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Gox was a bitcoin exchange based in Shibuya, Tokyo, Japan.

Launched in 2010, it was handling over 70% of all bitcoin transactions worldwide by early 2014, when it abruptly ceased operations amid revelations of its involvement in the loss/theft of hundreds of thousands of bitcoin, then worth hundreds of millions in US dollars. Gox suspended trading, closed its website and exchange service, and filed for bankruptcy protection from creditors. In April 2014, the company began liquidation proceedings. Although 200,000 bitcoins have since been "found", the reasons for the disappearance—theft, fraud, mismanagement, or a combination of these—were initially unclear. New evidence presented in April 2015 by Tokyo security company WizSec led them to conclude that "most or all of the missing bitcoins were stolen straight out of the Mt. Gox hot cryptocurrency wallet over time, beginning in late 2011." Gox and the subsequent arrest and conviction of former CEO Mark Karpelès led Japan to create the first formal regulations for cryptocurrency exchanges and virtual currencies.

In late 2006, programmer Jed McCaleb thought of building a website for users of the Magic: The Gathering Online tradable card game service, to let them trade "Magic: The Gathering Online" cards like stocks. In January 2007, he purchased the domain name mtgox.com, short for "Magic: The Gathering Online eXchange". In July 2010, McCaleb read about bitcoin on Slashdot, and decided that the bitcoin community needed an exchange for trading bitcoin and regular currencies. Gox launched its exchange and price quoting service deploying it on the spare mtgox.com domain name. Gox reported that Bitcoins had been stolen from their accounts. Gox exchange, after a hacker allegedly used credentials from a Mt. Gox auditor's compromised computer to transfer a large number of bitcoins illegally to himself. On 22 February 2013, following the introduction of new anti-money laundering requirements by e-commerce/online payment system company Dwolla, some Dwolla accounts became temporarily restricted. Gox to those accounts were cancelled by Dwolla. Gox help desk issued the following comment: "Please be advised that you are actually not allowed to cancel any withdrawals received from Mt. Gox as we have never had this case before and we are working with Dwolla to locate your returned funds." The funds were finally returned on 3 May, nearly three months later, with a note: "Please be advised never to cancel any Dwolla withdrawals from us again". By April 2013 and into 2014 the site had grown to the point where it was handling over 70% of the world's bitcoin trades, as the largest bitcoin intermediary and the world's leading bitcoin exchange. Gox suspended trading from 11 to 12 April for a "market cooldown". Gox traded 150,000 bitcoins per day, per Bitcoin Charts. Gox suspended withdrawals in US dollars on 20 June 2013. Gox from then on to close its account. Gox announced that it had "fully resumed" withdrawals, but as of 5 September 2013, few US dollar withdrawals had been successfully completed. Gox announced that it incurred "significant losses" due to crediting deposits which had not fully cleared, and that new deposits would no longer be credited until the funds transfer was fully completed.

Gox CEO Mark Karpelès resigned from the board of the Bitcoin Foundation. Gox reported on its website that a "decision was taken to close all transactions for the time being", citing "recent news reports and the potential repercussions on Mt Gox's operations". Gox problems, the value of bitcoin declined by 36%.

Gox released a statement saying, "The company believes there is a high possibility that the bitcoins were stolen," blamed hackers, and began a search for the missing bitcoins. Gox filed for bankruptcy protection in the US, to halt U.S. legal action temporarily by traders who alleged the bitcoin exchange operation was a fraud. Gox reported on its website that it found 199999.99 bitcoins—worth around $116 million—in an old digital wallet used prior to June 2011.

Quick Facts

• Gox suspended trading, closed its website and exchange service, and filed for bankruptcy protection from creditors.
• Gox hot cryptocurrency wallet over time, beginning in late 2011."
• Gox and the subsequent arrest and conviction of former CEO Mark Karpelès led Japan to create the first formal regulations for cryptocurrency exchanges and virtual currencies.
• New evidence presented in April 2015 by Tokyo security company WizSec led them to conclude that "most or all of the missing bitcoins were stolen straight out of the Mt.
• Gox reported that Bitcoins had been stolen from their accounts.

Source material: Wikipedia - "Mt. Gox". Adapted and summarized for DiscoverScroll. Original contributors are credited through the linked Wikipedia article. Read original on Wikipedia. CC BY-SA 4.0. Changes were made from the original.