Mark Karpeles, former director of Mt. Gox is calling for public support in its bid to restore the more than $5.2 billion stolen from its bitcoin exchange more than a decade ago.
On Friday, Karpeles submitted a proposal on GitHub to add a consensus rule that would allow 79,956 bitcoins from Mt.
“These coins have not been floated for over 15 years. They are among the most popular and publicized UTXOs in Bitcoin history,” he wrote.
Karpeles said that with the management of Mt. Gox Nobuaki Kobayashi already oversees the distribution to creditors, if the coins are recovered, the existing legal and logistical framework will distribute them to their rightful owners.
“I want to be upfront: this is a solid piece. It validates a previously invalid transaction. All nodes must be updated before the activation height. I’m not trying to hide this fact or disguise it as something else,” he said.
However, Karpeles said the proposal is not intended to bypass Bitcoin’s development process; instead, it was an attempt to start a discussion with the Bitcoin community.
“MtGox’s CEO declined to pursue a chain reset, citing uncertainty as to whether such a consensus change would ever be adopted,” he said.
“This creates a deadlock: the trustee cannot act without certainty, and the public cannot evaluate an idea without a concrete proposal. This patch breaks that deadlock by providing something concrete for discussion.”
Critics say Bitcoin’s immutability is at risk
Karpeles’ proposal has seen fierce opposition on the online forum Bitcointalk, with many arguing that it would set a bad precedent for Bitcoin, a decentralized cryptocurrency that is irreversible and immutable.
“Every time a hacking incident (occurs), someone demands a new consensus rule to recover the stolen funds. This completely destroys the concept of bitcoin,” wrote “coupable”, a member of the forum since 2015.
“Bitcoin should be independent of what law enforcement agencies in all jurisdictions decide,” said another forum member called “PrivacyG.”
Karpeles also acknowledged that this would be the strongest argument against the proposal, but argued that the specific case is sufficiently different because there is both law enforcement and public consensus that the address in question is the stolen bitcoin from Mt. Gox has.
Some who claim that the bankruptcy of Mt. Gox were affected by this proposal.
“If those coins ever move by any mechanism, I want my share of them back,” Samson said.
“I’m a creditor and they paid what was left of my bitcoin from the bankruptcy – I got about 15% back … I’m in favor of getting a court order to claim these coins.”
A Brief Summary of the Mt Gox Collapse
Mt. Gox was once the largest Bitcoin exchange operating from 2010 to 2014, handling 70% of all Bitcoin transactions worldwide.
However, its global presence has made it a honeypot for hackers, who in 2011 discovered a vulnerability in the security systems of Mt. Gox was used to transfer thousands of bitcoins, while other operational errors caused thousands of bitcoins to be “lost”.
On February 24, 2014, a leaked document claimed the company was bankrupt after losing 744,408 bitcoins in a theft that went undetected for years.
The exchange filed for bankruptcy protection in Tokyo on February 28, 2014, and reported liabilities of about $65 million after losing 750,000 of its customers’ bitcoins and 100,000 of its own, worth nearly half a billion dollars at the time.
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