The Mt. Gox incident is one of the most famous hacking incidents in the history of Bitcoin, which occurred in 2014. Mt. Gox was one of the largest Bitcoin exchanges in the world at the time, headquartered in Tokyo, Japan. The following is the detailed background, process and impact of the incident:
### Background
Mt. Gox (Magic: The Gathering Online Exchange) was originally a trading platform for trading Magic: The Gathering cards, and later transformed into a Bitcoin exchange. By 2013, Mt. Gox processed more than 70% of the world's Bitcoin transactions, becoming one of the world's largest Bitcoin trading platforms.
### process
1. Hacker Attacks:
- In February 2014, Mt. Gox suddenly suspended all Bitcoin withdrawals, claiming to have discovered a technical vulnerability.
- Subsequently, Mt. Gox announced that 850,000 bitcoins (worth about $450 million at the time) had been stolen from its platform, accounting for about 7% of the total amount of bitcoins in circulation at the time.
2. Bankruptcy of the Company:
- On February 28, 2014, Mt. Gox filed for bankruptcy protection with the Tokyo District Court, stating that its liabilities exceeded its assets.
- On April 16, 2014, Mt. Gox officially entered bankruptcy proceedings.
3. Investigation and Legal Proceedings:
- Japanese police and international law enforcement agencies begin investigating the incident.
- Mt. Gox CEO Mark Karpeles was arrested and charged with multiple crimes, including embezzlement and data tampering.
### Impact of the incident
1. Bitcoin Market:
- The incident caused a sharp drop in the price of Bitcoin, from about $800 before the incident to below $400.
- Investor confidence in the Bitcoin market has been severely damaged.
2. Strengthened supervision:
- The incident prompted governments and financial regulators around the world to begin paying attention to and strengthening supervision of cryptocurrency transactions.
- Major exchanges have begun to strengthen security measures to prevent similar incidents from happening again.
3. Investor Protection:
- Many investors suffered huge financial losses in the incident, and some investors sought compensation through legal means.
- The incident prompted the industry to discuss and implement stricter investor protection measures.
### Subsequent Development
- In 2015, Mt. Gox announced the recovery of 200,000 of its bitcoins, which were stored in a cold wallet.
- In 2021, a Japanese court approved Mt. Gox's compensation plan, according to which victims will be compensated.
The Mentougou incident is not only an important event in the history of Bitcoin, but also an important lesson for the entire cryptocurrency industry. It reminds us that we must attach great importance to security and risk management when trading and investing in cryptocurrency.
