The story of the Japanese exchange that went bankrupt in 2014 with 844,408 bitcoin lost: its rise, the causes of its collapse, and the status of creditor repayments, now expected by October 31, 2026.
TL;DR: Mt. Gox, launched in 2010 as a trading site for collectible cards and later becoming the world’s largest Bitcoin exchange (approximately 70% of global volumes in early 2013), declared bankruptcy on February 28, 2014, following the loss of 844,408 bitcoin. The repayment process for approximately 127,000 creditors is still ongoing: the first bitcoin payments began in July 2024, but in October 2025 the bankruptcy trustee postponed the final deadline for the third time, now set at October 31, 2026.
Origins: from collectible cards to exchange
Initially conceived as a trading space for online collectible cards of the game Magic: The Gathering Online, the Mt. Gox platform was born in July 2010. The name is directly linked to its original purpose, consisting of the initials of Magic: The Gathering Online Exchange.
The founder of the platform is Jed McCaleb, an American programmer and entrepreneur who later became known for his contribution to the development of altcoins such as Ripple and Stellar.
A few months after the launch, the website’s business model was changed, and Mt. Gox became an online marketplace for trading bitcoin.
As early as March 2011, McCaleb decided to sell Mt. Gox to French programmer and Bitcoin enthusiast Mark Karpelès.
The rise and problems
At the time, Mt. Gox was already establishing itself in its reference market, effectively becoming one of the very first exchanges in the world. Thanks also to the increase in the price of bitcoin, growth was exponential: by early 2013, Mt. Gox became the largest exchange in the world by trading volumes, handling approximately 70% of bitcoin trading volumes.
The exchange’s problems would only become serious in 2014, but one of the most widespread suspicions is that Mt. Gox was actually subject to continuous hacker attacks as early as 2011.
The first breach dates back to June 2011, presumably due to a compromised computer belonging to a company auditor. On that occasion, the hacker used the auditor’s credentials to access the exchange, artificially manipulate the price of bitcoin by quoting it at 1 cent each, and transfer about 2,000 bitcoin from customers’ accounts.
Due to this vulnerability, it was also estimated that some customers were able to purchase 650 bitcoin at the price of 1 cent each.
Following the hack, Mt. Gox implemented a series of security measures, including transferring a considerable amount of bitcoin to cold wallets. Despite the countermeasures, on February 7, 2014, there was a sudden suspension of withdrawals and the website became inaccessible.
On February 24, the exchange permanently suspended bitcoin trading, and four days later the company declared bankruptcy in Japan. Karpelès admitted to the loss of 844,408 bitcoin, of which 744,408 belonged to customers and 100,000 to Mt. Gox itself.
To this day, the hack at Mt. Gox represents the largest failure ever to occur at an exchange in terms of lost bitcoin.
A few weeks after the collapse, in March 2014, Mt. Gox claimed to have recovered 200,000 bitcoin. Karpelès immediately became the subject of investigations. In 2015, he was arrested in Japan on charges including fraud and embezzlement. Karpelès did not plead guilty to the charges and remained in prison until July 2016, when he was released on bail.
The causes of the failure
After the company’s bankruptcy, some employees leaked details about the exchange’s internal operations. The descriptions provided painted a disastrous picture: disorganized teams, negligence in platform management, lack of expertise, poor security procedures, and a series of serious issues related to the website’s source code.
Investigations initiated in 2014 revealed that Mt. Gox’s wallet private key was not encrypted. According to the investigations, the key was stolen in 2011, following the breach of the wallet.dat file. It is unclear whether access to the file was obtained through a hack or by an insider.
Once the file was obtained, hackers were able to access the wallet and gradually transfer bitcoin out without the hack being detected by the exchange.
Mt. Gox attributed the losses to the vulnerability known as transaction malleability, stating that hackers exploited this bug to repeatedly withdraw bitcoin from the exchange. However, some argue that transaction malleability could not have allowed hackers to steal such a large amount of bitcoin without being noticed. In fact, the core problem was that the exchange was processing the same withdrawal request multiple times for the same user.
On-chain analysis showed that, although the transaction malleability issue was real, there was no widespread use of that type of attack during those years. The analysis made it clear that only 386 bitcoin could have been stolen by exploiting the transaction malleability issue.
