Mt. Gox starts paying creditors, 10 years after collapse

First crypto exchange also became crypto's first scandal

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Mark Karpeles, Mt Gox

Crypto exchange Mt. Gox, which collapsed in 2014, has begun paying off creditors.

The first batch of bitcoins, worth $9.4 billion, is not yet available to the open market, so there is no immediate selling pressure. The final repayment to creditors, due 31 October 2024, may affect the market, however.

The bitcoin heist of the century, that’s what the hack of trading exchange Mt Gox was called a decade ago. The bankruptcy will finally be completed this year with the two largest creditors being paid in bitcoin. Fears of price erosion due to the dumping of bitcoins remain. Part of the digital currency’s value is linked to the limited quantity of coins the market can produce.

Mt. Gox was one of the first crypto exchanges, founded in 2010, barely two years after Bitcoin was introduced. At its peak, Mt. Gox processed more than 70% of bitcoin transactions worldwide.

However, it also became one of the first crypto scandals. In 2014, the exchange was hit by a massive hack that ultimately lost 850,000 BTC with no comeback for users. Initially, the damage was estimated at $450 million to $500 million.

There were several indications at the time that CEO Mark Karpeles had neglected his responsibilities and was more interested in side projects like setting up a bitcoin cafe.

Karpeles was arrested in Japan in 2015 on suspicion of siphoning off hundreds of millions of dollars in virtual currency. In 2019, the Tokyo District Court found Karpeles guilty of falsifying data, However, the court acquitted the Frenchman of a number of other charges, including embezzlement, on the belief that Karpeles had acted without malice.

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