Before you want to know “What Happened to Mt. Gox?”, you should know more about Mt. Gox
Mt. Gox
Mt. Gox was a cryptocurrency exchange located in Tokyo that ran from 2010 to 2014. At its height, it handled over 70% of all Bitcoin transactions. While it is mainly called Mt. Gox, it is also known as MtGox or Mt Gox. The exchange went bankrupt in 2014, but it remained involved in lawsuits and rumors for many years after.
The History
Jed McCaleb started the website that turned into the Mt. Gox exchange. It began as a platform for fans of the card game “Magic: The Gathering” to trade cards online.
The name Mt. Gox stands for “Magic: The Gathering Online Exchange.” In 2011, the site was sold to Mark Karpeles for six months of revenue. Karpeles then became the main owner and CEO.
At its height, Mt. Gox was the largest Bitcoin exchange in the world. It managed 70% to 80% of all trading, playing a huge role in influencing Bitcoin’s market trends.
What Happened to Mt. Gox
Mt. Gox became well-known in the cryptocurrency world, which made it a target for hackers. Over the years, it faced multiple security issues. In 2011, hackers took advantage of stolen login details to move Bitcoins. That same year, flaws in the network protocols caused thousands of Bitcoins to go missing.
In the months before February 2014, customers grew more frustrated with issues withdrawing their funds. Technical problems made it hard for the company to track transaction details, leading to confusion about whether bitcoins had been sent to customers’ digital wallets.
The exchange faced a major crisis in February 2014. At the start of that month, it stopped withdrawals, claiming it found suspicious activity in its digital wallets. The company realized it had “lost” hundreds of thousands of Bitcoins, with estimates of the lost coins varying between 650,000 and 850,000.
Although it later managed to recover 200,000 Bitcoins, the loss severely impacted the market. The value of the missing Bitcoins was worth hundreds of millions, leading Mt. Gox to declare insolvency. It filed for bankruptcy in the Tokyo District Court and was instructed to liquidate in April 2014 while figuring out how to repay its creditors.
There were rumors that Russian hackers might have been involved in the theft, and some hoped that a portion of the stolen Bitcoins could be retrieved.
Conclusion
Mt. Gox was an early cryptocurrency exchange located in Tokyo. It gained a bad reputation due to significant losses from hacks that occurred between 2011 and 2014. The exchange went bankrupt in 2014, and as of April 2024, creditors were still receiving payments.