Bitcoin exchange CEO spent embezzled funds on prostitutes

The head of collapsed Bitcoin exchange MtGox is facing fresh embezzlement charges, with allegations arising that he spent stolen funds on prostitutes. Tokyo police said they had arrested France-born Mark Karpeles, 30, for moving 20 million yen ($166,000) in client money to his bank account, in addition to fraud allegations over the disappearance of hundreds-of-millions-of-dollars-worth of the virtual currency. Japan’s top-selling newspaper reported that the defunct firm’s chief had spent an unspecified sum on prostitutes.

Several women whom he met at venues that offer sexual services

Jiji Press news agency, citing police, describing the nature of the allegations

Karpeles was first arrested in August over claims he fraudulently tinkered with data and transferred funds to other firms controlled by him dozens of times between 2011 and 2013. He was later re-arrested for allegedly pocketing about 321 million yen worth of Bitcoin deposits. The Tokyo-based MtGox filed for bankruptcy last year after admitting 850,000 coins, worth around $480 million at the time, or $387 million at current exchange rates, had disappeared from its digital vaults. The company initially said there was a bug in the software underpinning Bitcoins that allowed hackers to pilfer them. Karpeles later claimed he had found some 200,000 of the lost coins in a “cold wallet” - a storage device, such as a memory stick, that is not connected to other computers.