Japan arrests MtGox Bitcoin head over missing $387m Police detain Mark Karpeles, allegedly implicated in disappearance of almost $390m worth of virtual currency.

Japanese police have arrested Mark Karpeles, head of the
collapsed MtGox Bitcoin exchange, over the
disappearance of about $390m worth of the virtual
currency.
The global virtual currency community was shaken by the
closure of MtGox, which froze withdrawals in February
2014 because of what the firm said was a bug in the
software underpinning Bitcoin that allowed hackers to
pilfer them.
Karpeles is suspected of having accessed the exchange's
computer system to falsify data on its outstanding
balance, Kyodo News and public broadcaster NHK said on
Saturday.
Police did not immediately confirm Karpeles' arrest but
local television footage showed authorities taking him into
custody.
MtGox, which once boasted of handling about 80 percent
of global Bitcoin transactions, filed for bankruptcy
protection soon after the cyber-money went missing,
admitting it had lost 850,000 coins worth $387m.
Karpeles later said he had found about 200,000 of the lost
Bitcoins in a "cold wallet" - a storage device such as a
memory stick that is not connected to other computers.
Answers demanded
Bitcoins are generated by complex chains of interactions
among a huge network of computers around the planet
and are not backed by any government or central bank.
A cloud has been hanging over the Tokyo-based exchange
and Karpeles as investors have demanded answers, and
called on the firm to publicise its data so that hackers
around the world can help analyse what happened at
MtGox.
"They say it's under investigation. That's all they say," a
French investor told the AFP news agency last year at a
creditors' meeting in Tokyo.
"They seem to refuse to make public more precise
information about MtGox's own [information] and how
and when it was stolen, if it was really stolen."
Karpeles had reportedly refused to travel to the US, where
he was being asked to appear for questioning in
connection with MtGox's collapse.
Related: Understanding Bitcoin
Regulators have scrambled to respond to the use of
Bitcoins, with the European Banking Authority last year
calling on the region's banks not to deal in virtual
currencies until rules are developed to stop them being
abused.
Launched in 2009 by a mysterious computer guru, Bitcoin
offers a largely anonymous payment system and can be
stored either virtually or on a user's hard drive.
Backers say virtual currencies allow for an efficient and
anonymous way to store and transfer funds online.
But regulators argue the lack of legal framework
governing the currency, the opaque way it is traded and its
volatility make it dangerous.
After MtGox, Bitcoin's reputation was also damaged when
US authorities seized funds as part of an investigation into
the online criminal enterprise Silk Road that made millions
of dollars from drug sales and other criminal enterprises.
During the trial of the man accused of masterminding the
network, a witness said investigators once suspected
Karpeles of running the online black market - a claim he
denied.
Source: AFP