What is Mt Gox? The Shocking Collapse of the World’s Largest Bitcoin Exchange
The collapse of Mt Gox – once the world’s largest Bitcoin exchange – was a painful lesson in the security risks of the cryptocurrency industry. It took more than a decade for creditors to start receiving compensation, and it forced the entire crypto industry to rethink its standards for security and digital asset management.
What is Mt Gox?
The story of Mt Gox began in 2007, when developer Jed McCaleb created the Magic: The Gathering Online Exchange (MTGOX) platform, which specialized in trading Magic: The Gathering cards.
In 2010, after learning about Bitcoin, McCaleb decided to transform MTGOX into a cryptocurrency exchange. However, less than a year later, he sold the platform to Mark Karpeles, a French developer living in Japan.
Under Karpeles, Mt Gox flourished. By 2013, the exchange was handling more than 70% of all global Bitcoin transactions, becoming the world's largest cryptocurrency trading center at the time.
The collapse of Mt Gox
However, in February 2014, Mt Gox suddenly suspended all Bitcoin transactions. In April 2014, the company officially filed for bankruptcy in the US, after discovering that 850,000 BTC (worth about $450 million at the time) had been stolen from its cold wallets for years without being detected.
Investigations revealed that hackers had stolen the private keys to Mt Gox's wallets since September 2011, allowing Bitcoin to be withdrawn gradually without attracting attention. Reports from security firm WizSec say the theft continued for years, until Mt Gox was completely bankrupt.
At the time of the bankruptcy filing, the amount of Bitcoin lost was equivalent to 7% of the total global BTC supply.
Bankruptcy and compensation
After the collapse, more than 24,750 investors filed for compensation. It wasn't until 2018 that a Japanese court approved a rehabilitation plan that expected to return about $1 billion to creditors.
However, the process has been slow. The first payments weren't made until December 2023 — nearly 10 years after the incident. As of March 2025, Mt Gox still held about 35,000 BTC, worth more than $3 billion.
Due to a number of technical and legal factors, the deadline for completing the payments has been pushed back from October 2024 to October 2025.
Recent Mt Gox Movements
In March 2025, Arkham Intelligence recorded several large transactions from Mt Gox wallets, including the movement of thousands of BTC to new addresses. Specifically:
March 6: 12,000 BTC transferred.
March 11: 11,833 BTC transferred.
March 25: Another 10,608 BTC transferred to another wallet under Mt Gox's control.
A small amount of BTC was also sent to Kraken, most likely to test the system in preparation for mass payouts.
These movements raise expectations that the payment to creditors is progressing.
Who was behind the Mt Gox hack?
The identity of the person behind the hack remains a mystery. Some theories suggest that it was an “inside job,” while others suspect nation-state hackers like North Korea were behind it.
To this day, no conclusive evidence has been found to identify the culprit, making the Mt Gox attack one of the greatest mysteries in crypto history.
The Impact of Mt Gox
The collapse of Mt Gox shook confidence in Bitcoin at a time when the market was still in its infancy. It also ushered in a new era of risk management, digital asset security, and laid the foundation for the emergence of more professional centralized exchanges like Binance, Coinbase, and Kraken.
In retrospect, if Mt Gox had not collapsed, it might have become the largest trading empire in the crypto world today. But instead, the Mt Gox disaster became a reminder of the fragility of the early blockchain ecosystem – and a hard lesson in the importance of security and close oversight.
