In overdue February 2014, Daniel was sitting at his computer, trading bitcoins on the Tokyo-based cryptocurrency exchange Mt. Gox. Suddenly, the website went white and stopped responding. Panicking, Daniel turned to the online forum Bitcoin Talk for answers, where speculation had already begun: Mt. Gox was in trouble.
Daniel, who lives in Europe, was a university student at the time. After making some money trading bitcoin on Mt. Gox, he put almost all of his wealth into the exchange. When Mt. Gox went down, Daniel says he went into “full crisis mode.” He needed the money to fund the rest of his time in school.
On February 28 of this year, Mt. Gox filed for bankruptcy. Hundreds of thousands of bitcoins — then worth about $400 million, now worth $45 billion — were stolen in complicated attackthe company said. It had virtually no remaining funds to process withdrawals.
So began a Kafkaesque ordeal for Mt. Gox customers, who have spent the past decade struggling through a tortuous and bureaucratic corporate reorganization process in hopes of recovering their lost bitcoins. WIRED spoke with eight former Mt. Gox customers, all but one of whom, like Daniel, requested the ability to go by pseudonyms to protect their financial privacy. Each told a similar story, one of confusion, repeated delays, and an infuriating lack of control.
“The first few weeks were the worst,” says Daniel, who became depressed and began drinking during that time. Although he later took out loans for college, Daniel resorted to credit card fraud to recover the stolen funds, telling himself that no harm would come to individual cardholders who were insured. After almost getting caught, he looked for steady work, but by that time, “I had basically given up on life,” Daniel says.
Ten years later, Mt. Gox customers are set to get their bitcoins back. On June 24, the trustee in charge of managing the estate, veteran bankruptcy lawyer Nobuaki Kobayashi, announced that cryptocurrency repayments will start appearing from July. On Friday, the coins started moving.
In a highly unusual turn of events, Mt. Gox customers may actually benefit financially from their involvement in the bankruptcy. Because only a constrained amount of bitcoins were recovered, customers will receive only about 15 percent of the bitcoins they held on the exchange. However, the hundred-fold enhance in price over that period means that the dollar value of the coins will far exceed the value of their original stack. In total, about Value $9 billion bitcoin will be returned. “I’ve seen the crypto universe rise, die, and rise again,” Daniel says. “I watch bitcoin charts every day.”
Mount Gox was started in 2010 by Jed McCaleb, an early bitcoin user from the United States. McCaleb sold the exchange in 2011 to Mark Karpeles, a juvenile French developer, under whose leadership it became the largest exchange in the world. In 2013 three quarters of global bitcoin transactions They were reported to be passing through Mount Gox.