Mentougou was stolen for 6 years: the compensation is indefinite, doubts remain

Unable to compensate? Indefinitely postponed liquidation compensation date

October 15th is an extremely important date for the cryptocurrency field: it is the date of the Mentougou Liquidation Compensation Proposal.

However, the market conditions have not been affected by this, and Mentougou once again "doves" everyone, and users don't have to worry about the 142,000 bitcoins and BCH in the Mentougou compensation event will bring a wave of smashing.

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Mentougou postpones the date of liquidation compensation

Since 2020, Mentougou has postponed the date of the liquidation compensation proposal twice, and the new date has been postponed again to December 15. This is undoubtedly another long wait for the victimized users.

The Mentougou incident and the Satoshi Aomoto incident can be regarded as two major uncertain risk events in the field of cryptocurrency, because both involve hundreds of thousands of bitcoins, and they may be thrown into the market at any time, bringing bad news.

As Bitcoin.com reported in May, Puerto Rican company Gox Rising had floated the idea of ​​buying the claims of Mt. Gox creditors. The company said it would pay claims of $800 per bitcoin in BTC or cash to creditors unwilling to wait for the civil lawsuit to conclude. “Our payments will be held in escrow and will be paid within 10 working days of confirmation of claim transfer,” said an announcement from Gox Rising.

However, judging from the current price of Bitcoin at $11,500, the victims of the theft will most likely not choose to sell their claims at a low price.

However, it is very difficult for victims to get their assets back.

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850,000 bitcoins stolen, the dark history of Mentougou

Mentougou is the Chinese translation of Mt.Gox, an early bitcoin exchange located in Tokyo, Japan, which was bought by French developer Mark Karples from programmer Jed McCaleb.

Because the market is very large, the early security protection measures were not high, and there have been many hacking incidents.

The first attack occurred in 2011, when hackers attacked the computer of an auditor in Mentougou, then used the access to the exchange to modify the transaction price of bitcoin to 1 cent, and transferred about 2000 bitcoins in this way. .

However, this attack did not have a great impact on Mentougou, nor did it attract too much attention from the platform. After all, the price of Bitcoin at that time was around US$1, and 2,000 Bitcoins were just a drop in the bucket.

Misfortunes often accumulate in the slightest. It is this attitude of not paying attention to security that paved the way for the subsequent large-scale theft in Mentougou.

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Victims of Mentougou theft are taking action to defend their rights

In 2014, Mentougou encountered a second hacker attack, which is the "Mentougou theft incident" that is still concerned today: this incident resulted in the theft of 850,000 bitcoins, including 100,000 bitcoins from the Mentougou platform and the user's 750,000 bitcoins.

This black swan event directly caused the price of Bitcoin to drop from $600 to $400, a 30% drop in a short period of time.

Then users began to question the security of the exchange, and hackers became an indelible shadow of various exchanges.

We can take a look at some of the history of Mentougou being stolen:

In 2016, Mentougou was still a game card trading website.

In July 2010, Mentougou opened bitcoin transactions.

In June 2011, hackers attacked on a large scale, and Mentougou began to lose a large number of bitcoins.

Beginning in June 2013, Mentougou suspended the withdrawal function of the platform, and there was a wave of runs.

On February 7, 2014, Mentougou was attacked by hackers, falsely claiming that all bitcoin withdrawal services were suspended due to bitcoin problems.

On February 17, Mentougou issued another statement, unable to give an exact withdrawal date.

On February 20, the Mentougou office moved to Shibuya.

On February 28, the CEO of Mentougou publicly admitted the loss of 100,000 bitcoins from the platform and 750,000 bitcoins from users, and filed for bankruptcy protection in Tokyo.

On March 9, Mentougou filed for bankruptcy protection in the United States.

On March 20, Fa Pang retrieved 200,000 bitcoins from the old wallet, reducing the number of stolen bitcoins from 850,000 to 650,000.

