Mt. Gox

Mt. Gox is the name of a Japan-based cryptocurrency exchange that was infamously hacked for 850,000 BTC worth roughly $450 million at the time in February of 2014.

During July 2010 Mt. Gox formally launched Mt. Gox launched its exchange and price quoting service.

It was subsequently sold to French developer Mark Karpelès in early 2011.

Prior to its hacking, Mt. Gox suffered from other security vulnerabilities as early as June 2011.

On 19 June, 2011, a security breach of the exchange caused the nominal price of a bitcoin to fraudulently drop on Mt. Gox itself, after a hacker allegedly used credentials from a Mt. Gox auditor's compromised computer to transfer a large number of bitcoins illegally to himself.

Additionally, in October 2011 over 2,600 BTC was sent to invalid addresses and effectively lost.

This exposed a weakness in the network protocol as a standard client would check for such an error and reject the transactions.

Mt. Gox Controversy and Collapse

In early 2014 Mt. Gox suspended trading, subsequently closing its website and exchange service, and filed for bankruptcy protection from creditors. Liquidation proceedings began shortly after.

During this time, the company had publicly announced that nearly 850,000 BTC belonging to customers and the company were missing and presumed stolen.

Since then, nearly 200,000 BTC have since been located, though the reasons for the disappearance were unclear.

The most likely scenario involves some combination of theft, fraud, or mismanagement.

New evidence presented in 2015 by Tokyo security company WizSec led them to conclude that "most or all of the missing bitcoins were stolen straight out of the Mt. Gox hot wallet over time, beginning in late 2011.”

At its peak, more than 70 percent of Bitcoin transactions took place on Mt. Gox. The hack was the largest in the history of cryptocurrency until the CoinCheck hack that took place near the beginning of 2018. More than 24,000 customers lost access to their money.

The BTC that the exchange lost represented over 6 percent of all of the Bitcoins in circulation at the time.

At the time the hack was had a seriously destabilizing effect on the price of Bitcoin and the overall sentiment around the Bitcoin network.