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Exchange collapse·ongoing

Mt. Gox Collapse — February 2014

The exchange handling 70 percent of global Bitcoin trading suspended withdrawals, filed for bankruptcy, and disclosed the loss of 850,000 BTC — a recovery that is still being distributed to creditors a decade later.

Mt. Gox began life in 2010 as a card-trading site (Magic: The Gathering Online Exchange) before pivoting to Bitcoin. By 2013 it was processing roughly 70% of all global BTC trading volume from offices in Shibuya, Tokyo.

Withdrawal delays began appearing in early 2014. On 7 February the exchange suspended BTC withdrawals entirely, citing transaction-malleability issues. On 24 February all trading halted. Four days later Mt. Gox filed for civil rehabilitation in Tokyo District Court and disclosed that approximately 850,000 BTC was missing — 750,000 belonging to customers and 100,000 belonging to the company.

CEO Mark Karpelès was arrested in August 2015. He was convicted in 2019 of falsifying business records but acquitted of embezzlement. The trustee subsequently recovered approximately 200,000 BTC believed to have been held in old wallets.

Distribution to creditors of the recovered BTC and BCH began in July 2024 under the supervision of the Civil Rehabilitation Trustee, ten years after the collapse.

Timeline

  1. Mt. Gox suspends Bitcoin withdrawals

    Citing transaction-malleability issues. BTC trades at ~$827 at the time. The suspension is initially framed as temporary.

  2. All trading halts

    Exchange goes fully offline. CEO Mark Karpelès resigns from the Bitcoin Foundation board.

  3. Civil rehabilitation filed in Tokyo District Court

    Mt. Gox discloses approximately 850,000 BTC missing — 750,000 belonging to customers, 100,000 to the company. Estimated value at filing: $475M.

  4. 200,000 BTC found in old wallets

    The trustee announces recovery of 200,000 BTC discovered in legacy wallet files. Loss revised to ~650,000 BTC.

  5. Karpelès arrested in Japan

    Charged with falsifying business records and embezzlement.

  6. Karpelès convicted on records charge, acquitted on embezzlement

    Sentenced to 2.5 years, suspended for four years.

  7. Creditor distribution of recovered BTC and BCH begins

    After a decade of legal proceedings, the trustee begins distributing recovered cryptocurrency to creditors via approved exchanges including Kraken and Bitstamp.

Who was involved

Legal record

Trustee
Nobuaki Kobayashi
Lead Court
Tokyo District Court
Karpeles Sentence
2.5 years suspended (falsifying business records)
Karpeles Verdict Date
2019-03-15
Civil Rehabilitation Filed
2014-02-28
Creditor Distribution Began
2024-07-15

Structural failures identified

Related records

Sources

  1. Notice regarding the commencement of repayments, Mt. Gox Trustee — Creditor distribution schedule
  2. Mt. Gox civil rehabilitation announcement, Mt. Gox — Initial disclosure of missing BTC
  3. Mt Gox boss faces five-year jail sentence for embezzlement, Reuters — Conviction outcome