Lessons from exchange failures: Mt. Gox and FTX
Two of the best-known exchange collapses, Mt. Gox in 2014 and FTX in November 2022, and the practical lessons they hold for beginners.
Exchange failures are not just a theory. Two well-known collapses show how quickly customer balances can become frozen and how long recovery can take.
Mt. Gox was a bitcoin exchange based in Tokyo. In its early years it was one of the largest places to trade bitcoin. In February 2014 it halted withdrawals and soon filed for bankruptcy protection. It said that hundreds of thousands of bitcoin belonging to customers and the company were missing, largely linked to thefts that had gone unnoticed over a long period.
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