Mt. Gox’s Karpelès Proposes Bitcoin Hard Fork to Recover US$5.2B in Lost Funds

Mark Karpelès, the former chief executive of Mt. Gox, has put forward a proposal to amend Bitcoin’s rules in order to recover 79,956 BTC, currently valued at about US$5.2 billion (AU$7.28 billion), that were stolen from the exchange in 2011.

The draft, submitted via GitHub and a Bitcoin Core pull request under his “MagicalTux” handle, calls for a hard fork that would introduce a new consensus rule permitting the coins to be moved without the original private key. The funds have remained in a single address for more than 15 years and, under existing protocol rules, can only be spent with the corresponding private key.

Karpelès wrote that the change would “add a consensus rule that allows spending the unspent outputs locked to the theft address using a signature from the Mt. Gox recovery address, ”so the assets could be distributed through Japan’s court-supervised rehabilitation process. He acknowledged directly, “I want to be upfront: this is a hard fork,” adding that all nodes would need to upgrade prior to activation.

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Implementation Hinges on Consensus

The activation height was set to infinity, meaning no change would occur unless the network explicitly agreed to implement it. Karpelès described the effort as an attempt to prompt discussion, arguing that the trustee has declined on-chain recovery due to uncertainty over whether such a rule would ever be adopted.

Opposition emerged quickly. Critics on forums warned that altering ownership rules for one address could undermine Bitcoin’s immutability and set a precedent for future interventions. The pull request was closed within roughly 17 hours, leaving the coins unmoved.

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