Mt. Gox - what is it?

Mt. Gox is one of the first projects that took an undisputed leadership position from its launch in 2010 to its completion. In 2014, this platform accounted for more than 70% of the total transactions and deals worldwide. The main focus was on cryptocurrencies.

Cryptocurrency exchanges are special platforms through which investors and traders worldwide work. Such services provide convenient tools for trading, including automatic opening and closing of orders, advisors, and analyzers to clarify favorable conditions for transactions, etc. To date, Mt. Gox is the most striking example of the collapse of a cryptocurrency exchange.

History of the development of Mt. Gox

The history of the creation of this company began even before the introduction of the cryptocurrency financial system. Its owner, Jed McCaleb, launched a service back in 2007 that offered the option of trading cards of a top fantasy game.

After analyzing the information and potential prospects for the development of the cryptocurrency sector after its implementation, a decision was made to change the direction of activity. This year, Mt. Gox transformed into one of the first cryptocurrency exchanges. A year later, the platform was sold to Mark Karpeles. Moreover, the terms of the deal were very interesting. According to publicly available information, Karpeles received this service at his disposal with the following obligations:

  • payment of 50% of profits in the first six months;
  • payment of 12% of the platform's profit for each month of further service operation.

Karpeles began actively promoting this project, and by the next year, he had received tens of thousands of regular customers. And until the moment of the hacker attack, which ultimately led to the complete collapse of the exchange, he completely reached the level of the undisputed leader in this niche.

First problems

Although the Mt. Gox was very popular, security problems were noted back in 2011. During this period, the theft of user funds totaling 80 thousand bitcoins was revealed. This situation was hushed up by compensating users for losses without high-profile proceedings. However, after this, the price of Bitcoin fell from $17 to virtually zero.

Until 2013, measures were taken to prevent new successful hacker attacks on the exchange. However, technically, the matter was not brought to perfection, and proper attention was not paid to control and security. In addition, as it turned out later, there was a negligent attitude towards tracking money flows.

In 2013, there were also problems with the broker's legitimacy, after which a license was obtained from FinCEN. But behind this, there are problems with dollar transactions despite the enormous external success of the exchange.

Collapse and bankruptcy

After being hacked again in 2014, Mt. Gox never recovered. At that time, the scammers managed to hack the system and steal more than 850 thousand bitcoins, equivalent to $440-480 million.

After lengthy legal proceedings, it was stated that the company could compensate users only 0.23 BTC for every 1 bitcoin. This information became publicly available only in 2021. However, given the price correlation over such a long period of time, users should end up staying in profit and making more than 10x profits. The payment plan and schedule have already been published, but there is still no confirmation of the start of payments.