More importantly such controversies may even lead to the halting of the widespread adoption of the cryptocurrency, something which had begun to take pace in the aftermath of the Greek liquidity crisis.
Whatever transpires from the events in Tokyo, the real people affected are the investors who wholeheartedly entrusted the goliath exchange with Bitcoins. Not to mention innovative Bitcoin start-ups who will, no doubt, encounter strenuous and excessive red tape due to Mt. Gox.
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