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Former Mt. Gox Exchange CEO Gets Prison Sentence

After going on for about five years, a Japanese court has on Friday March 15 sentenced the former head of Mt. Gox cryptocurrency exchange to a two-and-half-year suspended term in prison. Mark Karpelès, a French national, was found guilty of falsifying records while he presided over the rise of Mt. Gox to become the world’s largest Bitcoin exchange. The court rejected the prosecutors’ main argument that he embezzled millions of dollars in customer funds for which they had sought a 10-year jail term.

Mt. Gox started in 2010 until it filed for liquidation in 2014 after claiming it was hacked of  850,000 bitcoin though part of it was later recovered. According to Financial Times, Karpelès was also not charged for the missing bitcoins.

The verdict comes as the March 15 submission deadline for the statement by the Rehabilitation Trustee of approval or disapproval on rehabilitation claims regarding Users’ rights to make claims against Mt. Gox for the return of cryptocurrency and money (“Exchange-Related Rehabilitation Claim(s) was reached.

The Tokyo District Court issued an order to change the claims submission schedule among other matters earlier in January. The period to examine proofs of rehabilitation claims was also changed from March 22 to March 29, 2019. The submission deadline for the proposed rehabilitation plan has been changed to April 26, 2019.

The claim processing and Karpeles’ verdict form a part of a major legal intervention effort in a cryptocurrency exchange operation.

In related developments, Bitcoin saw some moves also on Friday that could have had an impact on its market. The Chicago Futures Exchanges (CFE) of the Chicago Board Options Exchange (CBOE) revealed it will no longer offer any new contracts for its cash-settled XBT Bitcoin futures product going forward.

Bitcoin price got strengthened by the end of the day with suggestions it could eventually hit the $4000 range for good. Its 24-hour volume which has now doubled since the year start, continued to build up in the week to touch $11 bln mark for the first time in 2019 – a peak last seen in April 2018. In addition, the Bitcoin Lightning Network capacity increased from over 800 BTC to 1000 BTC in a couple of hours.

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