Former Mt. Gox CEO proposes hard fork to recover $5.2 billion USD worth of Bitcoin from the 2011 theft

Mark Karpelès, the former CEO of the crypto exchange that went bankrupt, Mt. Gox, has announced a proposal calling for a hard fork of Bitcoin to recover approximately 79,956 BTC — worth over $5.2 billion at current prices — from a “sleeping” address linked to the exchange’s 2011 hack.

The proposal targets address 1Feex…sb6uF, which received nearly 80,000 BTC after Mt. Gox’s system was compromised in June 2011. These coins have not been moved in over 15 years, raising the possibility that the attacker either lost the private key or intentionally chose not to use or return the assets.

Under current Bitcoin rules, these BTC can only be spent if the owner possesses the corresponding private key.

The proposal explicitly states the addition of a “consensus rule allowing the spending of unspent outputs locked at the stolen address via signatures from Mt. Gox’s recovery address, thereby returning assets to creditors within a civil recovery process supervised by the court.”

Karpelès emphasized that this is a draft meant to initiate discussion, describing the move as “an effort to open debate on whether the Bitcoin community considers this special and exceptional case worthy of handling.” He also confirmed that the rule change would apply solely to the aforementioned address and would only be activated at a future block height if approved by the network.

Support and Opposition Debates

In his argument, Karpelès states that the theft is “undeniable,” noting that the coins have been dormant for 15 years and emphasizing that a court-supervised civil recovery process already exists to distribute any recovered assets to verified creditors.

He describes this change as a technically limited “hardcoded exception, applied only once for this specific case with unique characteristics,” not a general mechanism to reverse transactions or recover stolen assets.

However, the proposal also acknowledges clear risks.

Notably, there are concerns that changing ownership rules for a specific address could set a precedent, undermining Bitcoin’s immutability. “If it can be done once, then in principle it can be done again,” the draft states, raising the question of who would decide which cases qualify for protocol intervention, especially since other major hacks might also demand similar treatment.

The document also admits that coordinating a hard fork carries risks, including the potential for a chain split if part of the network refuses to upgrade.

Current Recovery Status of Mt. Gox

The BTC mentioned in the proposal are not part of the assets currently being distributed to creditors.

After Mt. Gox’s collapse in 2014, approximately 200,000 BTC were recovered and transferred to a court-appointed trustee, Nobuaki Kobayashi, as part of the civil rehabilitation process in Japan. This forms the basis for creditor payouts expected to begin around mid-2024.

Previously, the trustee extended the payout deadline to October 2026 — the third extension. According to data from Arkham Intelligence, Mt. Gox’s holdings still include 34,689 BTC across related wallets. Past movements, including a transfer of 10,608 BTC in November, typically occurred before creditor distributions.