Mt. Gox Bitcoin Billions Finally Flow Back to Investors—The Decade-Long Saga Explained
After a decade of legal battles and market speculation, the crypto world's most notorious bankruptcy case reaches its climax.
The Fall of a Giant
Mt. Gox once handled over 70% of all Bitcoin transactions before collapsing in 2014, leaving billions in digital assets frozen.
Legal Labyrinth Unwound
Japanese courts navigated complex international regulations and creditor claims across 150 countries—proving traditional finance moves at blockchain speed, just backwards.
Market Impact Looms
Creditors finally receive their Bitcoin holdings as the repayment process activates, potentially unleashing billions into the current market.
Ten years later, victims get their crypto back—just in time for Wall Street to pretend they invented the whole concept.
What was Mt. Gox?
Mt. Gox was the world’s largest Bitcoin exchange at one point. Based in Tokyo, the company was estimated to account for 70% of Bitcoin trading volume in 2013. Mt. Gox CEO, Mark Karpeles, told Reuters in a now-deleted report that the exchange saw $5 million to $20 million in incoming transfers each day.
Launched in 2010, the site was originally an online marketplace to trade physical Magic: The Gathering playing cards; with Mt. Gox being a shortened version of “Magic: The Gathering Online Exchange.” Soon, the site added the ability to exchange cash for Bitcoin, moving away from trading cards for good.
Employees of the exchange had the option to be paid partially in Bitcoin, but Karpeles said that he stressed to not invest “more than you can afford.”
Bitcoin was extremely fresh at the time. It launched in 2009, but it wasn’t until 2010 that trading really began. Then in 2013, the cryptocurrency started the year valued at $13, climbing all the way to $1,100 by the end of the year. But with this rise to popularity for Bitcoin came regulatory nightmares for the world’s largest exchange.
How 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 transmitting business.” Due to this, $5 million of Mt. Gox funds were seized. Later in the year, the exchange’s partner CoinLab sued Mt. Gox due to it allegedly failing to fulfill the terms of their agreement.
In February 2014, the exchange disclosed that it had been the target of years' worth of hacks that had gone unnoticed. Malicious actors were able to edit the IDs of transactions due to a Bitcoin vulnerability called “transaction malleability,” which has since been addressed through the 2017 SegWit soft fork. The vulnerability let bad actors manipulate the exchange without it noticing, apparently for years, and swipe customer funds all the while.
As a result, 850,000 Bitcoin was lost—almost 7% of all Bitcoin that existed at the time. This was worth $475 million at the time, but at today’s rate this WOULD be worth over $97 billion.
While suffering the attack, the exchange went offline, causing Bitcoin’s price to dramatically drop. Investors grew angry and demanded answers. Karpeles then said that the exchange would “find a solution.”
Ultimately, that solution was to file for bankruptcy, citing liabilities of $64 million while only having $38 million in assets. The firm had 127,000 creditors in the bankruptcy, according to a Reuters report, only 1,000 of which were based in Japan.
The Japanese bankruptcy filing then stated that Mt. Gox owed creditors $63.5 million. But the company wasn’t even halfway to having that amount of money, as $5 million of its assets were held by CoinLab as part of its at the time ongoing case. An additional $5.5 million was being held by the U.S. Department of Homeland Security.
"We will make all efforts to ensure that crimes are punished and damages are recovered," Mt. Gox later said.
Creditor refunds explained
In 2023, the U.S. Department of Justice charged two Russian nationals with “conspiring to launder approximately 647,000 Bitcoin from their hack of Mt. Gox,” which happened in 2011. In this process, 140,000 Bitcoin was recovered—or about $16 billion worth at today’s price.
Now, over a decade after the exchange collapsed and following a number of deadline extensions, Mt. Gox creditors are due a refund. According to a June 2024 note, creditors were set to start receiving payments in Bitcoin and Bitcoin Cash.
“We have taken time to ensure SAFE and reliable repayment to creditors, including technical remedies for safe repayments, compliance with financial regulations in each country, and discussion of repayment arrangements with the cryptocurrency exchanges,” Mt. Gox Rehabilitation Trustee Nobuaki Kobayashi said in the note.
Following the note, Mt. Gox moved billions of dollars worth of Bitcoin between wallets as it prepared to execute refunds before the original October 31, 2024 deadline.
Mt. Gox began making repayments on July 5, 2024, according to a note from the rehabilitation trustees, while noting that the process would take time to confirm creditors’ details. “We ask eligible rehabilitation creditors to wait for a while,” the note reads.
However, it required the deadline to be extended as the 2024 deadline loomed. It was then pushed back to October 31, 2025. As that date approached, it has now been extended for a full year once again to the same date in 2026.
Rehabilitation trustee Nobuaki Kobayashi wrote in a notice that some of the creditors hadn’t received their repayments because they “have not completed the necessary procedures,” while others hit obstacles along the way.
At the time of writing, Arkham Intelligence data shows that Mt. Gox still holds 34,689 BTC, which is worth almost $4 billion at current prices.
Editor's note: This story was originally published on July 14, 2024 and last updated with new details on October 28, 2025.
