TOKYO: Japanese prosecutors have filed charges against Mark Karpeles, the former head of defunct bitcoin exchange MtGox, accusing him of stealing $2.7 million of clients’ money, media reported.

The French-born Karpeles, 30, was arrested last month in connection with the disappearance of hundreds of millions of dollars worth of the virtual currency.

The charges, which were filed on Friday, said Karpeles embezzled a total 321 million yen ($2.66 million) by transferring clients’ funds deposited at MtGox’s bank account to other accounts, Jiji reported.

The prosecutors’ office was not available for comment. The money was spent on buying computer software development rights and an expensive custom-built bed, Jiji said, quoting sources familiar with the matter.

Karpeles was suspected of falsifying data on the outstanding balance of the exchange, at one point the world’s largest hub for trading the digital currency, Japanese media reported at the time of his arrest.

Karpeles has denied the charges, telling investigators the data falsification was done for the company and he had intended to pay back the money, Yomiuri reported on Saturday, citing sources involved in the investigation.