MtGox

Published: 23/04/2020 17:22 - History

MtGox Logo

MtGox.com was a Bitcoin exchange based in Tokyo, Japan that launched in 2010.


The exchange originally opened in 2006 when it was a marketplace for the popular card game “Magic: The Gathering Online”. This is where it gets its name from (Magic The Gathering Online eXchange). The exchange then pivoted to trading Bitcoin in 2010 when its founder Jed McCaleb first discovered the cryptocurrency and decided there was a gap in the market for a Bitcoin exchange.


In March 2011, Jed McCaleb sold the exchange to a French software developer, named Mark Karpelès. McCaleb said “to really make MtGox what it has the potential to be would require more time than I have right now. So I've decided to pass the torch to someone better able to take the site to the next level”.


Several months later, MtGox had its first major security breach, a hacker was able to transfer large amounts of Bitcoin to himself.


On 7th February 2014, MtGox paused all Bitcoin Withdrawals, citing the company wanted to “obtain a clear technical view of the currency processes”. This was only the start of what was to come. 3 days later, the company announced it was working with several Bitcoin Core developers to mitigate an issue where it was “possible for someone to use the bitcoin network to alter transaction details to make it seem like a sending of bitcoins did not occur even when it did”.


On 17 February 2014, whilst most other Bitcoin exchanges were back in operation following the Bitcoin Core bug, MtGox’ Bitcoin withdrawals were still down. A week later, on 24 February 2014, Mt. Gox completely stopped all trading, and within hours, MtGox.com returned a blank page. A leaked internal document claimed that the exchange was “insolvent” and had “lost 744,408 Bitcoin due to a hack”.


Finally, on 28 February 2014, MtGox filed for bankruptcy in Tokyo, Japan. It reported that it had lost $473,000,000 (750,000 Bitcoin) worth of customers funds and 100,000 of its own Bitcoin. The company later found a wallet file with 200,000 Bitcoin, bringing the total losses down to 650,000 Bitcoin. Security firm “WizSec” later concluded that the firm was first hacked in early 2011, and the missing Bitcoin was taken over a long period since this date.


At its most dominant point in 2014, MtGox was responsible for over 70% of all Bitcoin transactions.


In April 2014, MtGox ended its plan to rebuild the exchange and filed to be liquidated in Toyko.


In March 2019, the Tokyo District Court found Karpeles guilty of altering the company's financial records to increase Mt. Gox's holdings by $33,500,000. He was sentenced to a suspended prison sentence of four years.


(Mark Karpeles attending a news conference in February 2014) (Mark Karpeles attending a news conference in February 2014)

In October 2019, MtSocks launched (not affiliated to MtGox), selling Bitcoin themed socks. Their name is a play on words of the infamous Bitcoin exchange.