thing is that Mt.Gox is one of the first bitcoin exchanges in the world, which began operating in 2010. By the beginning of 2014, the platform accounted for 70% of the total trading volume of the first cryptocurrency.
In 2014, Mt.Gox stopped working due to a discovered “hole” in user balances due to a hacker attack. During 2011-2013, the attackers managed to withdraw 650,000 BTC from the exchange unnoticed. This was the largest hack in the history of cryptocurrencies.
Since 2018 Mt. Gox is in the process of civil rehabilitation, which involves the payment of the remaining cryptocurrency on the accounts of the exchange to affected customers. In total, about 25,000 users applied for compensation.
The organizers and perpetrators of the Mt.Gox hack have not yet been found. In the United States, Alexander Vinnik, the former administrator of the Russian BTC-e exchange, is being tried on charges of laundering cryptocurrency stolen from Mt.Gox.
Who and when opened Mt.Gox
The history of Mt.Gox did not begin with cryptocurrency. In 2007, Jed McCaleb, the future co-founder of the Ripple and Stellar crypto projects, registered the site mtgox.com . On it, he launched a platform called “Magic: The Gathering Online EXchange” for trading cards of a popular fantasy game. In the abbreviated version, the name of the service sounded like Mt.Gox.
After McCaleb learned about cryptocurrency in the summer of 2010, he decided to transform Mt.Gox into a bitcoin exchange. A year later, McCaleb sold it to the French developer Mark Karpeles, who lived in Japan, motivating his decision with a lack of time for the development of the project.
According to Rollingstone, Karpeles received Mt.Gox virtually for free. In exchange, he was obliged to pay McCaleb 50% of the profits in the first 6 months of ownership and 12% in the future.
Meanwhile, Mt.Gox quickly gained popularity. In 2011, the user base of the platform already numbered tens of thousands of customers, and by 2013, the volume of bitcoin trading on the site amounted to about 70% of the global total.
The first hacker attacks on the exchange
Security problems started at Mt.Gox even before the sale of the platform. As it became known later, in March 2011, Karpeles informed McCaleb about the loss of user funds in the amount of about 80,000 BTC. As a result, they turned a blind eye to it. Already in 2020, Karpeles said that the stolen funds were transferred to a blockchain address owned by the creator of Bitcoin SV, Craig Wright. Some suggest that he is behind the subsequent hacking of the platform.
The first publicly recorded attack on Mt.Gox occurred in June 2011. The hackers managed to steal at least 25,000 BTC, which was about $400,000 at that time. As a result, the bitcoin price on Mt.Gox collapsed from $17 to almost zero.
Based on the results of an internal investigation, Karples came to the conclusion that the attackers hacked the old administrator account of Jed McCaleb, which allowed access to funds and personal data of the exchange’s clients.
About a week after the Mt attack. Gox restored work, and Karples proved that he controls bitcoins on the platform’s wallets by making a confirmation transaction, and reimbursed customers for losses.