MtGox CEO goes on trial in Japan over missing Bitcoins

The former CEO of collapsed Bitcoin exchange MtGox goes

on trial Tuesday in Tokyo over the disappearance of hundreds of millions

of dollars worth of the virtual currency from its digital vaults.

Frenchman

Mark Karpeles – once the high-flying head of the world's busiest

Bitcoin trading platform, who reportedly lived in an

11,000-US-dollars-a-month penthouse – is facing embezzlement and data

manipulation charges.

The 32-year-old was first

arrested in August 2015 and released on bail nearly a year later over

allegations he fraudulently manipulated data and pocketed millions worth

of Bitcoins.

MtGox, which claimed it once hosted

around 80% of global Bitcoin trading, shuttered in 2014 after admitting

that 850,000 coins – worth around 480 million US dollars at the time –

had disappeared from its 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.

Tokyo-based MtGox filed for bankruptcy protection soon

after the cyber-money went missing, leaving a trail of angry investors

calling for answers and denting the virtual currency's reputation.

Karpeles,

who said he is working as an IT consultant, is active on social media

and has commented on issues concerning Bitcoin but not on details of his

criminal case.

In the wake of the MtGox scandal,

Japan passed a bill stipulating that all virtual currency exchanges must

be regulated by its Financial Services Agency.

Virtual

currencies are generated by complex chains of interactions among a huge

network of computers around the world, and are not backed by any

government or central bank, unlike traditional currencies.

Despite

the demise of MtGox and concerns about security, Bitcoin and hundreds

of rival digital currencies are becoming increasingly popular and

accepted by merchants worldwide.

Bitcoin has seen

wild volatility during its short life, soaring from just a few US cents

to around 2,500 US dollars now, more than double its value just a few

months ago.

Backers say virtual currencies offer an efficient and anonymous way to store and transfer funds online.

Critics

argue the lack of legal framework governing the currency, the opaque

way it is traded and its volatility make it dangerous.

There are also security concerns.

Bitcoin

has suffered hacking incidents including one last year in which a major

Hong Kong-based exchange Bitfinex suspended trading after $65 million

in the virtual unit was stolen.