On February 28, 2014, Mt. Gox — once the world’s largest Bitcoin exchange, handling approximately 70% of all Bitcoin transactions at its peak — filed for bankruptcy protection in Tokyo District Court.
Timeline:
- February 7, 2014: Mt. Gox halted all Bitcoin withdrawals
- February 24, 2014: The website went blank and trading was suspended
- February 28, 2014: Bankruptcy filing in Tokyo; CEO Mark Karpeles held a press conference
At the press conference, Karpeles revealed that approximately 850,000 BTC had been lost — 750,000 BTC belonging to customers and 100,000 BTC belonging to the company — worth approximately $450 million at the time. On March 20, 2014, Mt. Gox reported finding 199,999.99 BTC in an old wallet, reducing the total loss to approximately 650,000 BTC.
The collapse was attributed to a long-running theft exploiting transaction malleability, though subsequent investigations revealed a more complex picture involving possible internal mismanagement.
Media declared Bitcoin dead: “Bitcoin is finished.” “It was a scam all along.” Bitcoin’s price crashed. But the protocol itself was unaffected — Mt. Gox was a centralized exchange, not a flaw in Bitcoin’s decentralized network. The distinction between Bitcoin the protocol and centralized services built on top of it became a crucial lesson for the ecosystem.
[Mt. Gox began repaying creditors in Bitcoin in July 2024, over a decade after the collapse.]