This day in history: Feb 24, 2014, MTGOX gets into trouble

Maria Nikolova

Three years ago, MTGOX said some 750,000 bitcoins deposited by users and approximately 100,000 bitcoins belonging to it had disappeared.

Those who are interested in crypto currencies and Bitcoin, in particular, probably recall at least some of the events from late February 2014, when the biggest Bitcoin exchange – MTGOX, ran into trouble and halted its operations.

On February 24, 2014, MTGOX found out large discrepancies between the amount of cash held in financial institutions and the amount deposited by its users. MTGOX’s director back then – Mark Karpeles, said the amount was approximately JPY 2.8 billion. Initial reports claimed that some 750,000 bitcoins deposited by users and approximately 100,000 bitcoins belonging to MTGOX had disappeared.

Once MTGOX discovered that bitcoins had disappeared and the discrepancies between cash funds and deposit balances, the company judged that it would be difficult to continue its normal activities normally and closed its site at noon (local time) on February 25, 2014.

On February 28, 2014, MTGOX submitted an application for the start of a procedure of civil rehabilitation at the Tokyo District Court. The application was accepted on the same day. At the same time, the exchange was under several orders issued by the Court: a preservative order prohibiting it from paying its debts, transferring its assets or establishing security over its assets, an order establishing a comprehensive prohibition of forced attachment of its assets by its creditors and a supervisory order ordering supervision by a supervisory committee.

  • The latest report

The latest report into MTGOX’s fortunes was released at the seventh creditors’ meeting held on September 28, 2016.

The Bankruptcy Trustee – Nobuaki Kobayashi, announced that he had secured an account balance of JPY 1,054,483,013 as of September 27, 2016, a decrease of approximately JPY 10,200,000 from the time of the sixth creditors’ meeting.

The amount of BTC managed by the bankruptcy estate as of September 21, 2016 was 202,185.35450043BTC. The Bankruptcy Trustee said he was still investigating the existence of additional BTC held by MTGOX.

He said he was also investigating whether any BTC or money in other currencies that were possessed by or under the control of MTGOX disappeared, and the events leading to such disappearance. He is assisted in this work by Deloitte Touche Tohmatsu LLC (and its affiliates), ReEx Accounting Firm, and Payward.

Back then, Nobuaki Kobayashi noted that given the limited amount of information that exists, he believes it would be difficult to understand the full picture.

  • Robert Marie Mark Karpeles

The petition for the start of bankruptcy proceeding against Robert Marie Mark Karpeles, the representative director of MTGOX, was submitted with the court on October 23, 2015. As a result, the start of the bankruptcy proceeding against Karpeles was determined on November 10, 2015. Karpeles was prosecuted on September 11, 2015 on the charges of unauthorized creation and use of private electromagnetic records, as well as suspicion of corporate embezzlement. On top of that, he was subsequently prosecuted on November 18, 2015 on the same charges of unauthorized creation and use of private electromagnetic records and suspicion of corporate embezzlement. Karpeles was released on bail on July 14, 2016.

  • What’s next?

The eighth creditors’ meeting will be held on March 8, 2017.

Read this next

Digital Assets

BlockDAG Presale Raises $9.9M as Batch 5 Nears Sell-Out Amid Bonk’s Fluctuating Trading Volume & Spell’s Bullish Price

Explore BONK’s trading volume, SPELL’s market shifts, and why BlockDAG’s 10,000 ROI makes it an ideal crypto for savvy investors in 2024.

Digital Assets

Cathie Wood’s sponsored Bitcoin ETF sees historic $200 million inflows

The ARK 21Shares Bitcoin ETF (ARKB), co-sponsored by Cathie Wood’s ARK Invest, registered historic inflows exceeding $200 million on Wednesday, signaling a robust appetite among investors for Bitcoin-centric investments.

Digital Assets

Sam Bankman-Fried might see his 25-year sentence halved

Sam Bankman-Fried, the founder of the failed cryptocurrency exchange FTX, was sentenced to 25 years in federal prison by a Manhattan court on Thursday. This comes after he was convicted of defrauding customers and investors, with Judge Lewis Kaplan highlighting the potential future risks posed by Bankman-Fried.

Technical Analysis

EURJPY Technical Analysis Report 28 March, 2024

EURJPY currency pair under the bearish pressure after the pair reversed down from the major resistance level 164.25, which also stopped the sharp weekly uptrend at the end of last year,

Digital Assets

BlockDAG’s Presale Hits $9.9M, MultiversX & MINA Price Predictions Show Green

Read about BlockDAG’s promising $10 prediction and insights on MultiversX Price Prediction as MINA’s potential unfolds.

Digital Assets

Rockstar Co-Founder and All-star Line Up Join Advisory Board to Take Metacade into Post Beta Orbit

Metacade, the revolutionary Web3 gaming platform, prepares to streak out of beta with a slew of ground-breaking initiatives that will redefine the way blockchain games are developed.

Retail FX

Prop firm The Funded Trader shuts down, claims relaunch in April

Prop trading firm The Funded Trader has ceased all operations, with claims for a relaunch in the near future.

Digital Assets

Ethereum-Based Tokenized Real Estate Platform USP Launches On Republic

How This Californian Startup Is Revolutionizing Real Estate Investment through Ethereum-Based Tokenization.

Digital Assets

Sui Spikes in Weekly DEX Volume, Joins Top 10 of All Blockchains

March DEX volume on Sui stands at over $2.88B – up more than 49% from February – with decentralized exchange Cetus and wholesale liquidity layer DeepBook leading.

<