Reviving Mt. Gox And Repaying Victims’ Bitcoin – Part 1
Mt.Gox getting hacked was one of the major incidences in the crypto world. Here are the reasons behind it as well as the implications.
How Did Mt.Gox Get Hacked?
Attributed to the Lehman Brothers of blockchain: 850,000 Bitcoin disappeared as the cryptocurrency exchange Mt. Gox imploded in 2014 following a series of hacks. Following this, the industry’s reputation was cemented as frighteningly insecure as with the controversial crypto celebrity name Brock Pierce was trying to get the Mt. Gox flameout’s 24000 victims their money back building a new company from the ashes.
Speaking in this first interview about Gox rising, Pierce plans to reboot Mt. Gox brand challenging Coinbase and Binance for the title of top cryptocurrency exchange claiming there is around $ 630 million and 150,000 Bitcoin waiting in the Mt.Gox bankruptcy trust where he wanted to solve the legal and technical barriers getting those assets distributed to their rightful owners.
Finally, the consensus from many of the blockchain startup CEO s was that the plot is surely crazy as it also has the potential to right one of the biggest wrongs marring the history of Bitcoin.
The Fall Of Mt. Gox
This is where the story starts with Magic, the gathering. Launched in 2006 Mt. Gox was a place for players as the fantasy card game traded monsters and spells much before cryptocurrency came of age. The Magic was that the Gathering Online eXchange designed to safeguard huge quantities of Bitcoin from legions of hackers as the founder Jed McCaleb pivoted the site to do the same in 2010. While it was seeking the focus on other projects, he also gave 88 percent of the company to French software engineer Mark Karpeles keeping 12 percent. Eventually by 2013 the Tokyo based Mt. Gox had become the world’s leading cryptocurrency exchange whereby they handle 70 percent of all Bitcoin trades as the security breaches, technology problems and regulations were already plaguing the service.
Following this everything fell apart as in February 2014 Mt.Gox halted withdrawals dealing with what is called a bug in Bitcoin trapping assets in user accounts and later on it discovered that it had lost more than 700,000 bitcoins due to theft over the past few years as, by the end of the month, it had suspended all trading and finally filed for bankruptcy protection contributing to a 36 percent decline in the bitcoin’s price admitting 100,000 of its Bitcoin atop 750, 000 owned by customers had been stolen.
Now undergoing bankruptcy rehabilitation in Japan, Mt.Gox is overseen by the court-appointed trustee as well as veteran bankruptcy lawyer Nobuaki Kobayashi establishing a process compensating the 24,000 victims filing claims where there are now 137,892 Bitcoin, 162,106 Bitcoin cash, as also some other forked coins in Mt.Gox’s holdings along with $ 630million cash from the sale of 25 percent of Bitcoin that Kobayashi handled at a prescient price point above where it is today. Whereas five years later, the creditors are still not being paid back.
A Rescue Attempt
Trying to acquire Mt. Gox in 2013, Pierce, the child actor who was known from the Mighty Ducks previously helped start talent management as well as a streaming company called Digital Entertainment network wherein 2002 on accusations of sex crime surrounding the company’s parties led to an FBI investigation. Whereas Pierce wasn’t charged he paid roughly
$ 21,000 to cover a plaintiff’s legal fee in a civil suit, there is one of the company’s cofounders called Marc Collins-Rector convicted of child molestation and pornography. Whereas in 2014 Pierce told Reuters that the allegation against him is not true.
While the situation still haunts Pierce’s reputation making some in the industry apprehensive to be associated with him, he has eventually managed to break into the virtual currency business whereby setting up World Of Warcraft gold mining farms in China, claiming
to have eventually run the world’s largest exchanges for WOW Gold as also Second Life Linden Dollars.
Soon after Pierce became the central figure in the blockchain scene with cofounding Blockchain Capital eventually the EOS Alliance as well as a much-derided crypto utopia in Puerto Rico called Sol. Thanks to his eccentric Burning-Man influenced fashion, it made him easy to be the spot at the industry’s many conferences.
Rising in late 2012, the Bitcoin and Mt.Gox were being tried to be bought by Pierce whereas the biggest investor was Goldman Sachs was it was not a fan of him but buying the biggest Bitcoin exchange due to regulator issues, according to Pierce. He was also suspected the exchange was built on a shaky technical foundation leading him to stop pursuing the deal. He thought there was a big risk factor in Mt. Gox backend where the intuition was because his intuition was dead right.
Following the Mt.Gox imploded Pierce has thereby claimed his investment group Sunlot Holdings was successful in buying founder McCaleb’s 12 percent stake for 1 Bitcoin as though McCaleb stated, he didn’t receive the Bitcoin and thereby it’s not clear if the deal went through. Pierce claims he had a binding deal with Karpeles buying the other 88 percent of Mt.Gox as that Karpeles tried to pull out of the deal remaining legal limbo.