Defunct Bitcoin exchange Mt. Gox began repaying creditors two years ago, more than a decade after the company went bankrupt. But on Monday, the deadline to complete the return of billions of dollars worth of Bitcoin postponed for a whole year Until October 31, 2026.
About 19,500 creditors have been repaid so far, but many others are still waiting to get back the money they lost in 2014.
With the first repayment in 2024; plummetingas the refunded Bitcoins were quickly sold off by the many creditors who had patiently watched the price of Bitcoin skyrocket over the past decade. As such, other market participants may welcome the delay and it may typically be seen as a bearish event.
But 10 years is a long time, and many crypto users who have entered the industry in recent years may not know the infamous story of Mt. Gox. How did it go bust and how will Bitcoin refunds be handled? Here's what you need to know.
What was Mount Gox?
Mt Gox was the largest in the world Bitcoin exchange At some point. The Tokyo-based company is estimated to have accounted for 70% of Bitcoin trading volume in 2013. Mark Karpeles, CEO of Mt.Gox, said: Reuters Report now deleted The exchange reportedly sent between $5 million and $20 million every day.
Launched in 2010, the site was originally an online marketplace for trading physical Magic: The Gathering playing cards. Mt. Gox is an abbreviated version of Magic: The Gathering Online Exchange. Soon, the site added the ability to exchange cash for Bitcoin and moved away from trading cards for good.
The exchange's employees also had the option of paying a portion of their salaries in Bitcoin, but Karpeles said he emphasized not investing “more than you can afford.”
At the time, Bitcoin was very new. Although it was founded in 2009, it actually started trading only in 2010. And in 2013, the value of the cryptocurrency started at $13 and rose to an all-time high. $1,100 by the end of the year. However, due to this growing popularity, Bitcoin The world's largest exchange faces a regulatory nightmare.
Why did Mt.Gox go bankrupt?
By the summer of 2013, Mt. Gox was accused by the U.S. Department of Homeland Security of failing to register as a “money transfer operator.” This resulted in $5 million Mt. Gox's funds were seized. Later this year, exchange partners will coin lab The company filed a lawsuit alleging that Mt.Gox had not fulfilled the terms of the agreement.
In February 2014, the exchange revealed that it had been the target of a hack that had gone unnoticed for years. malicious actor I was able to edit the transaction ID. Bitcoin vulnerabilities This is called “trade malleability” and has been addressed ever since until 2017. SegWit soft fork. This vulnerability allowed malicious actors to manipulate the exchange without realizing it, possibly for years, and continue to steal customer funds all the while.
As a result, nearly 850,000 Bitcoins were lost. 7% of all Bitcoin that existed at the time. this was worth it $475 million At today's rates, as it was then, this would be worth more than $97 billion.
Despite being attacked, Exchange went offline, cause bitcoin price to drop dramatically. Investors were furious and demanded answers. Afterwards, Karpeles said the deal would “find a solution.”
The final solution was to file for bankruptcy, but He said he had only $38 million in assets and $64 million in debt. According to one source, the company had 127,000 creditors in bankruptcy. Reuters reportOnly 1,000 of them were based in Japan.
Later, a Japanese bankruptcy filing stated that Mt.Gox owed creditors $63.5 million. However, the company held less than half of its funds, as $5 million of its assets were held by CoinLab as part of an ongoing lawsuit at the time. An additional $5.5 million was held by the U.S. Department of Homeland Security.
Mt Gox later said: “Every effort will be made to ensure that the crime is punished and the damage is repaired.” said.
Explaining refunds to creditors
In 2023, the U.S. Department of Justice indicted two Russians for “conspiring to launder approximately 647,000 Bitcoins from the 2011 hack of Mt. Gox.” In the process, 140,000 Bitcoins, or the equivalent of about $16 billion at current prices, were recovered.
Now, more than a decade after the exchange's collapse, Mt. Gox's creditors are still obligated to repay the money after multiple deadline extensions. According to the June 2024 memo, creditors were scheduled to begin receiving payments in Bitcoin and Bitcoin Cash.
“We have worked over time to ensure safe and reliable repayments to our creditors, including providing technical remedies for safe repayments, complying with each country's financial regulations, and negotiating repayment arrangements with virtual currency exchanges,” Nobuaki Kobayashi, Mt.Gox Rehabilitation Trustee, said in a memo.
In response to the memo, Mt.Gox moved billions of dollars worth of Bitcoin between wallets in preparation for issuing refunds by the original deadline of October 31, 2024.
Mt Gox started making repayments on July 5, 2024, according to the rehabilitation trustee's memo, but noted that the process would take time to confirm creditor details. “We ask all eligible rehabilitation creditors for their patience for a while,'' the statement reads.
However, with the 2024 deadline approaching, it was necessary to extend the deadline. It was then postponed until October 31, 2025. As that date neared, it was extended again by a full year, this time to the same date in 2026.
Rehabilitation Trustee Nobuaki Kobayashi wrote: news Some creditors have not received repayments because they “have not completed the necessary procedures,” while others have encountered obstacles along the way.
At the time of writing, arkham intelligence According to the data, Mt.Gox still holds 34,689 BTC, which is worth almost $4 billion at current prices.
Editor's note: This article was originally published on July 14, 2024 and was last updated with new details on October 28, 2025.
