Former MtGox CEO Mark Karpelès recently made headlines after submitting a significant proposal to Bitcoin Core, aimed at altering the network to allow for the reallocation of 79,956 BTC, currently valued at approximately $5 billion, from an address dormant since 2011. The proposal, which only comprised around 60 lines of code, sought to implement a hard fork — a fundamental change that would split the blockchain — allowing the MtGox trustee to redirect these funds into Japan’s rehabilitation process, which is currently overseen by the courts.
Karpelès, who operates under the GitHub handle MagicalTux, set the activation height of the pull request to infinity, emphasizing that no changes would take place without explicit community approval. However, the proposal was short-lived, lasting merely 17 hours before it was auto-closed. The rapid closure highlighted significant dissatisfaction within the Bitcoin community as enthusiasts argued that Karpelès should have initially brought such changes to the Bitcoin development list for discussion, rather than submitting a pull request directly. Industry figures indicated that a more appropriate venue for this kind of discourse could have included platforms like Bitcointalk, X, or various Bitcoin mailing lists.
Criticism also arose from several MtGox creditors themselves, who expressed their reluctance to have Bitcoin’s foundational rules modified on their behalf. Many of these creditors emphasized that the assurance that private keys equate to ownership was more significant to them than the potential recovery of their lost funds. A notable comment from a creditor stated, “Absolutely not. Would break a key pillar of Bitcoin.”
In anticipation of the pushback, Karpelès had acknowledged the objections to his proposal within the document itself. He underscored the clear nature of the theft and noted that the coins had not moved in over a decade. Furthermore, he pointed out that a legal framework for their distribution was already established, and the proposal targeted a singular address. However, detractors argued that allowing any such redirection could set a dangerous precedent. If Bitcoin were to alter its fundamental operation for one case, it could lead to future demands for similar interventions by victims of other documented thefts or hacks.
Proponents of maintaining the integrity of Bitcoin highlighted the distinction between Karpelès’s proposal and previous emergency interventions that had occurred within the network, which were enacted due to imminent risks threatening the network’s functionality. Unlike those situations, Karpelès’s proposal sought a change despite the network operating as intended.
Ultimately, the pull request was closed, leaving the $5 billion in Bitcoin still frozen at its respective address. The creditors who stood to gain from Karpelès’s proposal chose to uphold the principle of Bitcoin’s design over the potential recovery of their assets, affirming the network’s core tenet of “code is the law.”
