In 2014, the world's largest Bitcoin exchange, MtGox, filed for bankruptcy after a massive hack that resulted in the loss of over 850,000 Bitcoins worth around $473 million at the time. This catastrophic event shook the crypto industry and raised many questions about the security of digital currencies.
MtGox was founded in 2009 by Jed McCaleb as a platform where users could buy and sell Bitcoins. In 2011, Mark Karpeles took over as CEO and continued to operate the exchange until its collapse in February 2014.
The hack is believed to have started years before it was discovered. According to reports, hackers were able to gain access to MtGox's servers through an unpatched vulnerability in its system. They then began siphoning off Bitcoins from MtGox's hot wallets (an online storage facility) without being noticed.
As more and more Bitcoins were stolen, MtGox's reserves dwindled until it could no longer meet customer withdrawals. The company eventually admitted that it had lost all of its customers' funds and filed for bankruptcy.
The fallout from this hack had a significant impact on both Bitcoin's reputation and price. Its value fell sharply following news of the incident but has since recovered significantly.
Despite this setback, cryptocurrency continues to grow in popularity worldwide with many investors still believing in its potential as a decentralized financial system free from government control or manipulation.
However, events like these serve as reminders that even new technologies like cryptocurrency are not immune to hacking attempts or other forms of cybercrime. As such security measures must be continuously updated and improved upon if they are going to remain effective against increasingly sophisticated attacks.
This article was originally published on Coinpedia Fintech News.