What Happened to Mt. Gox? ⚠️ Scandal

Mt. Gox was a Tokyo-based bitcoin exchange that grew from a niche trading site into the world’s largest BTC marketplace by early 2010s. Originally created by Jed McCaleb and later sold to Mark Karpelès, the platform processed the majority of global bitcoin volume at its peak, making it a central on-ramp for early retail users and miners.

Mt. Gox’s rapid rise outpaced its internal controls. The exchange faced recurring operational issues, security incidents, and reconciliation gaps between customer balances and actual wallets. In early 2014, withdrawals were halted amid mounting complaints, and the company disclosed that a very large quantity of bitcoin was unaccounted for. Soon after, Mt. Gox filed for bankruptcy protection in Japan, triggering one of the most consequential failures in crypto’s history.

In the years that followed, administrators located a portion of previously missing coins, and the case moved from straight liquidation to civil rehabilitation, with the goal of returning assets to creditors. The collapse reshaped expectations for exchange governance, custody procedures, and proof-of-reserves, and it remains a touchstone for discussions about security, auditing, and consumer protection in digital-asset markets.