Japanese police investigating the disappearance of nearly $500m of bitcoins are poised to rearrest the French founder of the Mt Gox virtual currency exchange amid questions about the purchase of a $48,000 four-poster bed.

Before the exchange collapsed last year, sending shockwaves through the bitcoin community, Mt Gox was the largest such trading platform in the world.

Mark Karpelès, initially accused of manipulating the Mt Gox computer system and inflating the size of his own company account, has been in detention in Tokyo without formal charges since the start of August. People close to the matter said police would today issue a fresh warrant for Mr Karpelès’s arrest on the charge of embezzlement — a change that grants investigators a further three weeks to interrogate him.

The rearrest will extend a process known informally to police and prosecutors as shomusen — the “war of attrition” waged by investigators seeking a confession. A lawyer for Mr Karpelès said that his client denied the original charges and had made no confession under questioning. But after three weeks of interrogation, those close to the matter said police believe they have enough evidence to accuse Mr Karpelès of embezzlement, alleging he misappropriated $2.6m of deposits from the trading accounts of Mt Gox customers. A substantial portion of that money is thought to have been used to buy software rights on behalf of the company. However, according to police allegations, Y6m ($48,000) was diverted to buy a bed. Police suspect it was intended for the personal use of Mr Karpelès.

A lawyer for Mr Karpelès said the deposits were used for investments in new businesses while the bed was an interior decoration for his guesthouse, both of which were meant as marketing tools to promote the use of bitcoins.