MT.GOX logo of exchange on the screen smartphone

Mt. Gox gives former customers a token of appreciation (but still no money)

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Long-suffering customers of defunct Bitcoin exchange Mt. Gox will finally have something to show for their tribulations—in NFT form. In perhaps the most Bitcoin-weird announcement so far this year, former CEO Mark Karpeles said a “commemorative NFT” would be available to anyone who could prove they were a Mt. Gox customer before it went out of business in 2014.

Tokyo-based Mt. Gox was one of the first (and for a while the world’s most popular) Bitcoin trading exchange. Karpeles was one of the industry’s biggest celebrities when BTC first began to gain mainstream media attention in 2013. However, it all went sour in February 2014 when the exchange suspended all withdrawals and eventually shut down the business, leaving patrons millions (now possibly billions) of dollars out of pocket and facing a lengthy claims process that remains unresolved to this day.

Karpeles, equally famous under his online pseudonym “MagicalTux,” announced the NFT would be available for an airdrop to anyone who can provide verifiable details of their Mt. Gox account.

Karpeles noted the “MtGox NFT” would not include any artwork, and holders could expect nothing more than a digital status symbol that “may have value or not in the future, but today you can get it for free because of who you are.”

The MtGox NFT website invites former customers to register their interest in the token. Participation is entirely independent of the formal claims process, which closed to new applications in 2018. However, even those who “sold” their formal claims to third parties may still receive a token simply because they held a Gox account.

“Owning a Mt. Gox NFT proves you’re OG. You were there in the early days of Bitcoin, and now you can prove it on the blockchain,” the announcement said.

The Mt. Gox NFT will be an ERC-721 standard token on the Polygon blockchain. The website also suggests the token could be used for membership of a DAO structure “based on NFT ownership and other parameters, allowing privileged access for Mt. Gox users.”

Mt. Gox customers these days are long past bitterness and cynicism, and many reacted to the NFT announcement with jaded humor. Litecoin creator Charlie Lee asked when Mt. Gox would be listing LT—a retro reference to the most common question asked of Gox when it was still in business. Even if you can’t receive a token, you can claim some Bitcoin OG status simply by understanding the jokes.

Are they giving out more personal details?

By now, Mt. Gox account holders should be well familiar with the process of registering with yet another new website, verifying and viewing their account status, and receiving very little of any value for their time and effort. Unlike the bankruptcy/civil rehabilitation procedures, though, they will at least receive something blockchain-verifiable this time—even if it’s not Bitcoin.

They’re likely not concerned about potential privacy breaches either, given the full Mt. Gox customer database of names and account balances was leaked to the public in the years following the exchange’s closure. Additionally, the full name, address, and balance details for every creditor are available to any other creditor who requests the information. 

Japanese police hold the only complete account records for Mt. Gox. Still, many of those details have also been leaked at some point, allowing blockchain investigators insight into what might’ve happened. 

What is or was Mt Gox?

In 2022, many people deeply involved in the Bitcoin and blockchain industry have never even heard of Mt. Gox. But once upon a time, it was Bitcoin’s biggest story.

Both Mt. Gox’s and Karpeles’ names are enshrined forever in Bitcoin’s hall of infamy. At some point in Gox’s history, thieves or insiders drained anywhere from 600,000 to 850,000 BTC from the exchange’s wallets. There are various theories and wild stories regarding what actually happened, but most details remain unknown to the public.

Karpeles and the Japanese bankruptcy trustee managed to scrape together around 150,000 bitcoins, which were due to be divided among creditors, including customers (full disclosure: the author of this article is a minor creditor in the case). Rehabilitation proceedings have changed hands and been stymied on numerous occasions ever since, largely due to unresolved lawsuits against Mt. Gox originating in the United States. from former business partner CoinLab and disgruntled customers.

Karpeles remains a much-followed identity in the Bitcoin social media world. He is something of a Bitcoin antihero, and opinions of him and his business acumen depend heavily on when, how, and if a person has encountered him over the years. 

He has been accused of everything from being merely naive and more interested in baking quiche than managing a Bitcoin company to stealing Mt. Gox’s bitcoins and even being the “real” Dread Pirate Roberts of Silk Road infamy. He has categorically denied the theft and Silk Road claims, and has not been formally charged in relation to either.

He was arrested in 2015 and spent a year in Japanese prison without trial on suspicion of data manipulation and embezzlement. In 2019 a Tokyo court found him guilty of the data charge (for falsifying records to make Mt. Gox’s holdings appear much larger than they were). He was acquitted of embezzlement and aggravated breach of trust. The court sentenced Karpeles to 30 months in prison but suspended it for four years.

If nothing else, Mt. Gox is impressive in Bitcoin lore for its ability to frequently rise from the dead and still grab headlines, even eight years after its closure. Many other Bitcoin businesses have fallen by the wayside in that time, their names never to be heard again. Gox’s name instead prompts wistful and nostalgic sighs and knowing glances of camaraderie between those “who were there.” Now they’ll have an NFT literally as a token of their experience, as well.

Follow CoinGeek’s Crypto Crime Cartel series, which delves into the stream of groups—a from BitMEX to BinanceBitcoin.comBlockstreamShapeShiftCoinbaseRippleEthereum
FTX and Tether—who have co-opted the digital asset revolution and turned the industry into a minefield for naïve (and even experienced) players in the market.

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