Exchange MT.Gox: The largest hacking in the history of cryptocurrencies

Exchange MT.Gox: The largest hacking in the history of cryptocurrencies

History MT.Gox did not start with cryptocurrency. In 2007, Jed McCeleb, the future co -founder of crypto projects Ripple and Stellar, registered the website of MTGOX.Com. On it, he launched a platform called “MAgic: The Gathering ONline EXChange ”for trading cards of popular fantasy game. In the abbreviated version, the service name sounded like mt.Gox.

After McCaleb found out about cryptocurrency in the summer of 2010, he decided to transform MT.Gox in Bitcoin-Biru. A year later, McCaleb sold it to the French developer Mark Karpelsu, who lived in Japan, motivating his decision with a lack of time to develop the project.

According to RollingStone, Carpels received MT.Gox is actually free. In exchange, he was obliged to pay Mackeletes 50% of profit 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 totaled tens of thousands of customers, and by 2013 the volume of bitcoin bidding on the site amounted to about 70% of the global.

The first hacker attacks on the exchange

Safety problems began at MT.Gox before the sale of the platform. As it became known later, in March 2011, Karpels told McCelebu about the loss of user funds in the amount of about 80,000 BTC. As a result, their eyes closed this. Already in 2020, Karpels said that the stolen funds were transferred to the blockchain address, which is owned by the creator of Bitcoin SV Craig Wright. Some suggest that it is he who is behind the subsequent hacking of the platform.

The first publicly recorded attack on MT.Gox occurred in June 2011. Hackers managed to steal at least 25,000 BTC, which was approximately $ 400,000 at that time. As a result, the price of bitcoin on mt.Gox collapsed from $ 17 almost to zero.

According to the results of the internal investigation, Karples came to the conclusion that the attackers hacked the old administrator account of Jed McCaleb, which allowed access to the funds and personal data of the exchange customers.

About a week after the attack MT. GOX restored the work, and Karples proved that it controls bitcoins on the wallets of the platform, making a confirming transaction, and compensated to customers losses.

Success and new problems (2011-2013)

After the first attack, activity on MT.GOX gradually recovered, and by 2013 it became the world’s largest platform for Bitcoin trade. The company transferred the head office to the prestigious business area of ​​Tokyo, and Karpels 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 did not have control over the quality and safety of the code. In addition, the project did not contain a system of financial accounting and control of balance and reserves. Simply put, no one followed the streams of money and cryptocurrencies.

Most MT users.GOX were from the USA, but the exchange did not have any work license there there. Therefore, in May 2013, the United States authorities arrested the project funds in the amount of about $ 5 million, which were stored at the Dwolla processing service. After that, MT. GOX nevertheless received a license from the operator of cash with Fincen.

However, in June, the cryptocurrency officer stopped dollar replenishment after her accounts refused to serve the Japanese bank Mizuho. Users also began to massively complain about long -term conclusions of money.

Repeated hacking and closing MT.Gox

In February 2014 MT.Gox suddenly stopped bitcoin’s conclusions. The press release of the platform stated that a certain bug in the Bitcoin code made a possible double waste of coins that attackers applied the Exchange blockchain address of the exchange. After that, the platform finally stopped all conclusions.

By the end of the month, the price of bitcoin on mt.GOX was only 20% of the average market, which was a vivid evidence of investors’ confidence that the project could no longer solve the problems that arose. On February 24, all trading operations were stopped on the platform, and a few hours later her site stopped working.

As it turned out later, then in the exchange team 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. February 28 MT.Gox announced bankruptcy and closing.

How many cryptocurrencies are left at MT addresses.Gox

It is known that the trustee MT.Gox Nobuaki Kobayashi in early 2018, before the transition from bankruptcy proceedings to civil rehabilitation, managed to sell part of the assets in BTC and BCH. From April to May 2018, Kobayashi sold 24,658 BTC and 25,331 BCH totaling $ 406 million.

According to the CryptoGround service, which tracks MT wallet balance.GOX, the exchange accounts are a total of 137,891 BTC and 137 891 BCH, which at the rate for September 15, 2022 is more than $ 2.3 billion.

What compensation will MT clients receive.Gox

Accurate data on the payment of bitcoins to creditors in public documents do not give. However, in 2021, a representative of Coinlab announced that for each bitcoin stolen from MT users.GOX, they will be able to compensate them only 0.23 BTC.

After some time, special companies appeared that offers to redeem from creditors their requirements for the exchange. For example, at the end of 2019, the Fortress investment group sent MT to the creditors of the bankrupt exchange rate.GOX letter with a proposal for the redemption of their complaints for $ 5,000 for each bitcoin. The benefit of the offer was in the possibility of receiving payment, without waiting for the completion of a long trial.

In dollar terms, 0.23 BTC will cost about $ 4600 at a price of $ 20,000 per bitcoin at the rate on September 15, 2022. At the time of bankruptcy in 2014, the price of bitcoin was at $ 489. This means almost tenfold profit in dollar terms, despite the loss of more than three quarters of the assets in Bitcoin.

In the fall of 2021, a plan of reimbursement of money was published, which was approved by the court. However, while payments to former MT users.Gox never started.

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