The compensation plan
Since Mt. Gox’s bankruptcy declaration, a lengthy process began that led to the partial reimbursement of customers affected by the collapse.
In November 2021, Japanese courts and Mt. Gox creditors reached an agreement on the exchange’s rehabilitation plan. The plan establishes a multi-phase registration and compensation process. Creditors approved for rehabilitation, equipped with a creditor code, were able to register on the Mt. Gox Online Rehabilitation Claiming System portal to request reimbursement.
According to the original compensation plan, Mt. Gox was supposed to reimburse its customers by September 30, 2023. The company subsequently rescheduled the reimbursement to October 31, 2023.
In September 2023, Kobayashi announced a second deadline extension: October 31, 2024, to finalize the reimbursement process.
According to some official documents from 2019, the company’s bankruptcy trustee held 141,686 bitcoin, as well as some bitcoin cash and Japanese yen.
On December 26, 2023, some customers confirmed receiving reimbursement in yen via bank transfer or PayPal. Some even received the reimbursement twice due to an error by the exchange. Within the r/mtgoxinsolvency subreddit, a user reported the email that Mt. Gox sent to some users, admitting the error and requesting the return of the second payment.
The 2024–2026 repayments: where do things stand?
After years of delays, bitcoin and bitcoin cash repayments officially began in July 2024. On July 23, 2024, Dave Ripley, CEO of Kraken, announced the completion of the distribution through his exchange; alongside Kraken, Bitstamp, SBI VC Trade, Bitbank, and Coincheck were also tasked with processing payments for approximately 127,000 creditors.
In March 2025, bankruptcy trustee Nobuaki Kobayashi reported that approximately 19,500 creditors had received repayment in bitcoin and bitcoin cash, in addition to fiat currency payments. However, a significant portion of claims remained blocked due to documentation issues, incomplete verifications, and technical difficulties with the designated exchanges.
For this reason, on October 27, 2025, the trustee announced a further postponement: the deadline for base, lump-sum early, and intermediate repayments was moved from October 31, 2025 to October 31, 2026. This is the third formal extension of the rehabilitation plan approved in 2021.
According to on-chain data from Arkham Intelligence, as of June 2026 the estate of the exchange in liquidation still holds approximately 34,500 bitcoin earmarked for the remaining payment phases. On June 2, 2026, the trustee moved approximately 10,422 BTC to a new address — an internal transfer structurally similar to those that have previously preceded distributions to creditors.
The core principle of the plan remains unchanged: creditors receive a fraction of the bitcoin they held on the exchange (approximately 21% of the original claim; those who opted for the lump-sum early repayment receive 90% of that share), in bitcoin, bitcoin cash, or fiat currency. Those who chose repayment in bitcoin have nonetheless benefited from the asset’s appreciation since 2014, when the value of claims was frozen in yen.
Frequently asked questions
What happened to Mt. Gox?
Mt. Gox was the world’s largest Bitcoin exchange. In February 2014, it suspended withdrawals and declared bankruptcy, admitting the loss of 844,408 bitcoin, largely stolen by hackers over the preceding years through the compromise of the platform’s wallet.
Have Mt. Gox creditors been repaid?
Partially. Bitcoin and bitcoin cash payments began in July 2024 through exchanges such as Kraken and Bitstamp; as of March 2025, approximately 19,500 creditors had been repaid. The deadline to complete repayments has been extended to October 31, 2026.
How many bitcoin did Mt. Gox lose?
844,408 bitcoin, of which 744,408 belonged to customers and 100,000 to the company itself. Approximately 200,000 were recovered shortly after the bankruptcy and form the basis of the repayment fund.
Who owned Mt. Gox?
Founded by Jed McCaleb in 2010, the exchange was sold in 2011 to French programmer Mark Karpelès, who ran it until its bankruptcy and was subsequently arrested in Japan in 2015.
When will Mt. Gox repayments be completed?
The deadline set by bankruptcy trustee Nobuaki Kobayashi is October 31, 2026, following three successive postponements (2023, 2024, and 2025).
Why is the Mt. Gox collapse still relevant?
It is the largest exchange failure in terms of bitcoin lost and the origin of the principle “not your keys, not your coins”: funds left in the custody of third parties represent a claim against the platform, not bitcoin you actually own.
