The Ghost of Mt. Gox: Introduction

"This shit is convoluted as fuck"

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Introduction

This is part of hopefully of a 12 part series I've decided to do on the issues of centralized exchanges in the crypto space. Primarily focused on the issues of liquidity, transparency and of course a large amount of dubious speculation around conspiracies.

The title " The Ghost of Mt. Gox" comes from a comment from a person who unfortunately deleted their account. For those that don't know Mt. Gox (Magic The Gathering Online Exchange) was at one point the biggest BTC exchange in the world. Handling nearly 70%+ of all BTC trades. It was founded in Jed McCaleb who was one of the first ~2000 people in the world to start actively start talking and using BTC. Legend has it that McCaleb didn't know how to purchase BTC so he repurposed a Magic The Gathering card trading site he had built to facilitate the purchase. The truth is probably less entertaining but I like the idea that a multi trillion dollar asset started its first exchange because a bunch of nerds wanted to change their Magic Cards for Magic internet money

However McCaleb didn't stay at Mt. Gox for Long. He eventually sold the exchange to a man who would go on to lose 850,000 BTC ( $42,5 Billion currently); Mark Karpeles! McCaleb leaving to eventually create XRP and XLM.

Mark is a special man. From the time he attempted to make a bot to trade against his customers but ended up losing money. To renting the most expensive offices he could find in Japan while a hacker siphoned thousands of BTC from the Mt. Gox account. A running joke in some crypto circles is that Mt. Gox was run on cracked screen laptop with a faulty power supply. I'm in the belief that even if Mt. Gox was run on quantum computer, Mark would have found some way to fuck it up. Actually I'm in the belief that Mark's actions or lack of action in handling the Mt. Gox crisis lead to the myth of the 4 year cycle

For you see it was the hack and the subsequent collapse of Mt. Gox that assured in the end of the first BTC bull run. If the farce of Mt. Gox hadn't occurred BTC may have continued its run with out pause. However we entered a bear market and the 2017/18 run while different ended in the same tragedy of greed and hubris. A -85% crash that nearly 90% of the crypto industry never recovered from. However BTC and others such as ETH and ADA where rebirthed like phoenixes powered by both the Federal Reserve's and Tether's fiery printing. With 38% of all USD printed in 2020/21 and nearly 94.57% USDT in existence printed in 2020/21. Hopefully this time will be different

The ghost of Mark's actions or if you like negligence; linger on with us not only through the scars left by the hack. But through the path he opened. A path that is littered with shell companies, insolvency, greed, corruption, fraud and most importantly a fuck tone of money

Because while Mt.Gox collapsed and Mark suffered years of investigation. He may actually become a one of the richest people alive. A billionaire! However that is dependent on if the Mt. Gox coins are ever found and settlements to customers. He will join the ranks of the man who sold him Mt. Gox, McCaleb who became the 40th richest man on earth in 2020. In fact many of the people involved in Mt. Gox went on to become some of the richest people on earth. Their customers on the other hand are only paper millionaires waiting on the Japanese court system

This is the Ghost of Mt. Gox

A system that is built from the ground up to take advantage of the user and profit the operator. In the case of Mt. Gox its only saving grace was that Mark was comically inept. His schemes to trade against his customers and cover up his loses foolish but not malicious . But what if some one or a group of people where just a little bit smarter than Mark

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I hope you enjoy reading this as much as I did writing it