In August, Fatty was sentenced to probation for falsifying digital records.

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In 2015, Fa Fatty was arrested and imprisoned, and was released on bail in July 2016. The Japanese authorities were not guilty of most of the charges against him, but he was restricted from entering and exiting.

According to the analysis of professionals, about 7,000 bitcoins were actually stolen by hackers in the Mentougou theft incident, and more losses are suspected of being stolen by Mentougou. The biggest reason may be that the platform shorted Bitcoin in the early days, but the price rose too fast and could not repay user tokens, so it chose this method to solve the "debt" problem, and let the hackers take the blame.

Although Mentougou filed for bankruptcy protection, the Japanese court ruled that it will still return tokens worth 1 billion US dollars to the stolen victims.

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Stolen bitcoin flow chart

In the end, most of the stolen bitcoins flowed to BTC-e, and it was difficult to retrieve them. Mentougou could only use the remaining bitcoins to pay compensation.

However, after many years, Bitcoin has risen nearly 30 times from 40 US dollars, but it has also brought a lot of trouble to subsequent compensation.

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From December 2017 to February 2018, Fatty’s lawyer, Kobayashi, once publicly stated that he had sold 35,800 bitcoins through over-the-counter transactions to repay the losses of users in 2013.

1. Creditors can choose two ways to accept compensation: legal tender or cryptocurrency (BTC or BCH);

2. Other forked coins such as BSV will be sold and exchanged for legal tender;

3. Give priority to the payment of small creditors with less than 200,000 yen (about 13,000 yuan).

In March 2020, Mentougou Liquidation Compensation issued a draft, the main contents of which are three points:

1. Creditors can choose two ways to accept compensation: legal tender or cryptocurrency (BTC or BCH);

2. Other forked coins such as BSV will be sold and exchanged for legal tender;

3. Give priority to the payment of small creditors with less than 200,000 yen (about 13,000 yuan).

According to the official 2019 data, Mentougou’s current asset situation: about 630 million US dollars in cash, 142,000 BTC and 143,000 BCH.

However, Mentougou stated that it will not compensate users with zero account balances, and users who pretend to be victims of Mentougou and submit claims to the trustee will be refused compensation. Claimants whose bitcoin balances are lower than what they claim will also be denied, but a secondary claim can be made.

However, on July 1, 2020, the day before the agreed liquidation compensation plan submission date, the official announced again that the news would be postponed for three and a half months-the latest date was set for October 15. On October 15th, the same was pushed to December 15th again.

In fact, if Mentougou compensates according to the amount of legal currency when it was stolen that year, then 142,000 bitcoins can not only compensate for the shortfall of 650,000 bitcoins (calculated at a price of 400 US dollars, worth 260 million US dollars), but also can be used later. Make a fortune, because 142,000 bitcoins are worth about $4.1 billion at the current price of $11,700.

Of course, users will definitely not buy it. How could they accept the price of fiat currency back then? A new round of appeals and rights protection will start again, and the dust of the Mentougou case will never be settled.

It is difficult to give a one-time solution to Mentougou, a problem left over from history, and the multiple postponements are also to find a better solution to solve this matter.

At present, as far as the market is concerned, as long as this matter is not fully resolved and there are disputes, it will be negative. Mainly the potential impact of Bitcoin in the payout scheme.

If it is compensation for cryptocurrency, users will smash the market because of high returns. This kind of smashing will be more scattered and have less impact on the market.

But from a long-term perspective, due to various coin loss incidents and the total cap of 21 million, the circulation of Bitcoin is average. If this huge amount of Bitcoin in Mentougou can flow into the market, it may bring fresh blood. while keeping Bitcoin alive.

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On October 8, according to Whale Alert data, 95 BTC were transferred from the Mentougou cold wallet to an unknown wallet address.

The change of the Mentougou cold wallet also conveyed a message that the Mentougou incident is still a major industry event that deserves our long-term attention.