Mt. Gox CEO's Proposal to Redirect $5B in Stolen BTC Rejected by Bitcoin Community

Mark Karpelès, the former CEO of Mt. Gox, submitted a proposal to Bitcoin Core over the weekend that would have allowed a designated recovery key to redirect 79,956 BTC frozen since 2011 and worth approximately $5 billion at current prices to a Mt. Gox trustee recovery address.

The proposal was rejected within 17 hours after being auto-closed for procedural reasons, with contributors noting Karpelès should have opened a discussion on the Bitcoin development mailing list before submitting code. But the substantive objections ran deeper.

Mt. Gox creditors stated they did not want Bitcoin's consensus rules rewritten on their behalf and preferred the network to operate as designed. The core argument against the proposal was that once a chain reassigns coins for any reason, the category of eligible exceptions expands immediately, setting a precedent for future confiscations.

The proposal would have hard-coded a single consensus rule change allowing a designated recovery key to override the current controller of the theft address. The activation block height was set to infinity, meaning nothing would execute unless the community explicitly voted to turn it on.