After the first attack, activity on Mt.Gox gradually recovered, and by 2013 it had become the world’s largest bitcoin trading platform. The company moved its head office to the prestigious business district of Tokyo, and Karpeles was an active speaker of the bitcoin industry in the media.
As it turned out later, with external successes, Mt.Gox experienced great internal difficulties. For example, she had no control over the quality and security of the code. In addition, the project lacked a system of financial accounting and control of balance sheets and reserves. Simply put, no one followed the flows of money and cryptocurrencies.
Most of the users of Mt.Gox were from the USA, however, the exchange did not have any license to work there. Therefore, in May 2013, the United States authorities seized the project funds in the amount of about $ 5 million, which were stored at the Dwolla processing service. After that Mt. Gox nevertheless obtained a license of a cash operator from FinCEN.
However, in June, the crypto exchange stopped dollar deposits after the Japanese bank Mizuho refused to service its accounts. Users also began to complain massively about long withdrawals of money.
Re-hacking and closing Mt.Gox
In February 2014, Mt.Gox suddenly stopped bitcoin withdrawals. The platform’s press release stated that a bug in the bitcoin code made it possible to actually double spend coins, which the attackers applied to the exchange’s blockchain address. After that, the platform finally stopped all conclusions.
By the end of the month, the bitcoin price on Mt.Gox was only 20% of the market average, which was a clear indication of investors’ confidence that the project would no longer be able to solve the problems that had arisen. On February 24, all trading operations were stopped on the platform, and a few hours later its website stopped working.
As it turned out later, then the exchange team discovered the theft of approximately 750,000 BTC from users, which was not noticed for several years. As a result, the platform turned out to be insolvent. On February 28, Mt.Gox announced bankruptcy and closure.