Former Mt. Gox CEO's $5B Bitcoin Code Rewrite Shut Down

What to Know

79,956 BTC worth roughly $5 billion has sat untouched at a single address since the 2011 Mt. Gox theft
Mark Karpeles submitted a Bitcoin Core pull request proposing a hard fork to redirect the stolen coins to creditors
The proposal was shut down in approximately 17 hours after pushback from developers and creditors
Mt. Gox creditors themselves rejected the idea, arguing it would undermine Bitcoin's immutability principle

Former Mt. Gox CEO Mark Karpeles submitted a pull request to Bitcoin Core over the weekend proposing a hard fork that would redirect 79,956 BTC -- valued at roughly $5 billion -- from an address where the stolen coins have remained untouched since 2011. The proposal, submitted under his GitHub handle MagicalTux, was closed in approximately 17 hours after swift backlash from developers and creditors alike.

A Narrow Hard Fork Targeting One Address

The proposed change spanned fewer than 60 lines of code and involved a single consensus rule modification. It would have substituted one public key hash for another when validating transactions from the specific theft address, enabling the Mt. Gox trustee to access the coins and channel them into Japan's existing court-supervised rehabilitation process.

Karpeles set the activation height to infinity, a deliberate safeguard meaning nothing would change unless the Bitcoin community explicitly chose to activate the fork. He anticipated objections and addressed them directly within the proposal. The theft, he argued, was unambiguous. The coins had not moved in 15 years. A legal framework for distributing them already existed through the Japanese courts. And the scope was limited to a single address.

Why Did the Bitcoin Community Reject the Proposal?

The Bitcoin community shut down the proposal for both procedural and philosophical reasons. The pull request forum was auto-closed before meaningful discussion could take place, with developers pointing out that Karpeles should have raised the concept on the Bitcoin development mailing list first. Others suggested he formalize it as an official Bitcoin Improvement Proposal, known as a BIP, before bringing code changes to the repository.

Several commenters noted that the Bitcoin Core GitHub repository is not the appropriate venue for that kind of broad community debate. Platforms like bitcointalk, X, Bitcoin mailing lists, and Delving were all cited as more suitable forums for gauging community sentiment before proposing such a fundamental consensus change to the codebase.

Mt. Gox Creditors Chose Principle Over Payout

Perhaps the most striking opposition came from the very people the proposal was designed to benefit. Multiple Mt. Gox creditors stated publicly on X that they did not want Bitcoin's consensus rules rewritten on their behalf. For these affected creditors, the network's ironclad guarantee that private keys equal ownership carries far more weight than even the prospect of recovering billions in lost funds.

The concern extends beyond this individual case. Once Bitcoin redirects coins for any reason, the question shifts from whether the network can intervene to when it will do so again. Bitfinex victims, DeFi hack targets, and anyone who lost cryptocurrency to a documented exploit could invoke the precedent and seek identical treatment. That subjective boundary between one justified exception and a repeatable mechanism is precisely the type of gray area Bitcoin was engineered to eliminate.

I'm a creditor. Absolutely not. Would break a key pillar of Bitcoin.
— Mt. Gox creditor, posted on X

What This Means Going Forward

This episode is not without historical parallels in Bitcoin's past, though the distinctions are critical. Previous emergency interventions, including the 2010 value overflow bug and the 2013 chain split, addressed technical malfunctions that directly jeopardized the network's operational integrity. The Mt. Gox proposal was fundamentally different because the Bitcoin network was operating exactly as designed. Karpeles was effectively asking it to behave differently for one specific group of users, however sympathetic their long-standing case might be.

The pull request is now closed. Roughly $5 billion in bitcoin remains frozen at the same address it has occupied since 2011. And the creditors who stood to benefit most chose Bitcoin's foundational principle -- that code is law -- over reclaiming their funds. The outcome reinforces what many in the ecosystem consider a non-negotiable feature of Bitcoin: its resistance to discretionary intervention, no matter how compelling the case may be.