The failure that defined custodial risk
Mt. Gox handled a dominant share of global bitcoin trading. Its collapse was not a single dramatic breach but an accumulation: losses that had reportedly been occurring over an extended period, discovered when withdrawals could no longer be met.
What a customer could actually have checked
Almost nothing — and that is the lesson. There was no proof-of-reserves practice, no segregation requirement, no supervisory regime demanding either. Customers had a claim recorded in a private database and no way to test whether the assets behind it existed. Every subsequent development in this area — proof of reserves, segregation rules, Japan’s registration regime — is a response to that gap.
Status: contained, not resolved
Conisec records this as Contained. The immediate failure is long closed, but creditor distributions have run for over a decade through civil rehabilitation, and “Resolved” would imply a conclusion that customers did not experience. See our status definitions.