MtGox bitcoin chief Mark Karpeles arrested in Japan

Japanese police have arrested the CEO of the failed company MtGox, which was once the world's biggest exchange of the virtual currency, bitcoin.

Mark Karpeles, 30, is being held in connection with the loss of bitcoins worth $387m (£247m, €351m) last February.

He is suspected of having accessed the exchange's computer system to falsify data on its outstanding balance.

MtGox claimed it was caused by a bug but it later filed for bankruptcy.

Japan's Kyodo News said a lawyer acting on Mr Karpeles' behalf denied his client had done anything illegal.

Mr Karpeles, who was born in France, is suspected of benefiting to the tune of $1m (£640,000), the agency said.

In March 2014, a month after filing for bankruptcy, MtGox said it had found 200,000 lost bitcoins.

The firm said it found the bitcoins - worth around $116m - in an old digital wallet from 2011.

That brings the total number of bitcoins the firm lost down to 650,000 from 850,000.

That total amounts to about 7% of all the bitcoins in existence.

Bitcoin is a virtual currency built around a complicated cryptographic protocol and a global network of computers that oversees and verifies which coins have been spent by whom.