Mt. Gox Bankruptcy Case May See Resolution with Proposed Bitcoin Hard Fork
- Former Mt. Gox CEO Mark Karpeles has proposed a Bitcoin hard fork to recover 80,000 BTC stolen from the exchange over a decade ago.
- The hard fork would see the BTC, worth $5 billion and currently held by a single wallet, moved to a new address without the requirement of the original private key.
Mark Karpeles, the former owner and CEO of defunct crypto exchange Mt. Gox, has proposed a Bitcoin hard fork that would allow him to recover nearly 80,000 BTC stolen from the exchange a decade ago. Karpeles submitted a pull request to the Bitcoin GitHub repository to add a consensus rule allowing unspent outputs linked to address 1Feex…sb6uF, to be spent using a signature from the exchange’s recovery address. The funds would then be returned to the Mt. Gox creditors through the ongoing bankruptcy court process. Mt. Gox was once the world’s most dominant Bitcoin exchange, handling up to 70% of all BTC trades globally at its peak. In early 2014, it halted withdrawals and later revealed that hackers had stolen 850,000 BTC, worth $450 million at the time ($55 billion by current prices). The 79,957 coins held on the identified address is part of this stash. The proposal seeks to amend one of Bitcoin’s founding principles: a transaction can’t be reversed retroactively. While making the case for why this one-time exception should be granted, Karpeles noted that Mt. Gox has been confirmed by blockchain analysts and legal authorities as an “unambiguous theft,” and there’s no dispute over how the coins were accessed. These coins have also been sitting idle in an account for nearly 15 years, “meaning these coins are effectively burned — contributing nothing to Bitcoin’s economy while representing a significant loss to creditors,” he added. Since the exchange is already in a court process, the legal infrastructure to handle the coins if they are recovered already exists, he goes on. He also sought to reassure the community that his proposal only extends to one transaction, and that it can’t be extended to other addresses without a separate consensus change. Karpeles’ Proposal Faces Community Pushback While the proposal would have contributed a much needed $5.2 billion to the Mt. Gox kitty, which has been reported to hold up to 35,000 BTC, the Bitcoin community has withheld support. Karpeles himself acknowledges the arguments against it, the first being that it sets a precedent that BTC’s immutability is not set in stone. “If it can be done once, the argument goes, it can be done again,” he notes. Even if the community overlooked this, there’s the question of who exactly can decide what the deserving cases for breach of immutability are. Many centralized exchanges, like Bitfinex, and hundreds of decentralized platforms have been hacked and lost billions collectively. They would also argue that they deserve the exception. More broadly, if the Bitcoin network shows that victims of theft can easily be bailed out, there will be little incentive for platforms to invest heavily in security platforms. While the community debated the merits of the proposal, renowned developer Jameson Lopp noted that it was a nonstarter in the first place, as it had not been submitted through the proper channels.
This is a protocol level change so it needs to be a BIP before it’s a pull request to change code in implementations. 😉
— Jameson Lopp (@lopp) February 27, 2026
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