In 2014, Bitcoin was put to an extremely severe test throughout its history following Mt. Gox’s loss of up to 800,000 Bitcoins which the hackers took away with them, and numerous investors were left bemoaning their fates.
A gigantic domain of its period: Mt. Gox
The name of the domain, Mt. Gox, was originally possessed by a person called Jed McCaleb, and it was designed for a platform specified to trade cards from ‘Magic: The-Gathering-Online’ (a fantasy game). However, the platform’s ownership was transferred to Mark Karpeles, and it was converted into an exchange of Bitcoin. In a short time, the exchange progressed to such an extent that it turned out to be the largest across the globe and, during its crowning phase, carried out more than 70% of the entire BTC transactions. Nonetheless, great power brings great responsibility with it. Shortly, many lawsuits were faced by the company for security infringement, due to which it lost huge funds.
Notwithstanding the series of hacks, the consumers could not get prepared for the maximum attack of 2014, which consequently led the firm towards bankruptcy. An overwhelming amount of 744,408 Bitcoin was robbed from the hot wallets of the exchange, and then Mark Karpeles resigned from The-Board-of-The-Bitcoin-Foundation. All the trading with Bitcoin was adjourned by Mt. Gox, resulting in a surprisingly low percentage of BTC at 35% during the following weeks.
The aftermath of Mt. Gox
Bitcoin’s worth was nearly $400 million at that time, making the hack the biggest money heist. An immediate filing for bankruptcy was submitted by the firm to quit the legal conflicts. As a revival of fortune, approximately up to 200,000 BTC were discovered by the company in an inactive wallet which relieved it. However, Mark Karpeles got arrested in 2017 for the charges of embezzlement and data manipulation leading him to jail. Moreover, with the progress in the investigation, a connection between him and Alexander Vinnik (being involved in laundering the pickpocketed Bitcoins) was formed by the FBI.
The ‘crypto hacks’ are a troublesome trend across the space of cryptocurrency. A solution to this issue may be provided by returning to the earliest major hack. The hack of Mt. Gox was a clear instance indicating that prominent exchanges can be victimized without taking adequate measures. This hack was the biggest, and it left ineradicable effects on crypto enthusiasts’ minds.