Mt. Gox Collapse: The Complete Timeline

1. 1

   Meet the exchange that was 'the market'

   At its peak, Mt. Gox handled over 70% of all Bitcoin trades worldwide. It wasn't just part of the market — for most of 2013, it effectively was the market, and its yen-quoted price was the price everyone else followed.

   

2. 2

   2007: a domain for trading trading cards

   Programmer Jed McCaleb bought mtgox.com — short for Magic: The Gathering Online Exchange — to trade digital trading cards. The card market never took off and the site was abandoned for other projects months later.

   

3. 3

   2010: repurposed for a currency nobody could trade

   When McCaleb discovered Bitcoin in 2010, there was almost no easy way to buy or sell it. He dusted off the dormant site and turned it into a Bitcoin exchange — perfectly timed, since Bitcoin was just migrating from forum trades to real markets.

   

4. 4

   2011: McCaleb sells to Mark Karpelès

   McCaleb sold the exchange to French developer Mark Karpelès in 2011. Under its new owner Mt. Gox grew rapidly into the dominant hub for global Bitcoin trading — while, as later investigations showed, its internal controls never caught up with its volume.

   

5. 5

   70% of all Bitcoin trading flows through one site

   By 2013 Mt. Gox was the reference market for Bitcoin. That concentration is what made the eventual failure so damaging: when the main place to buy and sell vanished, the whole young industry felt it.

   

1. 6

   A compromised auditor account crashes the price to $0.01

   In 2011 attackers obtained the credentials of a Mt. Gox auditor. From that account they placed massive sell orders that briefly crashed Bitcoin's price on Mt. Gox to one cent — chaos that let them buy Bitcoin from startled users for almost nothing.

   

2. 7

   Bitcoin at one cent — and anyone could buy

   For a few minutes the largest Bitcoin exchange in the world quoted a penny per coin. The flash crash became the template for what compromised exchange accounts could do to a thin, immature market.

   

3. 8

   About 2,000 BTC stolen from hot wallets

   Around the same time, weaknesses in Mt. Gox's wallet security let attackers steal roughly 2,000 BTC — only about $30,000 at 2011 prices, but a warning shot about how the exchange stored customer funds.

   

1. 9

   Withdrawals get slower and slower

   By early 2014 users complained about long withdrawal delays. Money was going in; coming out was another story. The exchange's public explanations stayed vague while the backlog grew.

   

2. 10

   February 7: all withdrawals halted

   Mt. Gox suddenly stopped all Bitcoin withdrawals, claiming "technical issues" in the Bitcoin software. The explanation it eventually pointed to — transaction malleability — is a real quirk of Bitcoin, but not one that requires losing customer funds.

   

3. 11

   'It was transaction malleability'

   Mt. Gox's official line was that the malleability bug — which lets a transaction's ID be tweaked without changing its content — explained the missing coins. Investigators later concluded the real losses had been siphoned off over years through compromised wallets.

   

4. 12

   Communication goes dark

   Through the crisis, explanations remained vague and no clear timeline was given. Mark Karpelès avoided direct responses, stepped down from the Bitcoin Foundation board, and the company wiped its Twitter presence. Confidence drained faster than the coins had.

   

5. 13

   February 24: trading suspended, site goes dark

   Less than three weeks after the halt, Mt. Gox suspended all trading and abruptly went offline. The next day a leaked crisis-strategy document surfaced, and the exchange filed for bankruptcy in Tokyo shortly after.

   

6. 14

   The bankruptcy announcement

   The filing marked the first major exchange collapse in crypto history. A Tokyo court would spend years untangling it, and the case became the reference point for every exchange failure that followed — FTX included.

   

1. 15

   A vault that should have been full

   The exchange admitted that 850,000 BTC had gone missing — 750,000 of them customer funds. At February 2014 prices that was roughly $450 million; at later cycles it became one of the largest lost fortunes in modern finance.

   

2. 16

   A BANKRUPTCY sign over the exchange

   Mt. Gox had been operating while effectively insolvent — investigations suggested that by mid-2013 it no longer held most of the Bitcoin it claimed to. Customers had been trading against IOUs for months without knowing it.

   

3. 17

   2015: Karpelès arrested

   French developer Mark Karpelès was arrested in Japan in 2015. He was convicted in 2019 of falsifying financial records — but cleared of embezzlement, a verdict that still divides the Bitcoin community.

   

4. 18

   200,000 BTC rediscovered in an old wallet

   Shortly after the bankruptcy filing, Mt. Gox announced it had found nearly 200,000 Bitcoin in an old-format wallet — reducing the loss and eventually seeding the repayment estate. Talk of reviving the exchange went nowhere; liquidation and rehabilitation moved forward instead.

   

5. 19

   A rehabilitation plan — and repayments a decade late

   A civil rehabilitation plan was approved in 2021, and creditors began receiving repayments in 2024 — more than ten years after the collapse, paid in Bitcoin rather than the 2014 yen value. Many waited through multiple postponements for what became a life-changing payout.

   

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