Mt. Gox was the world’s largest Bitcoin exchange from 2011 to 2014, handling over 70% of all Bitcoin transactions at its peak. Originally created by Jed McCaleb (who later founded Stellar) as a trading card exchange and repurposed for Bitcoin, Mt. Gox was acquired by Mark Karpelès, a French developer living in Tokyo, in 2011. Under Karpelès, the exchange grew rapidly but was plagued by technical problems, security incidents, and increasingly obvious signs that something was fundamentally wrong.
On February 7, 2014, Mt. Gox suspended all Bitcoin withdrawals. On February 24, the exchange went offline entirely. On February 28, Mt. Gox filed for bankruptcy protection in Tokyo, announcing that approximately 850,000 Bitcoin — worth $450 million at the time — had been stolen through a hack that had been ongoing since at least 2011. It was the largest theft in Bitcoin history and it destroyed trust in crypto exchanges for years.
The aftermath lasted a decade. Karpelès was arrested in Japan in 2015 and eventually convicted of data manipulation (though acquitted of embezzlement). Creditors waited years for any recovery. When Bitcoin’s price rose from $400 (at the time of collapse) to $60,000+, the remaining 142,000 recovered BTC became worth billions. The creditor repayment process, which finally began distributing Bitcoin in 2024, became one of the most closely watched events in crypto — analysts worried that creditors selling their recovered BTC would crash the market.
Mt. Gox’s legacy is permanent. “Not your keys, not your coins” became crypto’s most fundamental security mantra because of Mt. Gox. Every subsequent exchange security measure, proof-of-reserves audit, and self-custody advocacy traces back to the experience of hundreds of thousands of Mt. Gox users who lost everything. The exchange that once handled 70% of Bitcoin transactions became the reason an entire generation of crypto users refuses to leave their coins on exchanges.
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